The third wave of COVID in 2Q21 presents bad news for travel-related businesses that had begun to bounce back following the latest resurgence of COVID-19 towards the end of last year. According to the Ministry of Tourism and Sports, the number of Thais travelling in the country during February 2021 surged more than 30 percent against that reported in January 2021 when the domestic travel market was adversely affected by the second wave of COVID-19. As a result, Thais made only 4.51 million domestic trips in January 2021. Due to the third wave of COVID-19, which was a result of more infection clusters than the previous round, particularly in Bangkok and other provinces in early April, the government had to reimpose lockdown restrictions and seek cooperation from people to work from home and avoid inter-provincial travel once again.
This situation has prompted many Thais to postpone their domestic trips in 2Q21, particularly during the upcoming Songkran Festival. Given this, we at KResearch expect that travel-related businesses in the country may experience at least THB10 billion in losses during April 10-18, 2021 (versus our prior estimate in March 2021)[1].
Additionally, the lockdown restrictions during the third wave of COVID-19 are projected to last longer than that seen during the previous round due to a higher number of infections and rapid spread of the disease; this is bound to affect travel plans of Thais during 2Q21. KResearch is of the view that the combined impact of the second and third waves of COVID-10 may cause receipts within the domestic travel market to reach only THB137 billion, a decline of more than THB130 billion compared to our prior estimate in January 2021[2].
KResearch is of the view that the most important action that must be undertaken by the relevant public agencies during this time is to restore public confidence, especially regarding the vaccination issue. Concurrently, all parties may have to join forces in combating the pandemic as soon as possible t reduce its impact on the economy and tourism over the long term. Once the situation improves, preventative measures must be strictly maintained on par with the required standards as the COVID-19 pandemic at home and abroad may not end in the near term. If not, the tourism industry may experience increased uncertainty, going forward.
[1]Domestic travel projected to experience a shortfall of THB34 billion in receipts during the Songkran Festival, compared to that of 2019 before the emergence of the COVID-19 pandemic.
[2] When compared to the normal situation in 1H19 prior to the COVID-19 pandemic, KResearch projects that the domestic travel industry will experience a shortfall of THB385,400 million in revenue during 1H21.
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