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4 May 2018

Thai Economy

Number of Middle Eastern Tourist Arrivals to Thailand May Contract in 2018 due to Economic and Competition Factors (Current Issue No. 2909)

คะแนนเฉลี่ย

​        According to the Ministry of Tourism and Sports, the number of Middle Eastern  tourist arrivals to Thailand totaled 187,000 during Q1 2018 , representing a contraction for the second consecutive quarter of 3.2 percent. Thailand's tourism revenues from such tourists reached approximately THB14 billion in 1Q18, shrinking slightly YoY.

            The number of Middle Eastern holidaymakers, including those from Saudi Arabia, United Arab Emirates, Egypt, Iran, Oman and Jordan, to Thailand has contracted steadily since 2017. This is attributable to unfavorable economic performances and economic restructuring within the Gulf Cooperation Council (GCC), which comprises Saudi Arabia, United Arab Emirates, Oman, Qatar, Bahrain and Kuwait. One of their economic restructuring programs is tax reform that has affected business costs and domestic consumption, which in turn has inhibited  certain consumer segments in those countries to take holidays abroad.

            Looking into the remainder of 2018, we at KResearch are of the view that despite an expected rise in oil prices that may help bolster economic growth within the Middle East, there are several factors that need to be monitored closely. These include how long will the uptrend in oil prices last, and economic restructuring within the GCC that has already hurt business costs and household spending, derailing overseas travel plans of some consumer segments, and rapid weakening of the Iranian Rial against the US Dollar. Heightened competition between nations in vying for Middle Eastern tourists has resulted in the contraction of such tourist arrivals to Thailand, as well.

            KResearch thus expects that the numb​er of Middle Eastern holidaymakers to Thailand will continue to shrink during the remainder of 2018. As a result, the number of Middle Eastern tourist arrivals will reach perhaps 7.58-7.79 million in 2018, shrinking 4.2-1.4 percent, against the 5.7 percent growth reported for 2017. It is expected that such tourists will spend around THB60.6- 62.5 billion, contracting 2.1-1.0 percent , versus the 8.3 percent growth recorded in 2017.