Short-haul bookings remain weak
Pattaraanong Na Chiangmai, deputy governor of international marketing for Asia and South Pacific at TAT, said tourism in the second half is still marred by several challenges.
Forward bookings for flights across all short-haul markets between June and December have been reduced year-on-year, according to Forwardkeys, an air traffic data company.
Asia and South Pacific were down by 22% year-on-year to 849,034 seats, while Southeast Asia, South Asia and Oceania decreased by 16% to 303,325 seats.
The East Asia market contracted by 25% to 528,480 seats, including a 40% nosedive on Chinese routes to 109,676 seats.
During the first six months, Thailand welcomed 16.6 million foreign tourists, of which 11.1 million were short-haul visitors, far below the target of 28.2 million in 2025.
However, long-haul markets gained strong momentum, with 5.5 million arrivals in the first half, said Chiravadee Khunsub, deputy governor for Europe, Africa, the Middle East and the Americas at TAT.
She said Thailand is on track to secure 10.7 million long-haul tourists as expected this year.
Mrs Chiravadee said forward bookings from these markets in the third quarter tallied 713,491 seats, increasing from 677,211 seats in the corresponding period last year.
Passengers from Europe, the Americas and Africa are expected to increase year-on-year. However, passengers from the Middle East are set to contract by 9% to 97,246 seats, due to geopolitical conflicts.
Ms Pattaraanong said the TAT will soon launch a 750-million-baht subsidy for airlines and tour operators called "Summer Blast China & Overseas Market" aiming to attract over 790,000 visitors in one year.
Nuntaporn Komonsittivate, head of commercial at Thai Lion Air, said the airline is interested in participating in the joint-promotion programme for commercial flights.
She said there is room to increase foreign passengers in its existing flights to boost tourism, whether from Indonesia, India or China, with Thailand experiencing a sharp decline since the beginning of the year. At present, Thai Lion Air's Chinese flights secured about 60-70% load factor.
Anlee Do, general manager of Thailand, Vietnam, Philippines and the Mekong Region at Lufthansa Group, said the airline may need to study the TAT's proposal first before deciding to join.
At present, the group is committed to daily operations across its three airlines -- Lufthansa, Swiss and Austrian Airlines -- to Thailand this summer.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Bangkok Post
2 days ago
- Bangkok Post
Thailand launches Green Tourism Collections
The Tourism Authority of Thailand (TAT) has launched a new project, 'Thailand Green Tourism Collections,' featuring 20 eco-friendly travel routes across 10 cities. The initiative aims at meeting the European Union's (EU) sustainability regulations and national agenda for the future. One of the destinations featured in the project is Poomjai Garden, a 2.7-acre venue offering activities and local experiences by canal in Bangkok's Chom Thong district.
Bangkok Post
2 days ago
- Bangkok Post
Chinese arrivals may hit 9m in 2026
Chinese tourist arrivals should rebound to 9 million in 2026, driven by large groups, positive momentum from chartered flights and global business events that reinforce Thailand's image as a safe destination, according to the Association of Thai Travel Agents (Atta). Atta president Thanapol Cheewarattanaporn said Chinese arrivals could climb to 9 million next year, approaching the 2019 peak of 10.9 million, mainly driven by three factors. He said chartered flights should start to increase this year thanks to the subsidy programme offering 350,000 baht per flight, as Atta already secured deals with travel agents in Chongqing, Lanzhou and Hangzhou during its roadshow this week. This programme alone should attract 150,000 Chinese tourists, said Mr Thanapol, along with 75,000 travellers from subsidies for the meetings, incentives, conferences and exhibitions segment, which are typically high spenders. Large incentive groups choosing Bangkok as their destination should also help revive confidence, notably the Amway 2026 incentive meeting in March and April 2026, with 13,000 delegates joining, he said. "These large-scale groups from China will play a key role in restoring travel confidence among Chinese tourists and will help attract more independent travellers back to Thailand," said Mr Thanapol, adding this estimate assumes no further negative incidents. On Oct 12-18, 2026, Thailand is scheduled to host the World Bank Governors' Meeting, an international event that could help elevate confidence in Thailand's safety, infrastructure and capacity as a leading tourism and business destination, he said. Adith Chairattananon, honorary secretary-general of Atta, said the momentum from the chartered flights subsidy should continue, increasing traffic to Thailand by five times and generating a total of 1 million tourists of the 9-million goal next year. Zheng Wei, owner of Gansu Junhe Cultural Tourism, a major tour operator in Lanzhou, said there's strong interest in the chartered and incentive subsidies. "We expect the real impact of these measures to show starting from November and December. If no major negative incidents occur, Chinese tourism to Thailand could recover to 70-80% of pre-pandemic levels by late next year," he said. Mr Zheng said the emergence of Vietnam serves as a temporary substitute based on lower costs, but it still lacks the quality and appeal of Thailand. "Safety concerns are easing. If Thailand handles this well, Chinese tourists will definitely return. Vietnam is not a true competitor due to its substandard services. Most Chinese tourists don't repeat their visits," he said. The TAT & Atta Roadshow to China this week is aimed at blunting the sharp plunge of the Chinese market by 34.1% in the first half. However, the TAT has yet to set 9 million as a target and remains cautious in assessing the situation.
Bangkok Post
2 days ago
- Bangkok Post
Tax shift props up the auto industry
Former prime minister Thaksin Shinawatra said during a recent conference that the government should impose a high excise tax on imported electric vehicles (EVs) that use a low proportion of local content. Thailand's free trade agreements (FTAs) with some countries have resulted in a 0% import tariff on EVs, which hampers the domestic auto industry. Thaksin said imported EVs should be required to use a minimum level of local content, such as car seats, to protect the domestic industry. Thailand signed an FTA with China primarily using the Asean-China FTA framework around 20 years ago, setting zero tariffs on imports, including EVs. Following the speech, the Excise Department is preparing to adjust the excise tax structure for vehicles, linking it to the use of local content. Imported EVs with a high proportion of domestically manufactured components will, in principle, be eligible for a lower excise tax rate than those with a smaller proportion of local content. Fully imported vehicles or completely built-up units would be subject to higher excise taxes. According to Deputy Finance Minister Paopoom Rojanasakul, the goal is to support the domestic auto parts industry by encouraging the automotive sector to increase the use of domestically manufactured parts via tax incentives. However, pundits say it is likely such attempts partially stem from ongoing US tariff threats.  Will lower import tariffs give American cars a competitive edge? Thailand's automotive industry is unlikely to be affected by the reduction of import tariffs as American vehicles do not have any advantages over cars produced in Southeast Asia, especially in Thailand, in terms of parts prices, quality, or the speed of model updates, said Sompop Manarungsan, an analyst on the Chinese and American economies. Chinese and Japanese automakers tend to update models faster, responding to consumer demand more effectively than US automakers, he said. Mr Sompop said American cars have always struggled to penetrate foreign markets, even when import tariffs were low. For example, in Japan American cars have a limited market share due to these reasons. The global automotive industry is also transitioning towards EVs. In the US, Tesla is the only major EV manufacturer as the first administration of US President Donald Trump ended policies promoting EVs, hindering the development of the country's EV industry. Meanwhile, Southeast Asia's auto industry, particularly Thailand, is increasingly shifting to EVs. As well as being more affordable, there is a wider range of attractive models and they are more energy-efficient than cars powered by internal combustion engines (ICE), said Mr Sompop. From 2022 to 2024, the popularity of battery EVs (BEVs), plug-in hybrid EVs (PHEVs) and hybrid EVs (HEVs) in Thailand surged. EV registrations rose from 84,500 units in 2022 to 206,000 units in 2024. During that period, 644 projects applied to the Board of Investment (BoI) for investment promotion for EV production and parts, with a combined investment value exceeding 280 billion baht. In the first half of 2025, 57,289 new BEV passenger cars were registered in Thailand, a 52% increase year-on-year, accounting for more than 15% of all new car registrations, the highest proportion in the region. Thailand has more than 203,000 registered BEV passenger cars, 71,900 electric motorcycles, 3,800 electric buses and trucks, and 1,000 electric three-wheelers.  What is the state of the EV market in Thailand? Many Chinese EV brands built manufacturing plants in Thailand, including battery factories. However, intense price competition forced some EV brands out of the market, requiring them to return government incentives, such as EV purchase subsidies of up to 150,000 baht per car and excise tax reductions, in addition to tax penalties. Due to this fierce competition, the National EV Policy Committee, also known as the EV Board, was compelled to adjust the production-to-import compensation measures to prevent an EV glut in the domestic market. The board last week eased production requirements for EV manufacturers participating in EV incentive schemes if they produce BEVs for export, in an effort to promote Thailand as an EV export base. The two schemes -- EV3.0 and EV3.5 -- require manufacturers to produce EVs locally to compensate for imported vehicles since the start of the schemes in 2022 prior to commencing local production. These production requirements have become an uphill task for companies as the domestic market stagnates. Under EV3.0, companies that started producing BEVs in 2024 are committed to a 1:1 ratio target, meaning they must produce one BEV domestically for every EV they import. If commencing production in 2025, the ratio is set at 1.5 locally produced BEV for each imported BEV. The ratios are set at 1:2 and 1:3 for manufacturers under the EV3.5 programme, which is aimed at propelling EV industry growth between 2024 and 2027. This approach, proposed by the Federation of Thai Industries, is expected to increase the number of EV exports to roughly 12,500 units this year and 52,000 units in 2026.  What is the goal of the tax promotion measures for EVs? Thailand clearly wants to shift from being a leading producer of ICE-powered vehicles -- ranked 10th globally in 2023 -- to production of EVs. To support this transition, the Excise Department designed tax measures to attract automakers to establish EV production bases in here, especially for EV components, such as inverters, which convert direct current (DC) into alternating current (AC); batteries; battery management systems, which monitor and control the battery system to ensure safety, performance and lifespan; and drive control units, which manage the propulsion of electric motors by processing inputs from the accelerator, steering, and braking systems and sending commands to the inverter. A source from the Excise Department who requested anonymity said after the EV promotion measures expire in 2025, the department plans to implement tax measures to make Thailand a production base for EVs, particularly for the manufacturing of key components. To qualify for a 2% excise tax rate, manufacturers must use domestically produced parts as specified. If they do not use the required locally produced components, the excise tax rate will be 10%, said the source. The requirement to use locally made components will be implemented in stages, noted the source. Starting in 2026, automakers wishing to benefit from the lower tax rate must use batteries manufactured within the country, whether at the cell, module or pack level. All EV manufacturers with facilities in Thailand are capable of producing batteries at the pack level. By 2030, automakers must use inverters manufactured domestically to qualify for the lower excise tax rate. However, if a car manufacturer invests in a battery cell production facility, it is not required to invest in an inverter production plant. By 2035, manufacturers are required to invest in the production of battery management systems and drive control units. As for fully imported vehicles from China that avoid import tariffs under the Asean-China FTA, the Excise Department plans to coordinate with the BoI for the latter to issue support measures for EVs that use local content, according to the source, meaning imported EVs meeting the specified proportion of local content will be eligible for a lower excise tax rate. Investment promotion for EV production, key components, charging stations, and battery swapping stations tallied a cumulative value of 138 billion baht, including: 21 BEV manufacturing projects with a total investment of 41 billion baht and a combined production capacity of 386,000 units per year; 16 electric motorcycle manufacturing projects with a total investment of 990 million baht and a combined production capacity of 810,000 units per year; and three electric bus and truck manufacturing projects with a total investment of 2.20 billion baht and a combined production capacity of 4,800 units per year. For battery manufacturing plants, there were 53 projects with a total investment of 80.1 billion baht. Production of other key components such as traction motors, battery management systems, drive control units, and on-board chargers tallied 42 projects with a total investment of 6.52 billion baht. EV charging stations garnered 29 projects with a total investment of 5.56 billion baht to install 20,080 charging points, including 7,360 quick-charge points. There were five battery swapping station projects with a total investment of 1.28 billion baht, comprising 555 stations for motorcycles, seven stations for large commercial vehicles, and six stations for passenger cars. As of March 2025, there were 3,720 public EV charging stations with 11,622 charging points nationwide. These consist of 6,524 DC (fast) chargers and 5,098 AC chargers, with coverage across all regions of the country. Government support for the transition from ICE vehicles to EVs included an excise tax reduction for hybrid vehicles that emit no more than 100 grammes per kilogramme of CO2 to 6% for seven years. Tax incentives were also revised for PHEVs, which can be developed into EVs in the future. The previous qualification for the 5% excise tax rate had two conditions: an electric range of at least 80 kilometres per full charge and a fuel tank capacity not exceeding 45 litres.
