4 days ago
Strengthening baht adds to Thai tourism sector woes
The strengthening baht is beginning to weigh on Thailand's fragile tourism sector, already plagued by recurring security issues, leaving travellers feeling their visits aren't worth the cost.
The private sector has called for efforts to restore confidence ahead of the high season.
The Ministry of Tourism and Sports reported this week that foreign tourism receipts between Jan 1 and Aug 10 totalled 938 billion baht. At the current rate, the full-year target of 1.77 trillion baht will not be met.
Foreign arrivals to Aug 10 totalled 20 million, down more than 6% from the same period a year ago.
The baht has rallied against the US dollar by 5-6% this year, which is a negative factor already affecting short-haul markets, such as China, said Thanet Supornsahasrungsi, president of the Association of the Chonburi Tourism Federation.
Many Chinese tourists are now flocking to Japan due to the weak yen, he said. Chinese arrivals to Thailand are down by nearly one-third so far this year.
Mr Thanet said that even though Thailand secured a larger number of long-haul arrivals over the past seven months, if tourists perceive the country as unappealing in terms of value for money, they might pivot to other destinations.
'We've consistently felt the impact of the global economy, which prompted tourists from many countries to cut overseas travel costs, seek countries where their currency has appreciated, or choose to stay at home,' said Mr Thanet.
He said the government should respond more quickly to eliminate ongoing obstacles, particularly safety issues, which are at the core of the problem.
Since two recent incidents in Bangkok — a shooting spree that left six dead at the Or Tor Kor market last month, and two Malaysian tourists being set on fire last week — the government has done little to improve tourist confidence, said Mr Thanet.
Given weak arrivals from China and South Korea, he said hoteliers in Pattaya now depend on weekends or long holidays to lift occupancy rates from local travellers.
For instance, during the recent Mother's Day holiday, a four-day weekend for many, the average occupancy rate in Pattaya surged to 80-90%, but it dropped to 30-40% during weekdays.
'We might not immediately feel the pinch from the latest case involving Malaysian tourists, as this period coincides with the school break in China, where tourists have already booked their trips and are still travelling as planned, resulting in a 5% growth this month," said Mr Thanet.
"We're more concerned about forward bookings if the government doesn't attempt to restore confidence.'
He said the co-payment subsidy scheme to promote domestic travel helped increase the local market to some extent, but small and medium-sized hoteliers have not reaped the benefits as much as large hotels due to delayed budget allocation.
From the first month of the programme in July, many small hotels had to withdraw from the scheme as they didn't receive subsidy payments from the government as scheduled and had to bear the costs of servicing those guests in advance.
As privileges for main destinations including Pattaya have been fully redeemed, tourism operators have urged the government to switch to the more efficient Pao Tang app operated by Krungthai Bank, said Mr Thanet.
This request was denied, as the government said KTB was no longer a state bank and using only that bank would discriminate against other private banks.
