TAT said packages boosting domestic tourism could bring 70 billion baht in revenue; CAAT said international flights to resume in September

The Tourism Authority of Thailand (TAT) said on Wednesday that the government’s measures to stimulate domestic tourism valued at 22 billion baht could bring economic activities worth 70 billion baht in return. 

The cabinet has on Tuesday approved three packages to promote domestic tourism which includes 40 per cent discounts for hotel rooms, airline tickets, and car rentals for Thai citizens and an allowance of 3,000 baht.

The packages will be on offer between July and October. 

Yuthasak Supasorn, TAT’s governor said the multiplier effect from the packages could directly generate 45 billion baht within the tourism sector and indirectly boost 25 billion baht worth of economic activities in related industries.

TAT estimated in April that there will be only 16 million foreign tourists and 60 million domestic trips in 2020 compared to the pre-pandemic targets of 40 million and 172 million respectively. 

Consequently, the estimated revenue is down to 1.23 trillion baht in comparison to the 1.93 trillion baht receipt when 39.8 million people visited Thailand and Thai citizens made 167 million trips in 2019.  

Yuthasak said the three packages should help them reach their income target and stimulate at least 80-100 million domestic trips.

He added that more details on the packages will be presented to the cabinet within the next two weeks.

International flights

Chula Sukmanop, the Civil Aviation Authority of Thailand (CAAT)’s director-general said after a meeting on Wednesday with airlines and the International Air Transport Association (IATA) that international flights could resume in September. 

“None of the airlines has stated the intention to resume international flights,” he said. 

“They are still worried about the health regulations [state quarantine] and the entry ban which has yet to be lifted by the Center for COVID-19 Situation Administration,” he added.

Chula said another reason for the hesitation is because of the load factor as airlines are not sure they can breakeven.

IATA estimated that the load factor will have to reach 77 per cent for airlines to breakeven on each flight.

Domestic flights, on the other hand, can now fly at 100 per cent capacity as the cap of 70 per cent and the requirement for empty seats between passengers have been lifted.

CAAT expects 70 per cent fewer air-passengers in 2020.

The remaining 30 per cent will mostly be domestic flights with international flights resuming in September. 

There were 165 million air-passengers on operated flights in Thailand in 2019. Air-passengers dropped by 90 per cent between March and April.

Thailand is also currently in negotiations with China and Singapore regarding the travel bubble. Business people will be the first group of passengers to be allowed to fly internationally.

Shares

Shares within the tourism group, including hotels and airlines, were doing well since Tuesday and during the morning trading session on Wednesday. 

MINT, ERW, CENTEL, VRANDA, SHR and DTC all traded up before the intermission. AOT, AAV and BA also traded up as domestic flights will surely benefit from the domestic tourism packages. 

KTB Securities also pointed to CENTEL, ERW and MINT.

The latter has announced on Wednesday that it is ready to reopen all 28 of its hotels in Thailand which accounts for 14 per cent of its income.

Globlex Securities looked to retail (TNP) and wellness (SPA) as other beneficiaries. 

Trinity Securities said ERW will benefit more than MINT and CENTEL as approximately 90 per cent of ERW’s income comes from hotels in Thailand in contrast to CENTEL’s 32 per cent and MINT’s 9 per cent.

They also warned against increasing hotel shares ratio within a portfolio since income from foreign tourists in 2021 will not be the same as in 2019.   

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