Tourism sentiment set to dip, reversing recent gains, sector warns

The sentiment of Thailand’s tourism industry is likely to fall in the first quarter of 2021 due to concerns over the ongoing Covid-19 outbreak, the Tourism Council of Thailand (TCT) said on Tuesday. The index had risen for the previous two quarters.

The crisis has hit around 4 million workers in the tourism sector with work suspensions and reduced income, and could further possibly push 2 million into unemployment, said TCT President Chamnan Srisawat.

TCT reported 2020 fourth-quarter tourism sentiment at 62 points, slightly up from the third quarter thanks to stimulus campaigns from the government. The council expected the sentiment in the beginning of this year to fall as a result of the resurgence of local infections.

“Though the vaccinations will revitalize tourism in the future, many tourism businesses may have shut down their operations before that time,” Chamnan said.

The council predicted a sentiment value of 53 for the quarter, where anything above 50 is considered a positive outlook, and below is negative. The final report was likely to be published in earlier April.

The sentiment of the tourism sector plunged in 2020 as the Covid-19 pandemic halted all international tourism into Thailand, paralysing the industry that contributes around 10 per cent to the national economy.

Sentiment was 57 in the first quarter last year, before plummeting to 12 in the second after the March outbreak prompted worldwide restrictions. It rose again to 60 in the third quarter, before reaching 62 in the last quarter of the year.

The TCT urged the authorities to mitigate the economic fallout for this vulnerable group by reducing expenses and boosting inflows. These measures can consist of reduced utility rates, soft-loan schemes, and co-payment campaigns for business owners.

“It is necessary to help tourism businesses to maintain their operational capabilities,” said TCT vise president Marisa Sukosol Nunbhakdi. She expected tourist arrivals to gradually return to normal in the next couple years.

Kasikorn Research

K-Research said that this year domestic travel will be imperative in driving Thailand’s tourism. But even travel within the country has slowed down again due to the resurgence of Covid-19.

Restrictions have caused a cut in inter-provincial passenger transport services and many temporary closures of tourist attractions.

The research team assessed 2021 outlook for domestic travel in two scenarios.

The first one is if the outbreak can be contained over the fews months, no resurgence of Covid-19 is found during the remainder of the year, and the vaccinations proceed as planned between February and April. In that case, Thais are expected to make 120 million domestic trips, an increase of 39 per cent year-on-year and generating around 660 billion baht in tourism income.

The second scenario addressed the risk of finding infections in Thailand throughout 2021, which would disrupt the recovery in domestic travel in the year. However, K-Research held the view that the severity of such an outbreak will likely be moderate, and the government may not reimpose strict restrictions. Domestic travel in this scenario could see 90 million trips, 4.3 per cent up year-on-year, with around 500 billion baht of income.

Looking back to the pre-Covid-19 era, Thailand reported 172.7 million domestic trips in 2019.

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