Analysts scale down tourism arrivals for 2021, expect recovery in 2022

While Thailand aims to welcome international tourists in the next 100 day, a substantial rise in domestic Covid-19 infections has flagged concerns on how soon the authorities can put the situation under control.

Several analysts have downgraded the forecast of tourist arrivals for this year in light of the third wave of the outbreak, in which new cases and fatalities continue to reach new highs.

The Kingdom once had around 40 million foreign arrivals in pre-pandemic 2019, contributing to more than 10 percent of the gross domestic product (GDP).

In 2020, Thailand recorded 6.7 million visitors.

Kasikorn Research Center, this week, has revised down tourist numbers in 2021 to a range of 250,000 to 650,000, from 1.2 million predicted in April.

In the worst case scenario, Thailand will still be facing the effects of the crisis by year’s end which might result in stricter regulations for tourists and a possible delay in the reopening plan. Kasikorn projects only 250,000 visitors to enter Thailand in 2021 in this case.

The best case scenario is that the government can successfully contain the outbreak within the next two months and inoculation proceeds as planned. The country would see 650,000 visitors for 2021. 

“The outbreak situation and vaccination progress remains the most important factors in achieving the tourism reopening plan for the rest of this year and beyond,” said the research. 

Kasikorn expects tourism income for 2021 from 19 billion to 45 billion baht, compared to 332 billion baht in the last year.

Amonthep Chawla, an analyst at CIMB Bank, said he expects around 500,000 visitors to arrive this year, pinning the hope on the Phuket ‘sandbox’ as an example for other tourist destinations. 

“We may not expect a sharp increase in the number of tourist arrivals this year,” Amonthep said. He gave a GDP growth projection at 1.3 per cent, lower than the current of 1.8-per-cent growth from the central bank. 

Tourism stocks 

Since the premier Prayut Chan-ocha announced a reopening plan, Thai stocks, especially the tourism-related sector, have fluctuated from mixed signs of optimism and pessimism.

An analyst at SCB Securities said the market is seeing a short-term trading opportunity for The Erawan Group (ERW), Asset World Corp (AWC), and Airports of Thailand (AOT) encouraged by their high revenue exposure to Thai tourism and price cushion below pre-Covid levels.

“As wider vaccination is key to recovery, we see Minor International (MINT) as better placed for longer-term investment,” said Raweenuch Piyakriengkai. 

However, she warned that “it is too early to ascertain the speed of recovery given low vaccination levels, the new variants of the virus, and the varying travel restrictions from country to country.”

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