Thailand’s tourism sector continues to slump, with foreign tourist arrivals having fallen by more than 7 percent so far this year, according to the country’s Ministry of Tourism and Sport.
In a statement yesterday, the ministry reported that the country saw a 7.04 percent decline in international tourist arrivals in the year to August 17, compared with the same period a year earlier. The country welcomed around 20.81 million foreign visitors during the period, the largest number of which came from China.
On the back of the disappointing figures, the National Economic and Social Development Council yesterday reduced its forecast for foreign tourist arrivals this year from 37 million to 33 million, well down on the record 40 million people who visited Thailand in 2019, the last full year before the COVID-19 pandemic. This comes after the Thai central bank similarly cut its projection for foreign arrivals this year from 39.5 million to 37.5 million in May.
The Thai tourism industry, the region’s largest, has struggled to recover from the impact of the COVID-19 pandemic, which caused international tourism arrivals to plummet from 6.7 million in 2020 and then to just 428,000 in 2021. Thailand received 35.54 million foreign tourists last year, an increase of more than a quarter on 2023’s figures. But the latest figures suggest that the recovery may have crested, raising questions about the short to medium-term outlook for the economically pivotal industry.
It is hard to pinpoint a single cause for the slump. One is the growing competition from other regional destinations, particularly Vietnam, the Southeast Asian tourism market that has performed the best since COVID-19. Last year, Vietnam welcomed 17.5 million international visitors, just shy of its pre-pandemic record of 18 million.
Thailand is also battling growing concerns about safety. In a horrific incident earlier this month, two Malaysian tourists were set on fire in downtown Bangkok, a story that has gained widespread international coverage. The country has also been associated with online scamming operations, following the high-profile kidnapping in January of the Chinese actor Wang Xing, who was later rescued from a scamming center in Myanmar. The ongoing border dispute with Cambodia, which flared into a five-day conflict late last month, is also likely not helping Thailand’s international image as a safe and welcoming destination.
According to the Bangkok Post, Thanapol Cheewarattanaporn, president of the Association of Thai Travel Agents, said that the government “has been slow to reassure tourists about safety or take action to instill confidence in prospective travellers.”
The scam issue has reportedly had a particularly strong impact on the perception of tourists from China, whose numbers have been particularly depressed since the lifting of China’s strict “zero COVID” policy in late 2022. While China has been the top source of international visitors in the year to August 17, with 2.93 million visitors to Thailand, the figures are also on track to fall far short of the 6.7 million Chinese nationals who visited last year, let alone the record 11 million who visited Thailand in 2019.
Since COVID-19, the Thai government has introduced a number of initiatives to stimulate the tourism sector. It has loosened visa restrictions, introducing new long-term “digital nomad” visas, while permanently waiving visa requirements for Chinese nationals in a reciprocal arrangement with Beijing.
This week, Finance Minister Pichai Chunhavajira announced an initiative known as TouristDigipay, which will allow foreign tourists to convert cryptocurrency into Thai baht for everyday purchases. The scheme, which the Thai government describes as the world’s first program of its kind, will run for a trial period of 18 months. Most controversially, the government has unveiled a plan to legalize casino gambling, although this has recently stalled due to public opposition. The fact that these efforts have so far failed to revive the tourism sector only adds to the economic and political challenges facing the weak Pheu Thai government.