Thailand: Tourism operators fret over policy rate hike

Domestic tourism operators are concerned about the hike in the policy rate by the Bank of Thailand as banks may apply the new rate in the near future which could heavily dampen tourism outlook this year.

Chaiyapruk Thongkam, president of the Association of Domestic Travel, said domestic tour operators have just started to earn income during the low season.

More than 50% were able to restart their business by using loans from the banks to prepare necessary services, such as vehicle maintenance.

“Maintaining the same rate for the next two years would be an ideal solution, but at least we hope banks will help keep the rate for the tourism sector until next year or until the industry gets through the crisis in a better shape,” said Mr Chaiyapruk.

The Tourism Authority of Thailand (TAT) aims to secure 160 million domestic trips this year, generating 656 billion baht.

However, the number in the first half was only 59.6 million with revenue of 279 billion baht.

Besides a typically slow market during the rainy season, domestic tourism has also faced dull sentiment due to air travel and car accidents, particularly road safety incidents which caused many casualties and deaths for a tour group travelling from Thailand to Laos on July 31 and also a fatal accident from construction flaws on Rama II Road which is the main road bound for the South.

He said each local tour group also spent less money on shopping as tourists were concerned about the economy.

Corporate clients, which account for 35-40% of the domestic tour market, tend to choose nearby destinations or packages which cost less than 6,000-7,000 baht per head for a 3-day, 2-night programme to save their budget or 3,000-4,000 baht for a 1-night programme.

Meanwhile, tour operators could not benefit much from government spending as those organisations arranged their own trips by using privileges from the “Tour Teaw Thai” subsidy campaign for tour packages, without depending on tailor-made services from tour companies. 

TAT governor Yuthasak Supasorn said the agency is still keeping the same target this year but will put more effort into boosting the frequency of trips to compensate for the lower expenditure.

Under the “Visit Thailand Year 2022-2023” campaign endorsed by the cabinet, the agency rolled out additional promotional projects during the off-peak season offering tourism products, such as air tickets and hotel rooms, at up to 60% off in an attempt to stimulate demand from now until September.

Source: https://www.bangkokpost.com/business/2369398/tourism-operators-fret-over-policy-rate-hike