Thailand faces tourism industry risk

Facing a dramatic downturn in overseas visitor arrivals due to Coronavirus restrictions, the Bank of Thailand has warned that the nation's tourism industry will face greater risks next year if the Government continues to restrict foreign travellers from entering the country.

With foreign arrivals likley to be downgraded from a projection of 8 million this year and 16 million next year given the deflated tourism outlook, Don Nakornthab, Bank of Thailand Economic and Policy Department Senior Director today advised "if foreign travellers still cannot visit the country, this will impact Thailand's economic growth more severely next year.

"The Government should strike a balance between tourism measures and outbreak containment."

As reported by the Bangkok Post, Thailand's Tourism and Sports Ministry and the National Economic and Social Development Council have already cut their projections for this year's foreign tourist arrivals to 6.7 million and next year's to 12 million.

The difference of 1.3 million foreign arrivals this year in projections from the Central Bank and the two state organisations would result in a 0.5% decline in Thailand's GDP, Don advised, noting that the loss cannot be computed directly into full-year GDP calculations because there are other economic factors to be considered.

Thailand received no foreign tourist arrivals for the fourth consecutive month in July as international travel restrictions remain in place to safeguard against a second outbreak.

Foreign arrivals to Thailand reached 40 million in 2019, with revenue generated from the tourism industry contributing almost 20% of GDP.

Don fears that with inbound flight restrictions still in place, the ratio of foreign travellers is expected to shrink by 100% year-on-year between April and December.

Explaining that the Government should consider looking into proper measures to allow foreign travellers to return to stir tourism and economic growth momentum, he added "if foreign travellers still cannot visit the country, this will impact Thailand's economic growth more severely next year. The government should strike a balance between tourism measures and outbreak containment."

Thailand's economy continued to improve in July, driven by public spending and the relaxation of lockdown measures both in Thailand and abroad.

Image: The Bangkok Observation Tower.