BANGKOK - Tourist arrivals in Thailand have been promising - with 3.12 million international travellers turning up in the first seven months of the year.

The authorities and industry players are optimistic but the nation, which before the Covid-19 pandemic relied heavily on tourism, is not out of the woods just yet.

"Honestly, I don't think we are even halfway to rebuilding tourism in South-east Asia. It went down to such low levels that everything compared with last year is a big increase," said Ms Hannah Pearson, founding partner of travel consultancy firm Pear Anderson.

Several challenges threaten to dampen the "slow but steady" recovery, including high inflation rates and operational and manpower issues that will increase travel costs, say industry operators.

External factors, like the Ukraine-Russia war that has pushed up energy prices, the reimposition of travel rules in some countries seeing Covid-19 resurgences and concerns over the global monkeypox outbreak, will continue to cloud Thailand's efforts to rebuild the crucial tourism sector.

"But at least it is steady progression, instead of the one step forward, two steps back situation last year," added Ms Pearson, whose firm specialises in the South-east Asian market.

Since the country dropped its last slew of border entry rules on July 1 - removing the Thailand Pass registration and compulsory insurance - foreign arrivals have grown by 50 per cent, crossing the one million mark per month for the first time since the pandemic.

Thailand was one of the first places in the region to ease border restrictions, beginning with the experiment to ring-fence the island of Phuket for tourists in July last year.

And, with each move to scale back entry rules, Travel agencies like Contiki started to see the gradual return of tourists.

"Demand has consistently increased for our Thailand itineraries in line with restrictions continuing to be relaxed," said a spokesman, adding that these offerings are its top sellers in Asia.

Currently, travellers need to show only their vaccine certificate or a negative polymerase chain reaction test to enter.

According to official figures, about 1.07 million tourists visited last month, with those from Malaysia, India and Singapore leading the pack.

This yielded 125 billion baht (S$4.83 billion) in travel receipts.

As Thailand heads into peak season for its long-haul travel market, this monthly figure will increase, said Association of Thai Travel Agents' (Atta) head of public relations Pilomrat Isvarphornchai.

"For October to December, we are predicting 1.5 million inbound travellers monthly," she added, noting that the figures are "not unrealistic".

This aligns with the 2022 target of 10 million tourists set by the Tourism and Sports Ministry.

Still, it pales in comparison with 2019 figures, with 40 million tourists contributing 1.91 trillion baht to the Thai economy.

Without visitors from China - which continues to impose strict restrictions on inbound arrivals, thereby stifling outbound travel - it will be hard to return to 2019's figures, said Ms Pilomrat.

Globally, the cost of air tickets has also gone up by at least 20 per cent, said Mr Toni Tran, managing director of Bravo Asia Tour, which caters to clients from the United States, Europe and Australia.

This is caused not just by higher fuel and operation costs, but also by limited international flights, as some airlines have not resumed pre-pandemic routes or flight frequency, he added.

There is also a manpower crunch in the tourism and hospitality sector, said Mr Tran.

His agency's office in Chiang Mai has five workers, half the number before the pandemic.

"We don't want to recruit more people just yet, we worry more problems will come up for the industry," he said.

A July survey of young Thai job seekers found that tourism and hospitality work ranked the least popular among 12 industries, underscoring the uncertainty in the sector.

Ms Pilomrat said about 50 per cent of Atta's members remain shut, and those which have reopened might not operate full-time.

Ms Pearson said: "These shifts have caused breakages in the travel chain - people have to find new contacts or operators to work with. Things are just messier."

Recent proposals have caused a stir in the struggling sector, specifically plans to impose a 300 baht tax on all foreign arrivals and discussions over a dual-pricing scheme for hotels that would charge foreigners higher rates.

However, governor of the Tourism Authority of Thailand Yuthasak Supasorn told The Straits Times that the 300 baht tax will start only in "one or two years, when travellers are ready".

He dismissed the idea of the dual-pricing of hotel rooms.

"We cannot rush to collect money that will ruin tourist sentiment to come to Thailand," he said.

Ms Pilomrat said there needs to be continued support for domestic tourism, which has propped up the sector in the last two years.

In June, a programme where the government co-pays for hotel rooms, food and attractions was extended.

"Looking at the situation, we still need support from domestic tourism for the rest of 2022," she added.

Measures to ease travel into Thailand

- On July 1, Thailand removed the need for registration using the Thailand Pass for inbound travellers. It cancelled a US$10,000 health insurance requirement for foreign arrivals.

- The immigration entry card, TM6, was temporarily suspended for international passengers in June to ease congestion at airports.

- A visa fee exemption has been proposed for international arrivals, along with a possible extension to the period of stay for tourist visa holders.