Tourist rush bolsters outlook for Thailand's economy, currency

Boats waiting for tourists off the coast of Pattaya city, Thailand, on June 26, 2022. PHOTO: EPA-EFE

BANGKOK (BLOOMBERG) - Foreign tourist arrivals into Thailand are set to beat official forecasts with the lifting of pandemic-era restrictions, a rare positive for the nation's Covid-19 battered economy and currency.

International arrivals will total 9.3 million this year, government spokesman Thanakorn Wangboonkongchana said on Wednesday (June 29), citing a tourism ministry forecast.

That is 55 per cent more than the Bank of Thailand's estimate of six million early this month, and seven million predicted by the National Economic and Social Development Board.

The forecast for arrivals to triple to 7.2 million in the second-half of the year from an estimated 2.1 million in the first six months drove gains in the baht to as much as 0.6 per cent against the dollar, the fourth straight day of advance.

Holidaymakers are returning to Thailand in large numbers as global travel demand rebounds in tandem with a decline in new Covid-19 cases and waiver of quarantine in most tourism destinations.

The rush may gain further momentum with the South-east Asian nation ending a pre-travel registration and insurance requirement from July 1.

South-east Asia's second-biggest economy is betting on a tourism revival to drive growth amid increasing headwinds from surging oil prices and accelerating inflation.

China's move to reduce the quarantine period for inbound travellers also fuels optimism about the return of visitors from Thailand's largest tourist market before the Covid-19 pandemic.

The government has stepped up measures for the quick recovery and sustainable growth of the tourism sector and the overall economy, Mr Thanakorn cited Prime Minister Prayut Chan-O-Cha as saying at a conference in Chiang Mai province Wednesday.

The cross-border travel relaxations, a weak baht and pent-up demand for travel will continue to bolster Thailand's tourism outlook, Mr Thanakorn said in a statement.

"The return of Chinese tourists will help bolster the baht and raise GDP growth outlook," said Mr Padon Vannarat, the head of research of Yuanta Securities (Thailand). The economy will receive a significant contribution from tourism in the fourth quarter, the peak season for the industry, he said.

Arrivals are expected to reach 24 million, or around 60 per cent of pre-pandemic levels, by 2024, the World Bank said in a report on Wednesday.

Before the pandemic, the overall tourism-related sector accounted for about a fifth of Thailand's economy and jobs, with nearly 40 million overseas visitors in 2019, according to the central bank.

Chinese tourists made up almost 30 per cent of that total, according to official data.

"There's a huge pent-up demand for international travel after more than two years of the pandemic," said Mr Tawatchai Asawapornchai, deputy managing director of ASL Securities.

"China's travel easing has offered another positive news, but it will take some time for a large number of Chinese visitors to come."

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