Chinese tourist arrivals in Thailand are tumbling, dragging down overall visitor growth in the Southeast Asian nation and dimming the outlook for an economy that relies on spending by holidaymakers.
Travelers from China slid 12 percent in August, the biggest drop in more than a year, keeping the overall pace of visitor growth near a 16-month low.
Thai officials are rattled as Chinese visitors are the top source of foreign receipts in an industry that makes up about a fifth of the economy.
The trigger for the drop was a tour boat accident off Phuket in July that killed dozens of Chinese holidaymakers, sparking safety concerns.
Thailand’s image in China has also been hurt by a dengue outbreak, the strength of the baht and, most recently, a viral video of an airport guard apparently punching a Chinese tourist.
DOWNSIDE RISK
“The negative growth in Chinese arrivals is a downside risk in the second half of 2018,” said Kampon Adireksombat, the chief economist at Kasikorn Securities in Bangkok.
The tourism slowdown and the impact of global trade disputes would cut Thai economic growth to 4.2 percent next year from an estimated 4.5 percent this year, Adireksombat said.
The Thai military government this week moved to limit the damage from the video of the attack on the Chinese tourist, saying on Twitter that Thai Prime Minister Prayuth Chan-ocha regrets the incident — underlining the administration’s sensitivity to bad press in China.
The tourism sector has a history of bouncing back from setbacks. The Bank of Thailand expects arrivals to improve and anticipates more than 38 million visitors this year — equivalent to more than half the Thai population.
Other government figures estimate that Chinese travelers contribute close to a third of 2.09 trillion baht (US$65 billion) in foreign tourism revenue.
The recovery might take longer this time around because so many Chinese died in the boat accident, Kampon said.
Tourism trade bodies are urging the government to take steps such as temporarily providing double-entry visas or visa-free travel to Chinese visitors. Investors are fretting too: The Stock Exchange of Thailand Tourism & Leisure Index is down 14.5 percent this year, compared with a 0.1 percent climb in the overall stock market.
EMPTY SEATS
The Tourism Council of Thailand predicts Chinese arrivals would plunge about a quarter to 1.9 million this month through December from a year earlier.
“There used to be seven to 12 charter flights per day from China to Krabi,” council president Ittirith Kinglake said. “Now it’s down to three flights per day, with some having two to three people on board.”
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