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Thailand’s Tourism on the Decline? Unthinkable Downtrend Amid Rising Expenditures and Political Crisis May Spell Doom!

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The tourism sector finds itself wrestling with forecasts of an unusually lackluster off-peak season, defined by tepid demand, rising operational expenses at tourist hotspots, and the aftermath of tropical tempests. Charoen Wangananont, acting president of the Thai Travel Agents Association, underscored the fact that current sales figures for outbound travel packages are trailing noticeably behind those recorded in the pre-Covid era.

This, he implies, is due to a growing sense of vigilance and thriftiness exhibited by individual consumers and businesses alike, with both segments opting to curb their travel expenditure. Intriguingly, he also noted a change in group tourism dynamics, particularly centered around governmental agencies, which have traditionally provided a steady stream of customers for tour operators. However, in the current climate of political instability, these agencies have become increasingly wary of assigning budget for travel, explained Charoen. Consequently, a large number of them have opted to scale back on foreign trips to preclude any accusations of extravagant spending.

Nevertheless, Charoen pointed out that a certain segment of the populous, those with significant spending capacity, have decided to press on with their international travel arrangements, thereby unveiling a potentially new trend in the post-pandemic landscape. Despite the overall gloomy outlook, there are some silver linings!

However, the transformation hasn’t come without its own set of challenges, especially for destinations such as South Korea that used to attract tourists with their affordable prices. The downturn in package sales can partly be blamed on the recent Typhoon Khanun, which gripped South Korea last week, resulting in a reduction of available routes to the country. The availability is now somewhere between 60% and 70% of what it was back in 2019. Reacting to this dip in demand, airlines and tour operators have slashed their charges considerably, with package prices falling to a meager 75% of the rate applicable prior to the pandemic.

Charoen also noted that companies have refrained from hosting incentive programs in South Korea due to red tape in the K-ETA application process. Looking ahead, although forecasts predict a revival in outbound travel commencing next month, the upswing in trip costs to sought-after destinations such as Japan could discourage Thai sightseers.

Charoen explained that an increase in the price of service items like transport and accommodation in Japan might hike package prices by 15% to 20% during the forthcoming high season, as reported by Bangkok Post. Projections for this year suggest the outbound market will shrink to 6-7 million individuals, representing a fall from 2019’s figure of 11 million.

Charoen conjectured that it might take a couple of years to regain the volume of outbound trips witnessed in 2019, given that every destination now comes with a steeper price tag, often beyond the financial means of the average Thai. He disclosed that travels to premium destinations like Europe, for instance, could set tourists back by as much as 100,000 baht per person.

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