War in Israel and reduced confidence following last week’s Bangkok mall shooting are expected to cause a drop in foreign arrivals next week. However, the private sector hopes that the visa exemption scheme can revive the market in the next two months. The Tourism and Sports Ministry reported a 9.86% decrease in foreign arrivals last week (Oct 2-8), with a significant decline in Chinese visitors. Many Chinese tourists chose to return home early to avoid crowded flights at the end of the Golden Week holiday, while others expressed safety concerns after the shooting at Siam Paragon on Oct 3.
Renewed concerns about the ongoing conflict between Israel and Hamas militants may impact the flow of inbound tourists, particularly from the Middle East. As a result, the ministry predicts a decline in arrivals to 480,000 next week. Tassapon Bijleveld, executive chairman of Asia Aviation, the holding company of Thai AirAsia, stated that the average load factor on Chinese routes is still weak at around 70% due to various negative factors. While the visa exemption scheme is considered effective in attracting the Chinese market, there will likely be a short-term lull in Thai tourism due to reduced confidence in tourist safety. Mr. Tassapon suggested that the official visit to China led by Prime Minister Srettha Thavisin and the Tourism and Sports Ministry next week should focus on restoring confidence during the visa-free period, which ends in February next year. Tourists are primarily concerned about both safety issues and a sluggish economy.
Mr. Tassapon emphasized that the impact of the Chinese market is a greater concern for aviation than the war in Israel, which has not yet affected airline operations in terms of fuel costs. He also noted a surprising drop in jet fuel prices this week, from $120 per barrel to approximately $105, requiring further monitoring to determine long-term pricing trends. Phunut Thanalaopanich, president of the northern chapter of the Thai Hotels Association, reported that the Chinese market in Chiang Mai has not been robust this year. However, most Chinese tourists in Chiang Mai, primarily families, did not cancel their bookings abruptly following the Bangkok shooting, as they perceived it as a single event occurring far away.
Mr. Phunut stated that the average hotel occupancy rate in Chiang Mai in October was 55%, a year-on-year decline attributed to a sluggish domestic market. The extended rainy season this year prevented tourists from planning their trips, which typically fills up hotel rooms starting from this month. He expressed optimism that the visa-free scheme will help revive the Chinese market in the coming months, but also expressed concerns about screening measures. The government should strengthen security measures to prevent illegal businesses from exploiting the visa exemption. If reports of illegal firms and crimes targeting tourists circulate on Chinese social media, it would slow down the recovery process.
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