For an industry that went from hero to zero when the Covid-19 pandemic erupted, look no further than Thailand’s tourism sector. In 2019, the “land of smiles” welcomed 39.9 million foreign tourists, a record high. In 2020, the number of arrivals plunged to 6.7 million. The following year, it fell to just 400,000.
The pandemic delivered a hammer blow to Thailand’s economy. With tourism accounting for about a fifth of output and 20 per cent of employment before the pandemic, Thailand’s tourism flows suffered what the International Monetary Fund called a “sudden stop”.
That didn’t abate for some time. Only at the beginning of last year did monthly arrivals exceed 2 million, still down from close to 3.5 million in early 2019. The pandemic’s impact on tourism was felt most acutely in visitor numbers from mainland China, which was also the biggest source of concern about the recovery.
In 2019, Chinese travellers accounted for about 28 per cent of international arrivals and tourist revenue, the largest source market. By 2022, their share had fallen to a mere 2.4 per cent. Even as recently as the end of last year, Chinese tourists constituted just 13 per cent of arrivals.
Beijing’s draconian zero-Covid policy fanned fears about a weak and prolonged recovery in Thailand’s tourism sector. These worries intensified when China’s economy reopened and it became clear that outbound travel would take much longer to return to 2019 levels because of a combination of cheaper and more appealing domestic destinations, reduced airline capacity and geopolitical concerns.
“The fact that Chinese travellers were not desperate to get a on plane to go abroad caught a lot of people off guard, not just in Thailand,” said Ananth Ramchandran, head of advisory and strategic transactions, hotels and hospitality, Asia, at CBRE.
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