Chinese tourists, which have made Thailand their third-favorite destination to visit, may increasingly turn elsewhere after the explosion near a Hindu shrine in Bangkok.
A deadly bomb attack in Bangkok this week has raised a familiar question: How long before the tourists come back?
The explosion could have a longer-lasting impact on visitor numbers compared with previous incidents in the past decade, Standard & Poor’s said.
And there have been many, many incidents in the past decade or so. From violent street protests to devastating floods to the coup last year, at every instance there have been cancellations and fewer tourist arrivals.
But the numbers have always bounced back quickly, with the draw of cheap street food, beautiful beaches, ancient temples and friendly locals winning each time.
Tourism is vital to the Thai economy. It accounts for about 10 percent of gross domestic product — about 20 percent, including indirect effects, according to estimates by Australia & New Zealand Banking Group Ltd. Almost 25 million foreign visitors flocked to the country last year, roughly a quarter of all visitors to Southeast Asia. The government had forecast an increase to about 30 million this year before the attack, a bonus that the country desperately needs, with its manufacturing and exports in a slump.
So how bad can it get? Tourism could drop 10 percent in the short term, said Adithep Vanabriksha, Bangkok-based chief investment officer at Aberdeen Asset Management Co. Thailand may also lose its ranking as the third most-visited destination for Chinese after the bombings, according to Margaret Huang, an analyst at Bloomberg Intelligence. Chinese tourists made up 28 percent of all visitors to Thailand in the second quarter, and about 40 percent of them prefer to stay in 4- or 5-star hotels, spending more than the average traveler.
Admittedly, the shine had partly faded: Bangkok lost its spot as top destination for international travelers last year to London on the MasterCard Global Destination Cities Index. The murder of two British tourists last year on the southern island of Koh Tao had created unease, and matters weren’t helped by Prime Minister Prayuth Chan-Ocha suggesting that foreign tourists wearing bikinis were risking their safety in the country.
What’s in Thailand’s favor this time is a weak baht. It has declined almost 9 percent against the U.S. dollar in the past six months, the biggest loser after the ringgit. So it’s definitely a good deal.
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This article was written by Rina Chandran from Bloomberg and was legally licensed through the NewsCred publisher network.
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Photo Credit: Thailand's beaches are likely a little less-crowded these days as tourists stay away because of a recent terrorism attack. Tourism Authority of Thailand
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