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Crackdown on zero-dollar tours may hampers GDP growth

Thailand’s earlier projection of ten million Chinese tourist arrivals this year is likely to fall short of target due to a sharp drop of tourists from China as a result of the government’s crackdown on zero-dollar package tours from China

Boris Sullivan

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The government’s crackdown on zero-dollar package tours from China may have greater impacts on tourism business than earlier projected.

But whether the impacts will affect the GDP or not is yet to be assessed together with the overall economic performance, said Mr Don Nakornthap, senior director of Macro-economic Policy Office of the Bank of Thailand, on Wednesday.

Tourism sector accounts for 11-12 percent of the GDP and the number of tourist arrivals for the month of October has dropped to 2.26 million compared to 2.41 million in September representing 10.1 percent drop, said Mr Don, adding that this has weakened the consumption of tourism-related private sector.

Coupled with the weak purchasing power of the farming sector due to lower prices of farm products, the consumption growth of the private sector for the month of October contracted 1.9 percent against the figure in September.

Don said it was initially projected that the crackdown on zero-dollar package tours from China and the increase of fees for visa upon arrival would cut down the number of tourist arrivals by 200,000 for this year, but it appeared that the real impacts might be far greater than the earlier projection. The actual impacts, he added, will be further assessed.

Thailand’s earlier projection of ten million Chinese tourist arrivals this year is likely to fall short of target due to a sharp drop of tourists from China as a result of the government’s crackdown on zero-dollar package tours from China, said Mr Sinchai Wattanasartsathorn, president of Pattaya Tourism Association.

He pointed out that air ticket bookings to Thailand in China saw 70-80 percent cancellations just as advance bookings of hotels in Bangkok and Pattaya substantially dropped since the crackdown.

Although high season has already arrived in Pattaya since October which will last until next April, the number of Chinese tourists visiting the resort city of Pattaya which is most popular among the Chinese has visibly dropped with two- and three-star hotels most affected, said Mr Sinchai.

Source: Central bank admits crackdown on zero-dollar package tours has greater impacts than earlier projected |

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