Thailand makes progress toward ambitious 2024 tourist targets
The strong recovery of Thailand's tourist numbers has provided a welcome boost for the country's airlines, although the China market is still lagging and will be the key to further improvement.
When Thai Airways reported its first-half earnings, it highlighted the overall tourism rebound as a major factor behind the revenue growth that is keeping it profitable, despite mounting cost pressure.
Tourism is a vital part of the Thai economy, and it was one of the most popular leisure destinations in the Asia Pacific region before the COVID-19 pandemic. The government recognises this, so it has introduced a range of initiatives to encourage the return of tourists.
The Thai government has set an annual tourist goal for 2024 that is much closer to the 2019 total, and also set a target for the rebound of visitors from China, which is Thailand's most important market.
Halfway through the year 2024, overall tourist numbers appear on track to meet the government's target. However, it is less certain that the Chinese goal will be reached.
Fortunately, tourist numbers from other important markets have essentially reached - and in some cases even surpassed - their pre-pandemic levels.
- Visitor arrivals were up by 50% year-on-year in Jun-2024, reaching 90% of the 2019 figure.
- The government is aiming for 35 million visitors this year – versus nearly 40 million in 2019.
- This year’s target for Chinese visitors is 8.2 million, and there were 3.4 million in the first six months of 2024.
- Visitors from Malaysia, South Korea, Australia, the UK, India, Malaysia and Russia are close to, or beyond, 2019 levels.
- International capacity for Thai Airways, and Thailand overall, is at approximately 83% of 2019 levels.
With the tourist recovery gap closing, the government's 2024 target should be surpassed
Thailand's visitor numbers were up by more than 50% in Jun-2024 versus the same month in 2023, as this chart (below) from CAPA - Centre for Aviation and the Thailand Ministry of Tourism and Sports shows.
Tourist numbers have been approaching closer to pre-pandemic levels this year - in Jun-2024 the monthly total reached almost 90% of the figure from 2019.
Thailand: visitor numbers, by month, for 2019 and 2022-2024
Thailand had 39.8 million visitors in 2019, but the level plummeted during the COVID pandemic years.
It rebuilt to 11.2 million in 2022, and 28.2 million in 2023. The government has set an ambitious target of reaching 35 million in 2024.
For the first six months of 2024 Thailand had 17.5 million tourists. This means that tourist numbers so far are exactly on course to at least meet the full-year goal. Recent moves to ease visa rules should help it achieve this target.
Thailand: annual visitor numbers, 2019-2024 year-to-date
Among the initiatives to spur tourist flows has been the increase in the number of countries qualifying for a visa waiver programme. This has been expanded by 36, to a total of 93 countries, effective from 15-Jul-2024.
Thailand had previously signed an agreement with China for permanent reciprocal visa exemptions for tourists. This is particularly important because China was its leading source of tourists before the pandemic.
Chinese travellers will play a large role in further tourist growth for Thailand
There were almost 11 million Chinese visitors to Thailand in 2019, making China its largest source of tourists by a significant margin. When China's pandemic-era travel restrictions were finally removed in 2023, the Thai government was hoping for a fast rebound in tourist flows - although this did not occur.
Thai tourism officials aimed for 4 million to 5 million Chinese visitors in 2023, but the total for that year ended up at just 3.5 million.
In Dec-2023 the Tourism Authority of Thailand set a goal of lifting Chinese tourism arrivals to 8.2 million in 2024.
Steady progress has been made in 2024: Chinese tourists to Thailand were up nearly 70% year-on-year in Jun-2024, after much larger gains in the previous five months. The Jun-2024 total is still 63.1% of the same month in 2019 - a big improvement, but still a long way to full recovery.
The cumulative total for 2024 shows that significant gains in monthly numbers will be needed to reach the tourism authority's 2024 full-year target. Total Chinese visitors in the six months through Jun-2024 are at 3.4 million - this is less than half of the 8.2 million goal.
Thailand: monthly visitors from China, 2019 and 2022-2024
Japan is the only other one of Thailand's main tourist markets that is lagging significantly
Most of Thailand's other major tourist markets are faring better.
Monthly visitors from Malaysia, South Korea, Australia the UK and India are all essentially at 2019 levels. Numbers from Malaysia and Russia are ahead of pre-pandemic levels.
Visitors from the US are still at 87.4% of the corresponding figure in 2019, and those from Japan at 56.4%. However, both these markets accounted for less than 5% of total visitors in 2019.
In contrast, the China market accounted for 27.6% of Thailand's visitors in 2019, and 19.3% in Jun-2024. So an improvement in this tourist flow would have the largest influence on moving overall visitor numbers toward a full recovery.
Thailand's visitor arrivals by market of origin, 2019
International airline capacity in the Thai market is also recovering well
The strong rebound in overall tourism has obviously occurred in parallel with rising capacity.
The chart below shows that Thailand's international seat capacity - including local and overseas airlines - has continued to move closer to 2019 levels. It reached 83.4% of 2019 levels for the week of 12-Aug-2024.
Capacity recovery for Thai Airways is very close to the overall number, at 82.7%.
Thailand's international capacity, as measured in weekly seats, from 2019
Chinese demand trajectory will reassert itself, but in the meantime other markets are proving vital
Many Asia Pacific countries are waiting for the Chinese tourism tap to be fully turned on again, but it is particularly important for Thailand.
Visitor numbers from China were growing strongly in the years before the pandemic - more than doubling in the five years through 2019.
There is no reason to doubt that this rate of growth will return, which will drive Chinese visitor numbers beyond 2019 levels.
The only question is when this will occur.
However, Thai tourist authorities are cognisant of the need to maintain a diverse range of markets to reduce the reliance on the Chinese flows.
So it is encouraging to see many other major markets rebounding so strongly, and in some cases already going beyond 2019 levels. It is these markets that have helped Thailand's tourism industry recover while Chinese demand slowly gathers momentum.