Bank monitors Q2 domestic tourism

BANGKOK  Kasikorn Research Centre estimates domestic tourism during April to June this year should reach 35.10 million trips, but monthly growth rates are patchy averaging out at a little more than 4%.
The think-tank business said the second quarter usually required more marketing and promotions to secure bookings in a very highly competitive and diverse market.
The bank said the government’s tax incentives and various activities to promote domestic travel have been successful.
“It is expected that domestic travel should improve during Q2 given a more favourable domestic environment than the same period last year, but growth may be less dramatic because some consumer segments continue to be pressured by the weak economic recovery,” it said.
inside no 1The centre estimates that Thais will make around 35.10 million domestic excursions during Q2, this year, increasing 4.6% year-on-year, which was considerably higher than the poor 1.4% year-on-year growth reported for the same quarter last year.
Domestic tourism would generate around THB177 billion in cash flow, at around 4.1% year-on-year, versus the 0.8% year-on-year growth reported for Q2 last year.
The projections take into account a number of factors, including an improved domestic trade environment.
Normally, second quarter domestic tourism is busier than the first quarter, but the sluggish economy and high household debt dampened spending in some consumer segments, so Q2 travel may grow only slightly higher than that what was required last year.
Over the remainder of the year, close attention must be paid to domestic economic conditions that remain volatile and household debt that continues to undermine consumer spending, thus likely hurting domestic travel now and into the high season.
The centre added another factor that must be monitored is the Ministry of Finance’s proposal to raise the ceiling on domestic travel expense for personal income tax deductions during this tax year to a maximum of THB30,000, versus the current THB15,000. If approved by the Cabinet, that initiative would help promote domestic tourism substantially.
However, travel-related businesses may need to align their strategies to attract specific segments such as leisure and MICE tourists, while maintaining good service quality.
Kasikorn Research Centre is a subsidiary company of Kasikorn Bank, which conducts tourism and business research mainly on Thailand’s economy including tourism with reliable recommendations and indicators on business prospects.

sourced:ttrweekly.com