thailand tourism gdp contribution 2020

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Thailand’s tourism sector drives economic recovery

Executive Director and Asia-Pacific Chief Economist, S&P Global Market Intelligence

Thailand has shown a gradual economic recovery from the COVID-19 pandemic during 2022, helped by rising international tourism arrivals. Real GDP growth rose from 1.5% in 2021 to 2.6% in 2022, with growth momentum expected to improve further in 2023.

The latest S&P Global Thailand Manufacturing PMI survey results for February 2023 continued to signal expansionary conditions for manufacturing output and new orders. Due to the importance of international tourism for the Thai economy, the recovery of the tourism inflows is expected to be a key factor that will help to support improving economic growth momentum during 2023.

Thailand: Economic recovery from pandemic

Thailand recorded real GDP growth of 2.6% in 2022, representing a relatively modest pace of economic recovery from the recessionary conditions caused by the COVID-19 pandemic. Thailand's growth rate in 2022 was quite moderate in comparison with other large ASEAN economies such as Malaysia, Vietnam and Philippines, which posted very high growth rates as they rebounded from the pandemic.

A key driver for improving economic growth in 2022 was the recovery of private consumption, which grew by 6.3% compared with just 0.6% y/y growth in 2021. Private investment growth also improved from a pace of 3% in 2021 to 5.1% in 2022. However public investment contracted by 4.9% in 2022, while government consumption was flat.

Strong growth in private consumption and investment as well as rising energy import prices helped to boost import growth, which rose by 15.3% in 2022, while exports rose by just 5.5%, measured in USD terms. Consequently, the trade balance narrowed from USD 32.4 billion in 2021 to USD 10.8 billion in 2022.

Due to the important contribution of international tourism to Thailand's GDP, a key factor that constrained the rate of recovery of the Thai economy in 2022 was the slow pace of reopening of international tourism, although this gathered momentum in the second half of 2022.

Thailand's manufacturing sector has also shown some improvement in momentum, with the S&P Global Thailand Manufacturing PMI for February 2023 having shown strong expansion. The latest PMI data signalled further growth in output and new orders. The PMI rose for the third month running to 54.8 in February, from 54.5 in January indicating improving business conditions for the 14th consecutive month.

New orders for Thai manufactured goods expanded at the quickest pace in five months. The easing of COVID-19 disruptions supported the latest expansion. Foreign demand for Thai manufactured goods continued to shrink, however, amid challenging external conditions.

Meanwhile supply constraints persisted within the Thai manufacturing sector. Vendor performance deteriorated for the tenth straight month on the back of higher demand and transportation delays. Concurrently, input cost inflation rose in February, reflecting higher raw material costs and heightened shipping cost pressures.

Thailand's headline CPI inflation rate has eased to 5.0% y/y in January 2023, compared with 7.9% y/y in August 2022. The Monetary Policy Committee (MPC) of the Bank of Thailand decided to raise the policy rate by 0.25% from 1.25% to 1.50% at their Monetary Policy meeting on 25 January 2023. This follows three 25bp rate hikes by the MPC in 2022, In 2022, the Monetary Policy Committee (MPC) decided to increase the policy rate three times by 25 basis points each in August, September and November. As a result, the policy rate stood at 1.25 percent compared to 0.50 percent at the end of 2021The MPC assessed that headline inflation will decline, while medium-term inflation expectations remain anchored within the target range.

Recovery of international tourism sector

International tourism was a key part of Thailand's GDP prior to the COVID-19 pandemic, contributing an estimated 11.5% of GDP in 2019. However, foreign tourism visits collapsed after April 2020 as many international borders worldwide were closed, including Thailand's own restrictions on foreign visitors.

As COVID-19 border restrictions were gradually relaxed in Thailand and also in many of Thailand's largest tourism source countries during 2022, international tourism showed a significant improvement during the second half of the year. The number of international tourist arrivals reached 11.15 million in 2022, compared with just 430,000 in 2021. However, the total number of visits was still far below the 2019 peak of 39.8 million, indicating considerable scope for further rapid growth in the tourism sector during 2023.

Thailand economic outlook

Despite the upturn in private consumption and international tourism arrivals in 2022, the overall pace of economic expansion was relatively moderate, at just 2.6%. Easing of pandemic-related travel restrictions during 2022 has also allowed a gradual reopening of domestic and international tourism travel, which gathered momentum in the second half of 2022.

With more normal conditions expected for international tourism travel in 2023, this should provide a significant boost to the economy. Due to the importance of tourism inflows from mainland China prior to the pandemic, the reopening of mainland China's international borders will be an important factor contributing to the further recovery of Thailand's tourism market.

Helped by the continued recovery of the international tourism sector, some upturn in GDP growth to a pace of around 3.5% is expected in 2023.

Over the next decade Thailand's economy is forecast to continue to grow at a steady pace, with total GDP increasing from USD 500 billion in 2022 to USD 860 billion in 2032. A key driver will be rapid growth in private consumption spending, buoyed by rapidly rising urban household incomes.

The international tourism sector will continue to be a dynamic part of Thailand economy, buoyed by rapidly rising tourism arrivals the populous Asian emerging markets, notably mainland China, India and Indonesia.

By 2036, Thailand is forecast to become one of the Asia-Pacific region's one trillion-dollar economies, joining mainland China, Japan, India, South Korea, Australia, Taiwan, Philippines and Indonesia in this grouping of the largest economies in APAC. The substantial expansion in the size of Thailand's economy is also expected to drive rapidly rising per capita GDP, from USD 6,900 in 2022 to USD 11,900 by 2032. This will help to underpin the growth of Thailand's domestic consumer market, supporting the expansion of the manufacturing and service sector industries.

However, rising per capita GDP levels will also put pressures on Thailand's competitiveness in certain segments of its manufacturing export industry. Therefore, an important policy priority for nation will be to continue to transform manufacturing export industries towards higher value-added processing in advanced manufacturing industries.

One of the key economic and social challenges facing Thailand is its rapidly ageing population, which will result in a rising burden of health care and social welfare costs over the next two decades. This will be a drag on Thailand's long-term potential growth rate, making investment in technology and innovation increasingly important to mitigate the economic impact of demographic ageing.

Rajiv Biswas, Asia Pacific Chief Economist, S&P Global Market Intelligence

[email protected]

Purchasing Managers' Index™ (PMI™) data are compiled by IHS Markit for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies, and are available only via subscription. The PMI dataset features a headline number, which indicates the overall health of an economy, and sub-indices, which provide insights into other key economic drivers such as GDP, inflation, exports, capacity utilization, employment and inventories. The PMI data are used by financial and corporate professionals to better understand where economies and markets are headed, and to uncover opportunities.

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.

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A Bangkok vendor serving food in a takeout box. Food services, accommodation, the arts, and entertainment have been hard hit by the COVID-19 economic downturn in Thailand. (photo: Brostock by Getty Images)

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Five Things to Know About Thailand’s Economy and COVID-19

June 23, 2021

Like many countries, Thailand’s economy was hit hard by the COVID-19 pandemic last year. The country’s GDP fell by over 6 percent in 2020 and many workers, especially those related to the tourism sector, lost their jobs.

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Here are five things to know about Thailand’s recent economic challenges and prospects for the recovery:  

• Dark clouds persist and require flexibility in government policies to build back better and stronger.  Economic recovery in 2021 is expected to be sluggish, with growth projected at 2.6 percent in the recently completed 2021 Article IV consultation, and divergent across sectors. Prospects for a near-term recovery are challenged by an aggressive third wave of the pandemic. This environment calls for flexibility and careful coordination among the fiscal, monetary and financial sector policies to adapt to fast changing circumstances. Most important to a resilient recovery at this juncture is the vaccine policy. Accelerating and ensuring adequate distribution of vaccines is critical to attain herd immunity, put an end to the pandemic and lay the groundwork for a strong recovery.
• Mutually reinforcing policies are needed to support the recovery with fiscal policy at the center of the policy response.  A premature withdrawal of the support measures would not be prudent before a recovery is well underway. To help accelerate the recovery, a more ambitious fiscal expansion is warranted with spending focused on scaling up of public investment and protecting the vulnerable, including through better targeted social transfers. As the crisis subsides and the recovery strengthens, Thailand will need to initiate a medium-term revenue mobilization strategy  to rebuild fiscal buffers and ensure fiscal sustainability. Rebuilding fiscal buffers after the pandemic will require additional effort in both revenue generation and expenditure prioritization. Targeted and more effective financial sector support to hard hit firms and households, complemented with additional monetary accommodation, would also support the recovery.
• Thailand’s dependence on contact-intensive sectors and long-standing structural issues, such as high informality—evident before the pandemic—warrant a strong push to adapt the economy to the post-pandemic world.  Further scaling up of investment, particularly for digital infrastructure, combined with improving training and education outcomes and promoting innovation will catalyze the economy’s digital transformation and mitigate the possible long‑term economic damage from the pandemic. The authorities see the crisis as an opportunity to transform the tourism sector from mass and low‑cost to high‑end and low-density tourism, while encouraging domestic tourism, to reduce the sector’s dependence on tourism‑related infrastructure and natural resources. To facilitate a safe reopening for the tourism sector, Thailand added tourism employees as essential workers in the vaccination queue and plans to reopen to international tourists from July 1, under the " Phuket Sandbox " initiative, allowing free movement of fully vaccinated tourists on the island. The COVID‑19 crisis also offers an opportunity to better align development policies with climate objectives to strengthen the recovery and economic resilience, and place Thailand on a firm path to meeting climate mitigation goals. An efficient carbon pricing would encourage a gradual shift to cleaner energy alternatives, reduce greenhouse gas emissions and air pollution, and help in transitioning to a decarbonized economy. 

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Thai GDP in 2021 recovers from contraction in 2020, but tourism sector still nowhere near pre-pandemic levels

Thailand’s gross domestic product (GDP) in 2021 grew by 1.6 per cent, recovering from a 6.2-per-cent contraction in 2020, the government reported Monday. However, the country’s vital tourism sector continues to suffer as the pandemic’s impact lingers on.

The Office of the National Economic and Social Development Council (NESDC) released economic figures for the last quarter of 2021. The GDP in the fourth quarter rose 1.9 per cent year-on-year, following a drop of 0.2 per cent in the third quarter. 

The quarterly rebound was driven by increased export value, government consumption expenditure, as well as the country’s reopening in November, the NESDC said.

According to the report, the full-year number of foreign visitors in 2021 was around 342,000, with the majority coming from Europe. The number shows a 99 per cent decline compared to pre-pandemic figures of nearly 40 million in 2019.

Despite recovery in most sectors, the contribution from the hospitality and food sector still remains weak by dropping eight quarters in a row, the report shows. The 2021 full-year figure of the sector dipped 14.4 per cent from last year. 

In 2021, Thailand recorded only 150 billion baht of tourism income from foreigners, compared to 1.85 trillion generated in 2019. The NESDC expects 470 billion baht of tourism income from foreigners in 2022 with 5.5 million tourists arriving.

2022 outlook 

Looking ahead, the NESDC projects the economy to expand in the range of 3.5 – 4.5 per cent this year thanks to improved domestic demand and domestic tourism, export expansion, and public investment.

The report said the current outbreak of the Omicron variant remains a concerning factor to the economy. However, the NESDC estimates that the government is unlikely to impose strict control measures given the country’s vaccination status and low death rates.

Apart from uncertainty from the pandemic, rising headline inflation and mounting household debts also pose risks to the Thai economy, which could  jeopardize the recovery momentum, the NESDC added.

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Reimagining travel: Thailand tourism after the COVID-19 pandemic

Thailand’s economy is reliant on international tourism, a once-flourishing sector that has been impacted by pandemic restrictions. But there have been continual government efforts to boost domestic travel, and measures to support returning international demand after Thailand began reopening to vaccinated international travelers from 63 countries on November 1, 2021. 1 Pasika Khernamnuoy and Katie Silver, “Thailand reopens to vaccinated tourists from over 60 nations,” BBC, November 1 2021, bbc.com. Even as the world addresses emerging variants of the virus, Thailand’s lessons can act as a guide for other tourism-dependent countries facing similar dilemmas as they prepare for the resurgence of international travel.

A heavy blow, adjustments needed to support recovery

In 2019, Thailand ranked eighth globally in international tourist arrivals, with China being a key source market. 2 United Nations World Tourism Organization (UNWTO). Thailand recorded a high of 40 million visitors in 2019, with the top three spending categories for inbound visitors that year being in accommodation (28 percent), shopping (24 percent of spending), and food and beverages (21 percent). 3 “Summary of tourism income and expenses from foreign tourists entering Thailand in 2019,” Ministry of Tourism & Sports, October 28, 2020, mots.go.th. Furthermore, the Thai tourism sector created 36 million jobs between 2014 and 2019. 4 “Dashboard SME big data,” Office of Small and Medium Enterprises Promotion, accessed October 2021, sme.go.th.

Unfortunately, the pandemic and related restrictions have hit travel particularly hard, as international travel plunged. Passengers on international flights to Thailand dropped by 95 percent in September 2021, compared to the previous year. Hotels, in turn, only filled 9 percent of their rooms (Exhibit 1).

This decline in visitors had an outsize impact on tourism spending, as international travelers spent significantly more than their local counterparts (Exhibit 2). For instance, in 2019, international travelers made up 33 percent of overall travelers in Thailand yet accounted for almost 60 percent of all tourism spending—international tourists spent $1,543 per traveler on average, compared to $152 by domestic travelers. 5 “Tourism statistics 2019,” Ministry of Tourism & Sports, accessed October 2021, mots.go.th. This drop in expenditure undoubtedly caused a ripple effect on Thailand’s food and beverage retail industries, which include 1.2 million small and medium-size enterprises (SMEs). 6 “How to start business,” Office of Small and Medium Enterprises Promotion, accessed October 2021, sme.go.th.

Recovery appears to be on the horizon for Thailand. Assuming virus recurrence, slow long-term growth, muted world recovery, and minimal changes to global tourism strategies, Thailand’s tourism sector could only recover to pre-crisis levels by 2024.

Given that Thailand’s GDP relies significantly on foreign tourism income, the domestic tourism market alone is not sufficient to bring the nation’s tourism revenue back to 2019 figures; the sector’s recovery would depend on a resurgence in international travel (Exhibit 3). Globally, this recovery scenario would likely reshape the landscape of the world’s travel industry and create a strong imperative for both the public and private sectors to act to ensure the industry’s survival.

Efforts to stimulate tourism

Thailand has deployed various efforts to compensate for the loss of inbound tourism. Given that for most of the first quarter of 2020, Thailand saw less than 1,000 daily COVID-19 cases nationwide, with cases not rising above 4,000 until November 2020, domestic tourism was still a viable option for travelers. The Thai government’s attempt to boost domestic travel took the form of providing subsidies for hotel stays and flights for travelers. The government also rolled out measures to stimulate international travel to Thailand’s beach destinations and attract high-end travelers from international markets.

Travel together—stimulating domestic tourism

In August 2020, the Thai government launched the Rao Tiew Duay Gun (We Travel Together) program, where it set aside a budget of $640 million to help boost domestic tourism. 7 “Thailand approves domestic tourism package worth 22.4 billion baht,” Tourism Authority of Thailand Newsroom, June 17, 2020, tatnews.org.

The government subsidized a total of six million nights of hotel accommodation at 40 percent of normal room rates. The subsidy was capped at 3,000 baht ($100) per night for up to five nights. Subsidies for other services, including food, were capped at 600 baht ($20) per room per night. This subsidy was initially limited to facilities outside tourists’ home provinces, but that restriction was lifted in the second phase of the rollout in December 2020. In addition, domestic tourists traveling by air would qualify for a government refund of 40 percent of the ticket price. This was capped at 1,000 baht ($32) per seat, with a quota of 2 million seats.

The program reached its total quota of six million hotel-room nights in February 2021, seven months after its launch. 8 “FPO reveals the money we travel together, 20,000 million,” Bangkok Business News , January 4, 2021, bangkokbiznews.com; “‘We travel together’ the parade has already reserved 6 million rights. But there are still 1.35 million rights left!” Bangkok Business News , February 8, 2021, bangkokbiznews.com. During that time, at least $1 billion had been added to the Thai economy. 9 “NESDB-TAT has not yet knocked on ‘we travel together, phase 3,’” Thai PBS News , March 16, 2021, news.thaipbs.or.th.

Many operators grasped this opportunity, shifted their focus to the domestic market, and attracted local travelers by promoting flights and hotels in collaboration with the We Travel Together campaign. Destinations that once served mainly international visitors welcomed more local travelers, which has helped their economies wade through this difficult period. Many luxury hotels offered deep discounts and attractive promotions to capture the medium- to high-spend domestic-tourist segment.

These efforts to stimulate domestic travel were temporarily paused as COVID-19 cases reached a new high in July 2021. Domestic air travel in and out of red zones, including Bangkok, was banned during July to September 2021 in response to the nation’s effort to control the spread of the Delta variant. 10 “Domestic flight bans in force,” Bangkok Post , July 21, 2021, bangkokpost.com. Phase three of the We Travel Together campaign was paused during the same period, but resumed in October 2021.

Bringing back international travelers with the ‘sandbox’ approach

Despite promotional efforts for domestic travel, Thailand’s total revenue from domestic travel still saw a significant dip. The country’s revenue from domestic travel dropped from $34.5 billion to $15.4 billion in 2020. An increase in domestic spending alone would not compensate for the impact of the pandemic on the Thai economy. The country has largely been dependent on international markets, which represented about $62 billion or 60 percent of total tourism spend in 2019. 11 “Tourism statistics 2019,” Ministry of Tourism & Sports, accessed October 2021, mots.go.th.

In response, Thailand launched the “Phuket Sandbox” in July 2021, an effort to recapture demand from international travelers. The initiative offered fully vaccinated travelers (between 14 days and one year before their travel date) exemption from quarantine, provided they remain in Phuket for at least 14 days before traveling to other parts of Thailand. 12 “General information—Phuket Sandbox,” Tourism Authority of Thailand Newsroom, October 1, 2021, tatnews.org. Additionally, travelers’ stay in Phuket was restricted to accommodation establishments that have been certified by the Safety & Health Administration of the Thai government. Visitors staying in Phuket for less than 14 days were permitted to leave Phuket only if their destination was outside of Thailand.

The model hoped to draw visitors during the year-end season in Asia, Europe, and America—all key origin markets for Thailand. Several other reopening plans followed, including the “Samui Plus” and “Andaman Sandbox” plans. 13 “Samui Plus plan to generate B180m,” Bangkok Post , July 18, 2021, bangkokpost.com; “‘Adaman Sandbox’ next on govt agenda,” Bangkok Post , July 21, 2021, bangkokpost.com. Together, the schemes created a network of reopened destinations, which hoped to position Thailand as an attractive destination for international and domestic travelers alike.

The economic uplift from the Phuket Sandbox were moderate. In the period from July 1 to August 31, Phuket welcomed about 26,400 visitors, who were estimated to have spent at least $48.8 million while staying on the resort island (Exhibit 4). 14 “Phuket Sandbox generates B1,634m in two months,” Bangkok Post , September 5, 2021, bangkokpost.com.

A nationwide rise in COVID-19 infection rates in the same period meant that the government had to reconsider social distancing and other measures to minimize risk to visitors.

In any case, Thailand has gathered its learnings from the “sandbox” approach and proceeded to reopen the country to receive international travelers. As of November 1, 2021, the Thai government commenced a phased reopening of the country, allowing fully vaccinated tourists from 63 low-risk countries to visit with one day of quarantine, provided they pass a COVID-19 test upon arrival. The government has also replaced the slow-paced Certificate of Entry (COE) system with the Thailand Pass System, in an effort to make the documentation process of travelers entering Thailand more efficient than the COE application. 15 “Thailand pass,” ThaiEmbassy.com, accessed on November 1, 2021, thaiembassy.com.

The program also expanded the number of provinces open to international visitors to 17, including major tourism destinations such as Bangkok and Chiang Mai. Subject to readiness, additional major provinces are expected to reopen from December 2021 onwards. To ensure visitor safety, some COVID-19 measures remain in place, although most businesses have been allowed to reopen and nighttime curfews have been lifted in almost every province. The reopening has welcomed tourists globally, with top visitors coming from Thailand’s key source markets—the United States, Germany, and the United Kingdom (Exhibit 5).

Attracting ‘quality’ travelers, with an eye on new markets

Pre-COVID-19, China was one of the main contributors to Thailand’s tourism income, accounting for more than 27 percent of 2019 tourism receipts. 16 “Tourism statistics 2019,” Ministry of Tourism & Sports, accessed October 2021, mots.go.th. Given the current prudent approach of the Chinese government toward international travel, the road of return for Chinese visitors to Thailand will be a long one. China’s international-flight seat capacity and passenger numbers remain down by 95 percent  compared to pre-COVID-19 levels, and stringent public-health measures for international travel remain in place. Thailand, therefore, needs to reimagine its strategy and try to capture new sources of international travelers in markets where there are more rapid recoveries of international travel demand.

The situation may change rapidly, particularly in these volatile times; closely monitoring the revival of these top source markets, particularly around the country’s stance towards viral control measures, will help industry players plan their recovery efforts and capture untapped value.

Recognizing these shifting traveler trends, and the resilient nature of premium traveler groups, the Thai government is striving to attract “quality” travelers from these source countries. Measures include revisiting and relaxing certain regulations—such as yachting regulations and taxes on personal belongings and luxury goods—to improve and stimulate the premium travel experience.

Taking this a step further, the Thai government is preparing to launch a long-term residence program to attract foreigners to the country through new Long-Term Resident (LTR) visas (up to ten years), tax and investment incentives, foreigners’ residential property ownership relaxations, and more. The program will target four key personas: the wealthy global citizen, the wealthy retiree, the work-from-Thailand professional, and the high-skilled professional. The country’s ambition is to welcome over one million of these target personas and generate over 1 trillion baht in domestic spending in the next five years, beginning in 2022.

Emerging from the storm: Actions for travel and tourism

Thailand has put innovative measures in place to help its vitally important travel and tourism sector wade through the COVID-19 crisis. As new variants of the coronavirus emerge, health and safety should remain the foremost priority as countries contemplate their travel programs. Once it is safe to do so, there are actions that stakeholders can take to steer into and thrive within the next normal.

Adjust offerings and pricing strategy to meet market needs. Hotels, tour operators, restaurants, and transport providers could look to explore opportunities to offer services and products that meet new travel demands.

Bundle products, such as hotel and flights, offer upselling and cross-selling opportunities as well as a diversified revenue stream.

Travel companies could also devise and deploy targeted pricing strategies to drive long-term loyalty and stickiness for when international travel fully returns. Given the phased reopening of popular provinces in Thailand, and the inclusion of more visitors from select countries on a quarantine-exemption list, travel companies can leverage data on traveler behaviors to set the right prices and conduct targeted campaigns by country of origin and destination.

Explore opportunities within the mass-affluent traveler segment. Focusing on premium travel experiences may be a viable strategy in some markets, but it may have limited impact in Thailand. Given that the top three inbound visitor-spending categories in 2019 were shopping, accommodations, and food, targeting the high-end market would only benefit a small segment of travel companies and would not contribute to the country’s economic recovery across all relevant sectors.

By promoting more differentiated travel experiences and attractions such as ecotourism and cultural tourism, which are naturally location based and sought after by younger mass-affluent travelers, operators could contribute to greater aviation and transportation use in Thailand.

Form partnerships across the travel ecosystem. As a result of the government’s We Travel Together program, which subsidizes travel through a digital redemption mechanism (the Pao Tang app), the country has seen an estimated 30 to 40 million users join and use the platform. 17 Krung Thai Bank equity research, April 2021. This has created an opportunity for domestic consumer data to be collected and analyzed to provide more personalized tourism offerings that consumers are more likely to consider spending on.

Taking this a step further, tour operators, restaurants, and shopping malls might link up, creating a connected ecosystem where a traveler could be strategically engaged through multiple personalized services, products, and loyalty programs along their journeys.

Expand the network of destinations. There is an opportunity to offer travelers a wider variety of destinations in first- and second-tier cities, such as Nakhon Si Thammarat, Chiang Rai, Nakhon Nayok, Ratchaburi, and Loei. These locations have been able to sustain visitor numbers at a relatively low rate of decline, largely due to domestic travelers looking for new places to visit during international travel restrictions.

With a boost in promotion and appropriate infrastructure investment, tourism will not only contribute to the survival of the industry in these cities, but it could also lead to enduring tourist appeal that extends beyond domestic traveler groups, especially with the gradual return of international visitors. For example, the Tourism Authority of Thailand is collaborating with airlines to offer direct flights to alternative second-tier tourism destinations.

Leverage digital to connect, attract, and retain travelers. Travel companies can digitalize the customer journey from check-in through payment, including the provision of maps and information. Traveler preferences can be tracked in real time to design better and more relevant offerings, while digital booking channels can target different customer segments. Digital marketing can also entice visitors to return and to share their experiences on social media.

For instance, the Tourism Council of Thailand is working with Singapore-based IsWhere to deploy a digital-marketing platform for tourism business operators to better connect and engage with a potentially sizeable number of domestic and international travelers; the platform’s prior partnership with a major tech company has enabled it to reach 600 million digital customers worldwide.

Reimagine support needed by industry players. In the short term, industry players would need stimulus, support, and guidance on health and safety policies from the government. In the medium term, small and medium-size players would benefit from the government’s support in adjusting to online travel services and digital marketing, such as a one-stop digital platform to connect industry players with international travelers.

As such, the Tourism Authority of Thailand announced its plan to establish a private digital firm to work on creating a digital infrastructure for tourism, utilize big data in the industry, and potentially introduce blockchain-based e-vouchers and nonfungible tokens to provide tourism operators with more options for reaching travelers online and offline.

In the wake of the COVID-19 pandemic, tourism recovery in Thailand will be gradual and complex and requires varied strategies from both industry and government. As the world eagerly prepares for the eventual revival of international travel, Thailand and other countries can draw important lessons from its experience during this difficult interim period.

Steve Saxon is a partner in McKinsey’s Shenzhen office; Jan Sodprasert is a partner in the Bangkok office, where Voramon Sucharitakul is an associate partner.

The authors wish to thank Margaux Constantin , Kamila Dolinska, Steffen Köpke, Alan Laichareonsup, Jason Li, Georgie Songsantiphap, and Jackey Yu for their contributions to this article.

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Thailand GDP expands 4.5% in Q3, buoyed by tourism

Private spending also helps economy mimic pre-COVID era but inflation weighs

BANGKOK -- A reinvigorated tourism sector not only helped Thailand's gross domestic product to a year-on-year 4.5% expansion for the third quarter but also gave a big boost to personal consumption, the National Economic and Social Development Council (NESDC) announced on Monday.

The economic lift came despite inflation taking a toll.

Thailand shifts to European, U.S. tourists to rely less on Chinese

Thailand, singapore tourists jump in line as japan opens borders, thailand asks business to power down as leaders arrive for apec, malaysia's q3 gdp grew 14.2%, highest in over a year, thai banks' interest rate hikes spark economic concerns, japan gdp shrank annualized 1.2% in q3 amid weak yen, inflation, thai shrimp output plunges by half from peak as disease spreads, indonesia bags pledges for $71bn from g-20 presidency: jokowi, indonesia, philippines hike key rates in bid to tame inflation, latest on economy, pakistan floats international travel ban for tax dodgers, australian senate urges stricter rules for 'big 4' consultancies, fed eyes just 1 rate cut in 2024 despite inflation news, sponsored content, about sponsored content this content was commissioned by nikkei's global business bureau..

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Thailand Factsheet

Discover the total economic contribution that the Travel & Tourism sector brings to Thailand and the world in this data-rich, two-page factsheet.

Discover the total economic contribution that the Travel & Tourism sector brings to the Thailand’s economies and to the world in this data-rich, two-page factsheet.

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Factsheet details

This factsheet highlights the importance of Travel & Tourism to Thailand across many metrics, and features details such as:

• Contribution of the sector to overall GDP and employment
• Comparisons between 2019 and 2023
• Forecasts for 2024 and 2034
• International and domestic visitor spending
• Proportion of leisure vs business spending
• Top 5 inbound and outbound markets

This factsheet highlights the importance of Travel & Tourism to the Thailand across many metrics, and features details such as:

• Contribution of the sector to overall GDP and employment in the group and globally
• Contribution of the sector to overall GDP and employment in the region and globally

This factsheet highlights the importance of T&T to this city across many metrics, and features details such as:

• Contribution of the sector to overall GDP and employment in the city
• Comparisons between 2019, 2020 and 2021, plus 2022 forecast
• Proportion of the T&T at city level towards overall T&T contribution at a country level
• Top 5 inbound source markets

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Asia Travel Re:Set

Issue #70 - Thailand, Tourism & "Contribution to GDP"

How dependent is thailand's struggling economy on tourism.

Welcome to issue 70 of Asia Travel Re:Set…

Thailand is South East Asia’s most-visited country.

It counts the region’s 2nd-largest economy (after Indonesia), and its 4th-largest population (after Indonesia, the Philippines and Vietnam) of approx 74 million.

Thailand, largely due to its own particular brand of political drama, is also the most consistent travel headline maker.

This week, the Land of Smiles announced v.04 of its pandemic-era tourism reboot.

So, today, it’s time to talk about Thailand.

Thanks for being on board,

The Sunday Itinerary

- this week’s top 5.

Updates from South East Asia, Malaysia, Australia, Thailand, Vietnam

- Thailand, Tourism & “Contribution to GDP”

How dependent is Thailand’s struggling economy on tourism?

This week’s The South East Asia Travel Show generated the most single-day downloads since Hannah Pearson and I began the show 2 years ago. Especially strong listener interest came from the UK, US, Australia and Brazil. Part II of our 2022 travel wish list countdown includes governments start communicating with common sense, not in proxy terms; domestic tourism stimulus packages assist players across the value chain; and the tourism industry is attractive again for fresh grads. Plus, should tourism firms publish zero emissions targets? And when will travel be fun again?

Listen here: 🎧  Website 🎧  Spotify 🎧  Apple

Or wherever you grab your pods!

This Week’s Top 5

We’ve heard this several times before, but South East Asian Tourism Ministers reconfirm a commitment to open an ASEAN Travel Corridor . Hmmm.

Malaysia introduces a 3-tier isolation period for returning nationals and inbound arrivals. Vaccine boosted visitors now need to home-isolate for 5 days .

Backpackers are welcome again in Australia , as the government waives the visa fee for Working Holiday visitors . Arrival testing requirements are also eased .

Thailand will restore its currently suspended Test & Go quarantine-free visitor scheme , with amended rules. Applications will begin on 1 February.

Is Vietnam edging closer to reviving travel? The government is considering removing inbound restrictions from 1 May .

Thank you for reading Asia Travel Re:Set. This post is public so feel free to share it.

Thailand, Tourism & “Contribution to GDP”

Image from Tourism Authority of Thailand

“Thailand’s economic recovery in the period ahead remains highly uncertain and would depend largely on the recovery in foreign tourist arrivals. This is because income from spending by foreign tourists accounts for 11% of GDP and tourism-related businesses account for 20% of total employment in Thailand.”

That paragraph was written by the Bank of Thailand in a March 2021 report.

The statistics can be interpreted in two ways, depending on your standpoint.

Some might argue that 11% does not necessarily correlate with the oft-quoted statement that Thailand is “heavily dependent on tourism.”

Alternatively, 11% is a high figure for one of the the 30 largest economies in the world.

Equally important is that tourism, including a robust domestic travel sector, accounts for one-fifth of employment. The pandemic shutdown of inbound tourism saw many people lose their jobs. They likely drifted into other sectors, perhaps permanently.

Quantifying Thai Tourism & GDP

The Bank of Thailand and the Thailand Development Research Institute (TDRI - which advises the Thai government) now place the economic value (or direct contribution to GDP) of tourism at 11-12%.

That figure, though, is fairly meaningless without quantifying the size of the Thai economy.

According to the World Bank, Thailand’s Gross Domestic Product (GDP) in 2020 totalled USD501.64 billion . That places it among the world’s 30 biggest economies.

GDP in 2020 was significantly down from USD544.26 billion in 2019 - but a huge jump from USD281.7 billion in 2010.

Economic growth in 2021 is estimated to have been around 1% - perhaps less.

Will Tourism Reduce in Value?

In 2022, the Thai economy is “expected to grow 3.5%-4.5% ,” The Bangkok Post reports this week citing Finance Minister, Arkhom Termpittayapaisith.

Hitting that ambitious target without a solid contribution from tourism previously would have been unthinkable.

It might still be.

Thailand is losing a sizeable chunk of economic value without a functioning tourism sector. Hence, from 1 February, it will try for a 4th* time during COVID-19 to resuscitate inbound arrivals.

However, an ongoing travel stasis in Asia Pacific and structural change in Thailand’s economy - mostly caused by a coming together of various pandemic impacts - could see tourism ultimately become less valuable to Thailand.

Key Growth Drivers

Thailand’s target range of 3.5%-4.5% GDP growth in 2022 will rely on exports, a recovery of domestic demand and investment, particularly in infrastructure and manufacturing, which would combine to generate much-needed jobs.

Job creation is vital.

Thailand’s unemployment rate doubled from 2020 to 2021. An especially large number of jobs were lost in the travel sector. Some might never return.

A Spotlight on Exports

Manufactured exports account for over 50% of Thailand’s GDP, and grew fast in 2021. Economic rebalancing in major purchasing markets, such as the US, EU, Japan and China, is driving export demand.

Consequently, Thai exports recorded a 15% year-on-year upswing in 2021, says the TDRI - representing a near 10-year high. This might moderate, however, in 2022.

Even so, Thailand lags its competitors - being the 10th largest exporter in East Asia.

Interviewed this week by Channel News Asia , Dr Kirida Bhaopichitr, Economics Research Director at the TDRI, says export growth is being bolstered by Thailand being one of the world’s largest automobile accessories and parts producers.

In addition, hard disk drive sales are thriving as more people work from home. Food products are in high demand, as are pet foods. Thailand is one of the world’s top 3 pet food producers.

A weakened Thai Baht and the US-China trade war (forcing US importers to diversify their source markets) are supporting the export renaissance.

Digital Diversification

And then there is the internet economy, which is enjoying era-defining growth across South East Asia.

The value of Thailand’s internet sector is projected to increase from USD30 billion in 2021 to USD57 billion in 2025 , according to the e-Conomy SEA 2021 report by Google, Temasek and Bain & Co.

In 2019, it was valued at just USD19 billion.

New Taxes - Including Tourism

Another 2022 driver could be fiscal policy - and Thailand is moving into tax-revenue raising mode.

The government announced plans to collect a new THB300 Tourism Tax from April.

The Financial Times reports this week that it is “considering imposing a a flat 15% withholding tax on all cryptocurrency trades,” plus a tax on stock trades.

Turning to taxation is being considered by cash-strapped governments across South East Asia, and further new tax tweaks in Thailand are possible this year.

Thailand: International tourism revenue, percent of GDP

Thailand: international tourism revenue, percent of gdp, 1995 - 2020:.

International tourism, receipts (current US$) - Thailand

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Tourism revival likely boosted Thailand's GDP growth in Q3: Reuters poll

• Medium Text
• Thailand's GDP seen expanding +4.5% y/y in Q3 vs +2.5% in Q2
• Q3 GDP seen at +0.9% q/q sa vs +0.7% in Q2
• Q3 GDP data due on Monday, Nov. 21

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Reporting by Devayani Sathyan; polling by Maneesh Kumar; Editing by Ross Finley and Ana Nicolaci da Costa

Our Standards: The Thomson Reuters Trust Principles. New Tab , opens new tab

Markets Chevron

Gulf bourses dip in early trade on Fed's hawkish tone

Most stock markets in the Gulf were subdued in early trading on Thursday, as investors weighed cooling U.S. inflation against a more hawkish posture by the Federal Reserve.

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GDP value contribution Thailand 2021, by sector

Gross domestic product (gdp) contribution in thailand in 2021, by sector (in billion thai baht).

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figures at current market prices

One Thai baht equals 0.029 U.S dollars and 0.028 euros as of May 2022. Figures have been rounded. The source does not provide a date of publication. The date used here is the access date.

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Statistics on " Tropical fruit industry in Thailand "

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