Tourism, the worn-out treasure of the Thai economy

IN BRIEF

• Tourism represents approximately 15% of Thailand’s GDP. Economic recovery supported by tourism and domestic consumption. Historically, tourism has generated billions of baht and supported over 10 million jobs.
• Growth forecasts for 2025, despite signs of fatigue in the sector. Challenges to maintain the attractiveness of Thai tourism in the face of external factors. Importance of a strategic approach to revitalize this economic gem.
• The tourism industry in Thailand, often described as an economic treasure, is currently experiencing a period of vulnerability. Despite its significant contribution of approximately 12% of GDP and supporting over 10 million jobs, signs of fatigue are increasing. Between the COVID-19 pandemic and growing competition from other destinations, Thailand now faces considerable challenges in revitalizing its tourism sector. This precious heritage, which has long been the pillar of the Thai economy, is at a critical juncture, and the strategies implemented to reinvent it will be crucial to the country’s economic future. Thailand, often called the “Land of Smiles,” is an iconic destination for tourists from around the world. However, its tourism industry, which constitutes a central component of the national economy, faces numerous challenges. Despite its resilience, the sector appears to be showing signs of fatigue, revealing an overreliance on a source of income that, while valuable, urgently requires renewal to maintain its vitality. A pillar of the national economy
• The tourism sector accounts for approximately 15 to 20% of gross domestic product (GDP). Thailand. In 2019, the country recorded a record number of visitors, with nearly 38.7 million. These figures illustrate how tourism has become a vital pillar of the Thai economy. Not only does it generate billions of baht each year, but it also supports more than 10 million people, connecting millions of lives to the sector. A Difficult Post-COVID Recovery
• The COVID-19 pandemic has severely tested the tourism industry, resulting in a 6.1% contraction in GDP in 2020, the sharpest since the 1997 Asian Financial Crisis. This has led to a massive slowdown in visitor flows, impacting not only tourism revenues but also the entire economy. Despite some rebound observed in recent months, the slow pace of the sector’s recovery remains worrying. Signs of Fatigue Recent analyses have highlighted signs of fatigue in the tourism industry, once considered the “jewel in the economic crown.” Concerns about declining service quality, rising living costs, and the continued appreciation of the Thai baht are making it difficult to access this once highly competitive destination. These factors must be addressed to restore Thailand’s global appeal. The Ecological Challenge
• With the rise of mass tourism, ecological preservation has become a pressing priority. Thailand’s natural resources are threatened by overcrowding at iconic locations, such as the beaches of Phuket or the islands of Koh Phi Phi. The country must therefore balance economic development with environmental conservation to avoid alienating its main attraction for tourists. Initiatives to Revitalize the SectorTo revitalize this industry, Thailand is considering various projects, including policy initiatives to boost tourism through decentralization. This includes the opening of new tourism gateways, such as Cambodia’s Techo International Airport, aimed at generating renewed regional interest. New tourism taxes could also provide the necessary funding to improve infrastructure and services.