Skift Take
Thailand may have gone from being picky to rolling out the red carpet for everyone, realizing that hitting a 40-million tourist target can’t be done by courting the big spenders alone.
After years of will they, won’t they, Thailand has finally decided to scrap the contentious proposal to impose a THB 300 ($8.20) tourism fee on international tourists arriving by air.
Prime Minister Srettha Thavisin said this week that his administration would abandon the previous government’s plan.
In 2021, to revive the tourism industry, the tourism ministry proposed a THB 500 tourism fee. The head of the Tourism Authority of Thailand at that time said, “The additional cost won’t have an impact on tourists as we want to focus on the quality market.”
Then, in February of last year, the Thai cabinet approved that international tourists arriving by air would pay THB 300 from June 1, and those entering by land or sea would pay a fee of THB 150 ($4).
What Was the Tourism Fee For?
The government intended to use the revenue from the tourism fee to fund tourism management and insurance for international visitors. This aimed to address the financial strain on the Thai government, which then stated it spends approximately THB 300 million-400 million annually on healthcare for tourists. That’s the cost of paying for healthcare to treat tourists injured while vacationing in Thailand.
However, the tourism fee faced significant opposition from private stakeholders.
Thavisin, who took office in August, emphasized that eliminating this fee could potentially lead to greater economic benefits.
On June 10, the Thai government’s public relations department stated that they expect the removal of the fee to encourage higher spending by tourists in other sectors, thus providing a more substantial boost to the economy than the fee itself would have.
Prime Minister Thavisin suggested that the influx of tourists without the additional fee could increase spending on shopping, dining, and other activities, thereby generating more revenue. He also noted that if the government successfully garners additional revenue from other tax sources, it could adequately support the tourism sector as needed.
The Luxury Pivot and Visa Bonanza
In line with this strategic shift, Thailand has been focusing on attracting luxury tourists. The newly launched “Amazing Thailand: Your Stories Never End” campaign highlights luxury travel experiences, including stays in pool villas in Phuket and Phang Nga, treehouse villas on secluded islands, upscale tented camps, and gastronomic tours featuring both local and Michelin-starred cuisine.
Additionally, Thailand has introduced a series of visa promotions and extended stays to attract more tourists and remote workers.
From June 1, the number of countries eligible for visa-free entry increased from 57 to 93. Visitors are now allowed to stay for up to 60 days, compared to the previous 30-day limit. These changes aim to make Thailand a more attractive destination for international visitors, particularly students, digital nomads, and retirees.
Addressing concerns over Thailand’s recent decline in the World Economic Forum’s tourism and travel development index, which now ranks it 47th out of 119 countries (down from 41st in 2019), Prime Minister Thavisin stressed the importance of constructive action over assigning blame. He reaffirmed the central role of tourism in generating substantial revenue for the country.
Attracting More Global Visitors
In a move to enhance cultural tourism, the Thai government plans to promote the northern province of Nan and establish a twin-city relationship with Luang Prabang province in Laos. Rich in prehistoric archaeological sites, ethnic diversity, and local knowledge, Nan is set to be nominated as a UNESCO World Heritage Site.
The Thai cabinet approved a THB 7 million budget in March to increase public awareness and conduct academic assessments for this initiative.
Further bolstering tourism, the government announced plans to upgrade Nan airport to international status to attract more global visitors.
Tourism Numbers, So Far
The efforts appear to be paying off, with the tourism ministry reporting 12.1 million visitors in the first four months of 2024, marking a 39% increase compared to the same period in 2023. Revenue from these visits was estimated at THB 584 billion.
The top 5 source markets were China (2.35 million arrivals), followed by Malaysia (1.6 million arrivals), Russia (767,210 arrivals), South Korea (679,481 arrivals) and India (643,587 arrivals).
Thailand aims to welcome around 40 million foreign visitors this year.