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24 Jan 2020

Tourism

Closely monitoring effects from an outbreak of 2019 Novel Coronavirus in China on 2020 Chinese tourism market in Thailand (Current Issue No.3077)

             The outbreak of the 2019 Novel Coronavirus (n-CoV) that originated in Wuhan, Hubei province, in late 2019  has caused more patients to sicken and the death toll has risen. Meanwhile, more confirmed cases have been found in other Asian countries, including Thailand, and the US. The Chinese authorities locked down transport activities in Wuhan and nearby cities on January 23, 2020 to prevent further spread of the virus.

KReserarch views that the shutdown of the airport in Wuhan one day before the Lunar New Year Holiday may lower the number of inbound Chinese tourists to Thailand during the Chinese New Year festival this year to 355,000-358,000 from the initial forecast of 366,000 people.

             Regarding the impact of the n-CoV outbreak in China on the Chinese tourist market in Thailand in 2020, KResearch assesses the situation based on two scenarios.

First scenario: If the n-CoV outbreak is contained within one month due to measures swiftly issued by the Chinese authorities and the virus does not spread to Thailand and other countries, KResearch views that although the Chinese tourism market, especially that of Wuhan, will be impacted, it should not affect the overall Chinese tourist market and travel activities of international tourists, who are a target market of Thailand. Based on this scenario, it is expected that the Chinese tourists in Thailand in 2020 may reach 11.1-11.3 million people, and the number of tourists should reach at least the lower end of the estimates.

             Second scenario: If the outbreak continues for 1-3 months, the Chinese authorities may have to spend more time to control the situation. Even in the case where the disease is not found in Thailand and other countries, it may adversely affect the Chinese economy and Chinese purchasing power, dampening the travel sentiment and Chinese tourists' desire to travel. Some Chinese tourists may reroute their destination to safer places. KResearch estimates that the number of Chinese tourists in Thailand in 2020 may drop to 10.94-10.77 million people or a contraction of 0.5 -2.0 percent.

              In summary, KResearch views that the impact of the n-CoV outbreak in China will have a limited impact on Thailand's tourism activities in 2020 because the Chinese authorities have implemented speedy and swift actions to deal with the mysterious disease. Moreover, an advancement of medical technology and effective communications warning tourists not to travel into the risky areas help in containing the virus from spreading further. As a result, the effects on tourism in the Chinese tourist market in Thailand may not be as severe as what was seen during the outbreak of Severe Acute Respiratory Syndrome (SARS) in 2003 that lasted approximately six months, causing the shrinkage of the inbound Chinese and foreign tourism market that year. Nonetheless, the situation warrants close monitoring and KResearch will evaluate the impact further.