This report profiles Thailand’s tourism industry, discussing market trends and outlook through 2013 and into 2014 and beyond. The report also highlights key leading players in the sector including Mint International Pcl (MINT), Central Plaza Hotel Pcl (CENTEL), The Erawan Group Pcl (ERW), and Dusit Thani Pcl (DTC).

The Thai tourism industry has been in a state of flux since November 2013 amid the national politics and this can seen in the number of arrivals decreasing in the first seven months of 2014. The Tourism Authority of Thailand (TAT) reported a 10.5% y/y decline in international tourist arrivals to 13.63mn in January-July 2014. East Asian and European tourists represented the largest share of arrivals to Thailand during this period, accounting for 56% and 27.5% of the total arrivals, respectively. The key tourist generating markets were China, Malaysia, Russia, Japan, and Korea.

TAT estimates that international tourist arrivals will fall short of its initial target and reach 25.5mn in 2014, about one million less than a year ago. In order to boost tourism growth in the third and fourth quarters of 2014, Thai tourism agencies have engaged in aggressive tourism recovery marketing campaigns as well as capitalized on niche markets to attract more quality tourists to visit Thailand. Meanwhile, tourist expenditure was estimated at THB 1,395bn in 2013, contributing about 9% to GDP. It is expected to remain steady in 2014 and grow over the next ten years.

Majority of the leading tourism and leisure companies in Thailand reported lower growth in total revenues in 1H2014 due to the adverse impacts from the political unrest. However, their diversified business portfolio and strong international presence mitigated the impact of slowdown in tourist arrivals. The outlook for Thai tourism industry still looks bright with increasing tourist numbers for 2015 and beyond. However, the country’s prolonged political instability and the prospects of further unrest remain as downside risks though they are unlikely to spread to the coastal tourist areas.

Key Points:

• Following the end of political unrest in June 2014, the Thai tourism industry is expected to recover in 3Q and 4Q of this year, driven by resumed growth of East Asian and European tourists.

• China, Malaysia, Japan, and Korea are the important destinations from where the large amounts of visitors come to Thailand from East Asia.

• Growing medical tourism in Thailand due to comparatively lower medical treatment costs and state-of-the-art private healthcare facilities, as well as lower hotel room rates.

• Golf tourists to Thailand are on the rise, thanks to the high-standard golf courses, good weather, tourism infrastructure, friendliness of the people, and affordable cost. Industry experts expect the number of golf tourists to touch the one million mark in 2015.