The combination of the easing of coronavirus restrictions and a weaker baht has Pattaya tourism businesses excited for this year’s high season.
Phisut Sae-khu, president of the Eastern Chapter of the Thai Hotels Association, said that since May 1, when the government dropped the “test and go” program for tourist entry, inquiries from Indian, Vietnamese, South Korean and Japanese tourists were received.
He called that a good sign as it’s the off-season now.
Now, Phisut said, hotels and travel planners are studying how the market has changed during the coronavirus pandemic and preparing for the next peak season. It will take a few months to prepare new tariffs and offers, he said.
Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, said earlier that the economy is closely monitoring the international exchange rate of the baht.
The baht is down 3.4% in 2022 and has fallen rapidly since the start of the war between Russia and Ukraine. The baht hits a five-year low of 34.62 against the dollar on May 9, down 2.3% over the past month.
While a weaker baht is good for tourism and exports, it could lead to higher inflation as Thailand buys oil and most consumer goods abroad, Kriengkrai said.
In addition to the war in Ukraine, rising interest rates in the US are luring investors to sell baht for dollars.
If the US raises interest rates to 3.25-3.5% while Thailand maintains its historically low 0.5% interest rate, the baht could depreciate to 36 per dollar, Kriengkrai said.
However, it is unlikely that the Bank of Thailand would allow this level of weakening to intervene in the market, which could lead to US reprisals for currency manipulation.
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