THAILAND has laid out the welcome mat for tourists, but visitors aren't exactly making a beeline for the country. The pickup is likely to remain disappointing for the rest of the year, not unlike the situation among its Asean neighbours, a Nomura report has said.

The weak outlook is based on projections by Nomura's research tool known as the Tourism Recovery from Inbound International Passengers Tracker (TRIPTracker), which can gauge the recovery prospects of international arrivals while taking into account the rate of full vaccination, degree of openness and travel restrictions in both the source and destination countries of inbound passengers.

Nomura analysts applied the TRIPTracker formula to Thailand, Singapore and Malaysia following the recent announcements of border reopenings in these three countries.

Thailand's TRIPTracker score is set to reach 4.9 per cent by year-end, from 4 per cent on Nov 1. (A score of 100 per cent indicates full recovery to pre-pandemic levels.)

Thailand's score at the end of October, before it allowed vaccinated travellers from 60 countries to enter without quarantine, was 0.7 per cent.

The analysts said that Thailand's reopening could backfire if it leads to a resurgence of Covid-19 cases, accompanied by a rise in number of severe cases, given the relatively low full-vaccination rate; just under half its people have been fully vaccinated.

"This suggests the re-opening plan is still subject to considerable uncertainty," said the Nomura team.

"Although we do not think the government will back-pedal on the re-opening of borders - as had happened with Phuket's re-opening - the resurgence in cases could still dampen tourism sentiment and weigh on the recovery further out."

The team added that Thailand's still-low TRIPTracker score was due to the stringent quarantine requirements imposed on visitors from China, Japan, Hong Kong and most South-east Asian countries who are returning home after having visited Thailand.

"We do not expect any major changes in the quarantine requirement of the source countries towards Thailand by the end of the year, especially its top market, China," said the analysts.

"Our China economics teams does not expect China's zero-tolerance policy to be eased soon, so the quarantine requirement for returning passengers is also unlikely to be relaxed anytime before Q2 2022," they added.

Malaysia, Thailand's second largest source of visitors, is also unlikely to ease quarantine requirements for Thailand any time soon, since its full-vaccination rate is still well below 70 per cent.

Comparing Thailand with Singapore, Nomura analysts said: "Singapore's strategy is better recalibrated in that it is expanding the VTL list such that the share of source countries with no quarantine requirements for returning passengers is still higher than that of Thailand's, likely helped in part by Singapore's much higher vaccination rates."

Singapore's score by end-2021 is expected to be 6.3 per cent, which Nomura analysts said reflect "a better calibrated strategy to reopening".

The Republic, which has a full-vaccination rate of 85 per cent, had a score of 3 per cent on Oct 19. The bilateral vaccinated travel lane (VTL) with Malaysia is expected to lift the score to 5.8 per cent by Nov 29.

Malaysia's resumption of air travel with Singapore brings its score to 1.9 per cent, said the analysts, who warned of upside risks ahead.

Since the VTL is only for air travel and accounts for only 20 per cent of arrivals from Singapore, going by Nomura's estimates, a possible expansion to land travel on the Causeway could lead to a jump in reading to 8.1 per cent, the analysts added.

"All this suggests a still-slow tourism recovery in the region, particularly in Thailand, which is seeing disappointing arrival numbers so far," they said.

Nomura is keeping its 2021 gross domestic product (GDP) forecast at 7.1 per cent for Singapore, 4.4 per cent for Malaysia and 0.6 per cent and Thailand.

Likewise, it is maintaining its 2022 growth outlook at 4.6 per cent for Singapore, 7.7 per cent for Malaysia and 4.1 per cent for Thailand.

ASEAN Business