THAILAND and China have agreed on a bilateral deal to waive visa requirements for travellers, according to Prime Minister Srettha Thavisin, a move likely to accelerate the pace of the post-pandemic recovery in the South-east Asian nation’s key tourism industry.

Chinese visitors to Thailand will be exempted from visa needs beyond the current temporary scheme ending Feb 29, Srettha told reporters on Tuesday (Jan 2). China will also grant Thai tourists the same permanent privilege following several rounds of talks, he said.

Chinese were Thailand’s largest group of tourists before the pandemic. They accounted for more than a quarter of the 40 million visitors in 2019 but tallied only about 3.5 million out of the 28 million tourists last year.

Since taking office in September, Srettha’s government has rolled out several measures to boost tourism – what he calls a “quick win” – to stimulate growth in South-east Asia’s second-biggest economy. The sector accounts for about 12 per cent of gross domestic product and nearly a fifth of jobs.

Thailand has also temporarily waived visa requirements for travellers from Russia, Kazakhstan, India and Taiwan and it has also been planning to allow longer stay for tourists from specific countries to induce more spending.

The visa waiver for Thais travelling to China will help “elevate pride in Thai passports,” Srettha said. “The good news is, from Mar 1, no visas are required for travel between Thailand and China.”

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Thailand is currently ranked 64th on the Henley Passport Index, with its citizens having visa-free access to 80 destinations, below top-ranked Singapore’s 193.

The bilateral agreement will be officially signed by the two countries by the end of February, according to Thai government spokesman Chai Wacharonke. Chinese tourists will be allowed to stay a maximum of 30 days per entry in Thailand and vice versa, Chai told reporters after a weekly Cabinet meeting. A total of 90 days stay is allowed in case of multiple entries within 180 days.

The visa exemption will help “further enhance people-to-people exchanges,” Wang Wenbin, China’s foreign ministry spokesman, said at a briefing, adding that the two countries are “communicating closely on the matter.”

Earnings boost

The new visa deal and prospects for a jump in tourist arrivals lifted shares of some Thai airlines, hotel operators and state-controlled Airports of Thailand, which operates six airports. While AOT gained as much as 4.2 per cent, the most since Nov 24, Asia Aviation, which controls the country’s largest budget carrier, jumped as much as 7.5 per cent to the highest level since Nov 9. Central Plaza Hotel shares rose as much as 3.4 per cent.

The visa measures will further bolster the outlook for international arrivals, Koraphat Vorachet, an analyst at Krungsri Securities, wrote in a note on Tuesday. This will help support earnings of operators of airports, airlines and hotels, he said.

To entice more foreign tourist spending, Thailand’s Cabinet also approved cuts in excise tax on fermented alcoholic beverages, Chai said. Wine and sparkling wine varieties will be subject to a unitary tax rate of 5 per cent regardless of price tiers, and a rate of 1,000 baht (S$38.7) per litre of pure alcohol by volume, from a maximum rate of 10 per cent and 1,500 baht respectively. A 10 per cent ad valorem tax for local rice wine varieties will be scrapped, he said.

Thailand earned 1.2 trillion baht from 28 million foreign tourists last year, Tourism Minister Sudawan Wangsuphakijkosol said in a statement on Tuesday. Malaysian tourists topped the list of visitors at 4.56 million, with Chinese, South Korean, Indian, and Russian tourists making up the rest of the top five.

The Tourism Authority of Thailand expects tourist arrivals to jump to 35 million this year, including 8.2 million from China. BLOOMBERG