Trade tension may be taking a toll on Chinese tourist arrivals in Thailand, hurting a key engine of growth for Southeast Asia’s second-largest economy.

Chinese arrivals slumped 11.8 percent in August from a year earlier, the most since February 2017, according to Bloomberg calculations using government data released Thursday. The Tourism Council of Thailand said concern about the economic fallout of the U.S.-China trade war, as well as the strength of the baht, may be putting some travelers off.

“The problem now is the impact of President Donald Trump’s policies in the trade war with China,” the council’s Secretary-General Wuthichai Luangamornlert said. “Chinese people are concerned about the economic situation stemming from the trade war. And the cost of travel is now higher.”

Tourism accounts for about a fifth of Thailand’s gross domestic product. Chinese travelers are expected to contribute close to a third of a forecast 2.09 trillion baht ($65 billion) in foreign tourism revenue this year, according to ministry figures.

Chinese arrivals had already slowed after a deadly tour boat accident off Phuket in July that killed dozens of people, one of the worst such incidents in Thailand in recent years.



The government expects the sector to recover from that tragedy as the year progresses.

But the fallout from the trade war could slow the pace of growth in Chinese holidaymakers, Wuthichai said.

–With assistance from Michael J. Munoz.

©2018 Bloomberg L.P.

This article was written by Natnicha Chuwiruch from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.