Fluctuation in tourism may be a useful indicator of changes in national GDP. Thailand’s tourist industry is down. In the decade since the tsunami hit, the country has expanded the infrastructure for tourism. Today the problem is that fewer tourists are arriving. The reason is both demand and supply related. Admittedly the Thai tourism sector is less than 10 percent of Thai GDP, nevertheless it may be a more accurate reflection of economic activity than what is covered in the wider measure of GDP.
Tourists from Northern Europe and Russia are attracted to south-east Asia during the winter months. Reasonable air fares, accommodation and other attractions make Thailand a favored destination until recently. On the demand side, economic slowdown in Europe has reduced spending on vacations. In the case of Russia, the declining rouble makes any type of import, which includes spending on foreign travel, prohibitively expensive. You see it on the streets and in the restaurants in Cha Am and Hua Hin, two east coast resorts which usually bustle with European tourists.
On the supply side, Thailand’s move to a military dictatorship almost a year ago means that travel insurance is impossible or very expensive for tourists to buy. Neighboring countries offer similar tourism opportunities and the sun-seekers move there, perhaps to remain. Why or whether the political systems in Cambodia, Myanmar, Indonesia, Sri Lanka and Vietnam are seen more attractive to travel insurers is unclear to me, but Thai tourism seems to be suffering from living under the present regime of military rule.
A focus on sectoral statistics as an indicator of overall economic activity may appear myopic. However my view is that the known shortcomings of GDP well documented by Diane Coyle and others means that alternative measures need to be sought.