in the government is considering the message this sends to the public about Thailand,” Michael Baker, former head of research at the International Council of Shopping Centers, told Inside Retail.The Thailand-based retail consultant said the move could potentially inconvenience travellers and may not necessarily lead to the desired increase in spending within the country.  “Similar practices can be seen in Thailand, such as discriminatory pricing where tourists pay one price at tourism venues while Thais pay another or sometimes not at all. Repeated actions like this can erode goodwill and drive people away. Additionally, this change also inconveniences returning Thais,” Baker said.  The Moodie Davitt Report said the move will result in an approximate 20 per cent drop in airport duty-free sales for larger spirits houses. The government estimates that the inbound travellers losing access to arrival duty-free shops will be likely to spend an average of 570 baht (US$15.76) more elsewhere in the country.  The Finance Ministry made the proposal of abolishing duty-free shops to encourage foreign tourists and returning Thai travellers to spend within the country last year. Solution in search of a problem “There will be some benefits to local spending, but a significant portion of the sales will likely transfer to the duty-free shops at the port of origin,” Baker said.  The government projected adding the 570 baht amount would translate to approximately 3.5 billion baht in additional domestic spending per year.  While the intention is clear, the actual outcomes seem uncertain. “It is unclear how this model was developed. Many such models do not account for incentives, possibly assuming that the current revenue from duty-free shops will simply shift to local retailers. If this is their assumption, it may be overly optimistic.” Three duty-free operators, which logged about 3 billion baht in combined sales last year, have agreed to suspend operations, deputy government spokesperson Rudklao Intawong Suwankiri told Bangkok Post. Affected airports include Suvarnabhumi Airport, Don Mueang, Chiangmai, Krabi and Phuket International.  Baker said the move is more about what that means for the longer-term reputation of the country.  “There is a degree of rapacity about Thailand’s tourism policies. They are trying to extract too much from it at a time when the tourism infrastructure and physical environment are already under stress,” Baker said.  “This is not the Maldives. Thailand has a strong manufacturing base, abundant natural resources, cheap labour and a strong entrepreneurial culture. It already derives 15-20 per cent of its GDP from tourism. They want to push that even higher but at the same time they pull stunts like closing the duty-free stores.” The consultant said the government has a plan in place for a digital cash handout to the entire adult population, scheduled for later this year. While the initiative was part of the government’s 2023 election promise, it has faced delays for various reasons. Additionally, the government has been urging the central bank (the Bank of Thailand) to lower interest rates, though these efforts have not yet been successful.  He added that for retailers, improving customer service, particularly outside the food and beverage sector, would boost local spending. According to statistics from the tourism and sport ministry, as of April 14, the country welcomed 10.72 million foreign tourist arrivals, more than two million of which were from China, followed by Malaysia, Russia, South Korea and India. The number of countries and regions qualifying for visa-free stays increased from 57 to 93 in June.