Last month’s Phoenix boat accident off the coast of Phuket that left 47 Chinese tourists dead, is going to take a heavy toll on Thailand’s tourism industry. Thailand’s Ministry of Tourism and Sports has revised their tourism figures for the rest of the year down to 5.1 million Chinese tourists, a drop of 670,000. The financial cost of this precipitous drop is hard to pin down precisely. According to the ministry, each Chinese arrival to Thailand during the first of half of 2017 spent an average of $1,553. This puts the estimated total lost revenue at around $1.04 billion.

The Phoenix boat accident will cost Thailand’s tourism industry over $1 billion in revenue

Overall, Thailand garnered $56 billion in tourism revenue and authorities were expecting to rake in around $62.95 billion in total tourism revenue for 2018.

Fortunately, tourism officials are still expecting arrivals growth for 2018 to surpass those for 2017, regardless of the drop. In total, Thailand attracted 9,805,753 Chinese tourists in 2017. With the newly revised figures, the ministry is now expecting somewhere around 11 million Chinese tourists, with the country attracting 5,931153 tourists between January and June of this year.

Chinese arrivals are expected to still grow in 2018 over 2017, but Phuket will continue to be hit particularly hard by flagging numbers

In the long-term, it’s unlikely that the boat accident will harm the Thai tourism industry. However, that’s likely little comfort for Thai business owners that depend on Chinese tourists. This holds especially true for businesses in Phuket, which will be hit the hardest.

We don’t have full numbers for the total cancellations of planned trips by Chinese tourists. However, there have been at least 7,300 canceled bookings by Chinese tourists for trips to Phuket for July and August alone. By one estimate, that accounts for 10 to 15 percent of Phuket’s tourist business.

While Thailand’s industry is will undoubtedly recover in the months ahead, Phuket’s road to recovery will be much more challenging.