The move to halt new registrations for the Test and Go programme could jeopardize Thailand's prime tourism season in the first quarter next year, analysts warned on Wednesday.
After nearly two months of reopening, the Centre for Covid-19 Situation Administration (CCSA) has decided to suspend all new Test and Go and Sandbox applications, except Phuket Sandbox, until further notice.
While visitors whose applications have already been approved can still enter the country, the suspension of Test and Go registrations will require new visitors to go through a 7-day Phuket Sandbox program or alternative state quarantine.
"The latest decision could lead to a sharp drop in tourist arrivals in January and possibly in the first quarter," Ekasit Kunadirekwong of Krungsri Securities said in a note.
There is a chance that the government may resume the Test and Go programme in the late first quarter or even in the second quarter, he said.
The key risk in the near-term is low booster rate of mRNA vaccine to withstand the spread of the Omicron variant. Recent data shows that only 6.6 per cent of Thais have received a booster shot.
Ekasit suggested that 120 million doses of booster shot would be sufficient to ramp up Thailand's booster vaccination rate to more than 70 per cent.
KTB Securities analysts said the halt in the Test and Go entry will put a strain on the recovery of the struggling tourism industry even though the number of arrivals are nowhere near the pre-covid levels.
Thailand once recorded around 40 million visitors before waves of the Covid-19 struck the vital tourism industry. This year, officials expect at least 300,000 arrivals.
"The contagious Omicron variant and its prolonged impact will likely continue to endanger the tourism sector," KTB warned.