BANGKOK Thailand's Cabinet on Tuesday agreed to extend a waiver on operating fees for hoteliers for two more years from July to support the recovery of the tourism sector, a government official said.

The exemption of the annual fee of 40 baht per room will cost the government 54 million baht (US$1.47 million) in lost revenue, deputy spokesperson Karom Phonphonklang told a news conference.

Waiving the fee will help reduce expenses for hotel operators who have been impacted by Covid-19 and may remain unable to recover, he said.

Tourism is a key driver of the Thai economy, which has lagged regional peers, as it faces high household debt and borrowing costs as well as weak exports.

The government, which is targeting 3% economic growth this year after last year's 1.9% expansion, has said tourism will continue to underpin economic growth.

Thailand received 16.84 million foreign tourist arrivals since the start of 2024 to June 23 this year, up 36% year on the year, with spending of 795 billion baht, tourism ministry data showed.

China was the biggest source market with 3.31 million tourists during the period.

The government is aiming for 36.7 million foreign visitors this year, compared with a record of nearly 40 million in pre-pandemic 2019.