The number of foreign visitors will drop by 1.8 million during this period, threatening the full-year arrival target of 28.1 million.
TCT members discussed the issue on Wednesday and agreed to call on the caretaker government to lift the decree immediately, saying the present situation of mass rallies does not justify the declaration of a state of emergency.
TCT president Piyaman Techapaiboon said the tourism industry, particularly in Greater Bangkok, is already taking a hit, and the emergency decree will only worsen the situation.
The private sector believes imposition of the decree will prompt foreign countries to escalate the level of their travel notices.
At present, 46 countries and territories have issued travel advisories, mostly level 2 or 3, suggesting their citizens avoid the protest areas in Bangkok.
Only Hong Kong, Oman, Kuwait and the UAE have issued level 4 notices warning their people not to travel to Thailand.
The escalations have hurt tourist confidence and raised their insurance premiums, said Ms Piyaman.
Susdivachr Cheewarattanaporn, president of the Association of Thai Travel Agents (ATTA), said foreign tourists mistakenly believe the emergency decree imposes a curfew prohibiting people from being out in the city late at night.
The ATTA now projects 6.5 million foreign visitors in the first quarter, down from a previous forecast of 7.6 million.
The tourism industry in Greater Bangkok is expected to suffer a loss of 50 billion baht in the first quarter and 32 billion in the second quarter.
"First-half arrivals will number 12.6 million, a downward revision of 1.8 million from the earlier projection, due to the protests and emergency decree," said Mr Susdivachr, adding that Asian visitors will particularly be fewer.
The TCT said its short-term focus is on domestic tourism and building up a favourable tourism environment among Thai travellers, as foreign firms are cancelling their conferences here.
Businesses normally reserve enough cash for five or six months' spending, said Ms Piyaman.
Small and medium-sized enterprises will thus have liquidity problems, as the high season lasts only three months.