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Skål Bangkok’s Wood warns of a deepening Thailand tourism crisis

Skål Bangkok’s Wood warns of a deepening Thailand tourism crisis
Thailand provinces on Deep Red COVID-19 alert

It is becoming increasingly evident that the damage being inflicted to Thailand’s massive travel and tourism industry is proving to be critical with deep long lasting structural economic damage that is set to worsen rather than improve.

With the current official mindset of allowing the industry, that employs millions in Thailand, to be sacrificed; thrown to the COVID wolf with no meaningful financial lifelines, left to fend for itself and potentially fail. With no hope of borders being opened by mid 2021, even with the introduction of vaccines in key feeder markets, there is confusion and a leadership vacuum in our industry.

I call upon our industry leaders and government to speak with one voice – avoid conflicting information and mixed messages. One official voice only. All statements to be made and sanctioned from this ONE source.

Let us have our own Center for COVID-19 Tourism Situation Administration (CCTSA), chaired by Thailand’s Prime Minister Prayut Chan-o-cha and travel and tourism leaders from both public and private sectors.

Confusion is rife. Earlier the PM announced tourism would not open before mid 2021 however both the MOT&S and TAT gave different dates.

Currently any entry to Thailand by tourists involves 14 day quarantine. I am sure I am not the only person to say this but let me say loudly and clearly that tourism promotions with 2 weeks quarantine WILL FAIL. Now vaccines are starting to be introduce lets look at other low risk options for borders to be gradually opened. I plead to the government to allow this. Otherwise the structural damage to our tourism economy will take us until 2025 to repair.

As the Thai government ponders on whether it will take a chance and save the tourism industry and reopen the kingdom to even a limited and controlled form of foreign tourism, the economic analysis arm of Krungthai Bank has revealed that the kingdom is losing over THB 8 billion (USD 265m) a day on lost tourism revenue since early April due to the unprecedented block placed by Thai authorities on incoming passenger flights from foreign countries since the beginning of April.

Hotel owners are deeply concerned. Vitavas Vibhagool, chief executive of Grande Asset Hotels and Property, said yesterday that all six of its hotels need to strengthen occupancy rates while Thailand remains closed to mass tourism. “We’ve never experienced an occupancy rate as low as 3-4% like this year, as the usual rate is 70%” said Mr Vitavas.

“This crisis is the most severe in our history, with the company offering 10 million baht (USD 332,000) in financial support per hotel per month.”

A recent survey suggested that 57% of global tourism will have been wiped out by the pandemic by the end of 2020. In Thailand this figure will be nearer to 80% and highlighted Bangkok as the destination which will see the sharpest drop in the world. Thailand will lose THB 2.1 trillion (USD 69.7billion) in income before the end of the year in lost tourism revenue.

From my perspective the trillions of baht in income has not only been lost to Thailand by established tourist firms such as hotels, airlines and travel companies but also millions of once self-employed Thais who serviced the now-defunct industry.

Skålleague and GM of the Hyatt Regency Bangkok Hotel, Mr.Sammy Carolus is also worried about the future, expressing concern about a delay in reopening the country to foreign tourists. “The longest the industry can wait is the first quarter of 2021 before the hospitality sector worsens considerably,” said Mr Carolus.

“The reopening should be done in stages, starting with lower risk countries such as Vietnam, Singapore, Taiwan and Brunei,” he said. Next on the list should be Australia, China, New Zealand, Japan and South Korea.”

Thailand’s tourist industry economy was estimated to account for 20% of its GDP. But this is an historic figure. The events of 2020 and inflicted damage also raises strong concerns about the return of foreign tourists to Thailand in 2021.

Historic figures for January 2020 to April this year also means that a failure to reopen Thailand to foreign tourism before the end of 2020 is likely to see sharper Thai GDP contraction in the first quarter of 2021, a period which is usually buoyant for the kingdom. Thailand may have to be prepared to wait for up to four years before tourism, as we knew it before, resumes in 2025.

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Thailand has one of the lowest number of coronavirus cases in the world. With only 4,039 cases and 60 deaths. However the governor of the Tourism Authority of Thailand said that although Thailand had relaxed entry restrictions for some groups in the past two months, there were only 1,200 international arrivals in October, a far cry from the three million a month prior to the pandemic.

Yuthasak stressed that the resurgence of the coronavirus is likely to hamper international travel for some time. According to a survey by 29 TAT overseas offices, tourists said they will be unlikely to take overseas trips before next summer.

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About the author

Andrew J. Wood - eTN Thailand