In 2019 tourism contributed around 20% of the country’s Gross Domestic Product (GDP).
Bangkok is the world’s second most visited city.
This year Thailand was predicting record numbers of tourists, 40 million of them. I was one of those back in February before COVID shut the world down. Now some estimates predict just 8 million tourists in 2020.
The COVID-19 impact on Thailand has therefore been massive and finding ways to encourage tourism and open up the country again are seen as important to the long term financial stability of the country. However the country is also committed in its battle against COVID. It is a difficult balancing act.
For more information on how Thailand has dealt with COVID-19 see our post Thailand and the Battle Against COVID-19.
We have also looked at the options throughout South East Asia in our post South East Asia, Open for Travel?
Thailand and COVID-19
Thailand was the first country outside of Asia with a confirmed case of COVID-19.
There were fears that the country could be hard hit due to the high number of foreign tourists and especially those from China.
Yet by 2nd October there have been only 3,575 cases in Thailand and just 59 deaths. Their early response and planning clearly paid off. For the latest COVID figures please see our post COVID-19 and South East Asia.
However as the country continues to lock down its borders the financial implications are increasing.
Opening the Borders
There have been a number of plans cited to help re-open the borders to foreign tourists.
The first of these to be approved is the Special Tourist Visa (STV) scheme, expected to be available from October until at least November 2021.
Thai Prime Minister Prayut Chan-o-cha confirmed that the cabinet had approved the scheme aimed at long-stay tourists who intended on traveling extensively around Thailand or who were looking to access Thai healthcare.
The STV will allow foreign tourists too stay for up to 90 days costing 2,000 Baht (approx. £50, $65) and could be extended up to twice to a maximum of 270 days.
All foreign tourists under the scheme would need to arrange and pay for quarantine for 14 days in a hospital or an Alternative State Quarantine (ASQ) hotel on arrival. They would also need to have proof of long-stay plans, for example booked accommodation, following quarantine. They would also need a COVID-19 free certificate and suitable travel and health insurance.
The scheme is expected to require up to three flights a week for STV tourists in the hope of generating 1 billion Baht (approx. £25 million, $32 million) per month. It is likely that travelers will need to access specially arranged chartered flights as they would need to fly to their end destination and scheduled international flights are not yet available.
The Tourism Authority of Thailand (TAT) have also proposed a quarantine waiver, aimed at Asian travelers who generally stay for less than two weeks. The proposal would need government approval and would need agreement between individual countries to be implemented.
Many people within Thailand, including high ranking officials and influential groups, have raised concerns about re-opening the borders too soon.
For travelers from the United Kingdom there was more good news as the country was added to the list of countries where self isolation would not be required for any travelers returning from the country.
Traditionally foreign tourism makes up around two thirds of tourism throughout Thailand. As part of the Thai programme to encourage domestic tourism, the government has set aside 10.8 million Baht (around £275,000, $350,000) for the scheme, utilising an app on a person’s mobile phone.
People who sign up to the scheme receive 40% off airfare and 10 nights accommodation. All payments, including meals and hotel costs are paid through the app, with additional living expenses added for each day.
The scheme has already seen Thais taking up the offer helping the tourism industry to survive an unprecedented downturn in business. It is thought around 800,000 Thais have signed up to the scheme, but converting those into tourists will be the next challenge.
TAT have also introduced a scheme to promote domestic travel with Chinese expats.
Working with Alipay and Fliggy, they are targeting Chinese expats living in Thailand to travel domestically.
Running from 24 August to 31 December the campaign rewards travelers with digital coupons worth around 1,738 Baht (approx. £45, $55) for each booking that they make through Fliggy and paid for using Alipay.
What TAT Says
Speaking to the Thai Hotels Association on 12th September, the Governor of TAT, Mr Yuthasak Supasorn said that “although this was the worst of the many crises that Thailand has experienced, it would be overcome with the same spirit of solidarity and unity like in the past.”
He continued by stating that TAT would “lead the country’s largest foreign exchange earner and job-creating industry” (tourism) “into a new future that would see creative and innovative solutions being applied to building a more sustainable and resilient industry.”
The press release from TAT continued by stating that the Governor “did not want to focus on how much pain the industry had suffered, but rather on how to prepare positively for the time when a vaccine would be found and restrictions on international travel lifted.”
Trying to reassure the industry further he estimated that in a best-case scenario, Thailand would see almost 21 million foreign visitors in 2021, down from the record 39.8 million seen in 2019.
Indicating that TAT expected many markets may still not be available to Thailand he went on to say that the primary source markets for these visitors would be North East Asia and ASEAN countries. They would also be targeting people with a high purchasing power and in good health.
Suggesting that budget travel would not be on the cards in Thailand for the foreseeable future he said that they would be targeting people with a high-purchasing power and in good health.
Mr. Yuthasak went on to say that nothing will be the same again. He praised national parks for setting strict limitations on the number of visitors and hoped that these would remain in place after the crisis recedes.
He said that this was an opportunity for industry to deal with problems like illegal hotels, tour operators and guides, waste problems and tourist exploitation. “I would like to see these problems disappear along with COVID-19. Let’s rebuild the industry. How can we learn to play a new game? How do we create this new future together?”
Mr Yuthasak introduced a three-dimensional (3D) strategy for the transition to a new era. This would incorporate:
- A bigger focus on domestic tourism, targeting the 12 million Thais who traveled abroad in 2019.
- Digitalisation of business processes to help businesses find new customers, improve retention, cut costs, create value and grow revenue.
- Create new dynamics to achieve a better balance between creating efficiency and managing risk.
Many businesses are struggling due to the lack of tourists.
The financial impact on Thailand would appear to be far worse than most of its neighbours due to the reliance on tourism. The International Monetary Fund (IMF) recently concluded that out of 52 countries, the Thai economy would be hit the hardest.
Obviously those businesses and people directly targeting tourists are badly hit, hotels, bars, restaurants etc. However other local businesses are also affected by the downturn and reduced spending power of locals. Many Thais have returned to their families elsewhere in Thailand from tourist areas.
Domestic travel is unlikely to be the solution either. The Phuket Hotels Association has said hotels can’t break-even with only domestic demand and that thousands of jobs are at risk if things do not change before the end of the year.
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