The global Covid-19 pandemic has devastated many countries globally and one of the consequences was the almost complete closure of international tourism in March last year (2020).
Main picture credit Chuttersnap on Unsplash
The economic impact of tourism should not be underestimated.
A number of countries have started to reopen their borders to foreign tourists, at least in a limited way.
Countries like the Maldives and the Seychelles rely on tourism far more than other countries. Their small populations and quick action meant that they quickly vaccinated as many people as possible giving them confidence to welcome back tourists.
Many larger countries, especially in Southeast Asia, have found it much more difficult to access sufficient vaccines and are still struggling to inoculate significant numbers of the population.
The hard line shown by the same countries on lockdowns has also seen a number of them less enthusiastic about an early relaxation of restrictions.
Opening of Borders
Thailand recently decided that the time was right to welcome back foreign tourists.
The sandbox however was a trial, learning lessons and making sure that the rest of Thailand could slowly reopen. The Thai Prime Minister pledged that much of the country would be welcoming international tourists by mid-October this year.
Koh Samui reopened on 15th July and more recently an extension to the Phuket Sandbox was launched. Singapore is ready to welcome travellers from very select countries, including Germany. Malaysia is preparing plans to welcome tourists to Langkawi.
However it is not all good news.
There are calls from within Cambodia to announce plans to reopen the borders to tourists amid fears of the loss of another high season.
Vietnam has seen increasing levels of Covid-19 cases, as has much of the region, and significant restrictions and lockdowns.
The Koh Samui opening has seen less than 500 foreign visitors in its first month.
Just opening the borders is not enough to welcome back large numbers of tourists however.
For many travellers there are potential consequences for their trip.
Many countries publish lists of where travel is advised or allowed, to and from. Ignoring that guidance can have serious consequences. Travel insurance may not be valid or quarantine may be required on returning home. Just last week the UK announced that Thailand would be added to the travel “red list” meaning that everyone arriving back in the UK would need to spend 10, expensive, days in a quarantine hotel.
Quarantine on arrival is a major barrier to travellers arriving, the Koh Samui experiment which requires an initial 7 day quarantine is testimony to this.
And quarantine is not the only barrier that countries are putting in place even when they are hoping to welcome back tourists.
For example prior to the pandemic travellers from many countries could entry Thailand without a pre-arranged visa as long as they had a passport with at least 6 months validity. Now to enter they must also have:
- be fully vaccinated
- have return air travel booked
- have approved accommodation booked for at least the first 14 days of their stay
- been in an approved country for the previous 21 days
- have purchased required Covid-19 tests for their stay in Thailand, as well as a pre-departure negative test
- have medical insurance with Covid-19 coverage of at least US$100,000
- apply for a Certificate of Entry (COE)
Many people have reported that the process is not easy and that COE approvals can be slow arriving.
We recently shared news that Hua Hin in Thailand was hopeful of welcoming back foreign tourists from October. The post prompted this response from a follower.
Doesn’t matter. The process to travel to Thailand right now is arduous and simply a money grab. Hotels at least 3 times more expensive. Hundreds of dollars for a certificate, hundreds of dollars for covid tests. No thanksFlyingdog Travel follower
Tourism chiefs throughout the world will be aware that many people have similar objections.
There are people who are unable to have a Covid-19 vaccination due to existing medical conditions. There are others who either refuse to have the inoculation or may struggle to access one.
Unlike Thailand, which allows unvaccinated children to enter with a vaccinated adult, Singapore has said that everyone must be vaccinated when they reopen. The Covid-19 vaccines are, generally, not available to children under 12 years of age. Singapore are effectively banning young children from holidaying there at the present time.
Welcoming back tourists will not be as simple as just opening the borders.
So is it, as suggested in the quote above, a huge money grab by Thai authorities, airlines, hotels and the PCR test industry?
Thailand has been hugely impacted by the lack of tourists since March last year (See National Economic Impact below).
Are they now looking at ways to grab some of that loss money back by introducing excessive fees on travellers?
The COE itself should not cost anything. The process itself is not easy however. There are therefore a number of official and unofficial organisations and companies who will help with the whole process, the fees for these can be very expensive, with no guarantee of approval.
The number of airlines and flights being operated are significantly lower than pre-pandemic.
For example Thai Airways used to operate two direct flights a day from London to Heathrow and Bangkok. These flights, generally, had relatively high occupancy rates. Since Phuket reopened Thai have operated one flight per week between the two countries at a much lower occupancy rate.
There is no competition on routes, which helps to drive down prices, occupancy is low and airlines are having to route aircraft in ways that is far less economical. All of these factors will make it more expensive for airlines to operate routes and will drive up prices.
The vast majority of hotels in Thailand have had very little trade since March last year. There has been some increased domestic tourism but even this has ended since the latest outbreak in the country which started in April this year.
The first hotels have now opened for foreign tourists but have many challenges to reopen their doors, not least the lack of tourists.
All hotels, and many other businesses in the sector, must have Thailand Safety and Health Administration (SHA) accreditation before they can welcome tourists. The accreditation recognises businesses who have met minimum improvements to their products, services and sanitation measures key to reducing the spread of Covid-19.
Many of these improvements, especially for accommodation providers are not cheap.
So far just 177 out of 671 hotels in Koh Samui have gained SHA accreditation and reopened.
Hotels are also struggling with staffing with many of their pre-pandemic staff returning to their home towns and provinces.
Hotels are also running on much lower occupancy levels than pre-pandemic
Covid Test Fees
Global tourism bodies have called for travel PCR tests to be free for all to help rebuild the travel and tourism economy. However in reality the cost of PCR test fees around the world vary massively.
Admiral conducting a survey earlier this month of the costs for PCR tests in a number of countries. Results were startling.
The average cost of a PCR test was £20.52 (US$28.17) in Turkey, £42.35 ($58.14) in France and £46.93 (US$64.42) in the Maldives. At the other end of the scale, tests averaged at £118.88 (US$163.20) in the USA, £92 (US$126.30) in the UK and £85 (US$16.69) in Portugal.
Currently tests for travellers in Thailand cost between 2,400 baht (£53.58 / US$73.53) and 2,800 baht (£62.49 / US$85.78).
Will It Improve?
Thailand is very much in the infancy of its tourism reopening.
There is still nervousness among many in the country that tourists have been allowed back too soon.
It is likely that many of the processes will remain in place until they are happy for a full reopening and welcome back mass tourism. At the moment they are not looking for huge numbers of tourists, just enough to start the rebuilding process.
One way which may help them to relax the COE process is if there is international agreement on the use of technological solutions to ensure proof of vaccination and negative Covid status prior to travel. A number of mobile phone apps already exist but there is no internationally agreed standard or solution in place.
Flight and hotel costs are likely to return closer to pre-pandemic levels as occupancy increases but we wouldn’t be surprised if there is still not an increase from previous levels. Businesses have huge losses and expenses to try and recover.
All countries will be hampered by restrictions placed elsewhere. There is very little that a destination country can do if the home country is charging large fees for vaccination certificates and tests.
They will start to find, once more destinations open, that they will have to make the process as easy as possible, and as cost effective as possible to prevent tourists heading elsewhere.
The National Economic Impact
Data from Koema states that in 2019, travel and tourism contributed 66% of the Gross Domestic Product (GDP) in the Maldives. Compare that to major nations, who themselves have large travel and tourism industries, where the GDP contribution is much lower; United States 7.8%, Germany 8.6% and the UK 10.9%.
Almost 40 million foreign visitors arrived in Thailand in 2019 contributing around 21.9% of the countries GDP. This year just 5 million visitors are expected, and this is still an optimistic target.
Thousands of Thais have left tourist areas to return to their home towns and provinces elsewhere in the country. Many more migrant workers in the travel and tourism industry, especially from Myanmar, have also returned home. Many of these workers were sending money home to extended family adding to the financial impact.
Elsewhere in Southeast Asia travel and tourism contribution to GDP was 32.7% in Cambodia, 24.6% in the Philippines, 13.3% in Malaysia, 12% in Laos, 10% in Singapore, 9.1% in Vietnam and 6.% in Indonesia.
The Future – Quality Over Quantity
A number of countries have looked closely at their tourism business and some have not been happy with what they have seen.
A number of countries in Southeast Asia have high levels of low-value tourism. Visitors who spend relatively little with Thai businesses.
Large numbers of tourists have a huge environmental and societal impact, not just in in their travel, but also in the local communities that they visit.
They last year has seen a huge increase in the interest globally in sustainable and responsible travel. There is no way that this can be achieved with mass, low-value tourism.
There is also no doubt that the more tourists that visit each year, the more, non-essential associated costs will increase, crime, pollution, accidents etc.
There is therefore an increasing interest in developing tourism more sustainably in the future and reducing the overall numbers of tourists while increasing the income per head.
Using Thailand as an example again, we have seen both the Thai government and tourism leaders expressing a desire to move away from sheer numbers of visitors and concentrate on people staying longer and spending more per head on their visits.
Their is also a belief among many that high-value tourists are also less likely to engage in crime and anti-social behaviour.
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