Most senior officials and economists agree that vaccination programmes bringing about a return to health security is the only answer for Thailand’s tourism industry. Yet, for now, powerless industry leaders are clinging to hopes of a government rescue or increasingly wild initiatives to draw in streams of foreign tourists from abroad despite the unwelcome entry restrictions.
Thailand’s tourism chiefs are looking urgently to see how the country’s tourism infrastructure can be preserved as the crisis in the industry will extend until at least October this year when both the Minister of Tourism and Sports, Phiphat Ratchakitprakarn and the Governor of the Tourism Authority of Thailand Yuthasak Supasorn have indicated that mass-market tourism will again resume based on a target of achieving 10 million visitors in the last three months of 2021. In the meantime, a range of supports are being sought by desperate foreign tourism-related sectors at meetings with government officials as well as endless and recurring schemes to attract large numbers of inbound visitors since the kingdom shut its doors to air traffic passengers in early April last year and they were not seen again in volume.
The floundering foreign tourism industry in Thailand is desperate to see the government implement measures to rescue failing firms as the de facto closure of the industry approaches its anniversary in early April this year.
The concern now is that the scale of losses within the industry may damage the kingdom’s ability to recover quickly even if the Covid-19 health threat eventually recedes.
Nearly 35% of all tourism-related firms have already closed with 80% of travel concerns gone dark
It comes as an industry survey, conducted in the opening weeks of January, showed that nearly 35% of firms have so far closed their doors, no longer able to sustain mounting losses.
The survey was conducted days before the Minister of Tourism and Sports, Phiphat Ratchakitprakarn, met with representatives of the travel industry at the ministry in Bangkok where he was told that 80% of its members had already closed and that a full 30% would never reopen.
Minister and top tourism official set October 1st for a return to normal service for visitors to Thailand
In the meantime, Minister Phiphat and the Governor of the Tourism Authority of Thailand, Yuthasak Supasorn have both predicted that Thailand will see 10 million visitors enter the kingdom from October 1st this year which would be dependent on a return to mass-market tourism.
The scale of the economic damage produced by this pandemic, so far, across the world is likely also to have damaged longer-term economic prospects and patterns although IATA, the International Air Transport Association, has suggested that a recovery seen in China in the domestic airline market there, does indicate that the airline industry and demand is capable of recovering quickly.
Tourism Authority of Thailand survey of tourism businesses – many are hotels and nearly two-thirds are small to medium-sized concerns
The TAT survey of the travel industry was conducted from January 10th to 12th. The survey sample was nearly 1,900 respondents from firms across the industry.
Over 20% of the businesses were based in Phuket while Bangkok accounted for 12.5%, Chiang Mai 9.5% and Surat Thani nearly 9%. Krabi accounted for over 6% of those who replied while Chonburi operators only made up just over 4%.
Over 44% of those questioned were hoteliers followed by nearly 24% who were travel firms and 10.4% restaurants. Those questioned also included theme parks, airlines as well as entertainment and retail outlets that are dependent on foreign tourism.
The survey showed that over 65% of these firms were small to medium-sized operations with a total value of ฿5 million to ฿25 million.
Over 93% need government help to pay the bills
The key concern of business operators was how to cut costs and somehow survive the ongoing drought in income.
Over 93% of those polled identified government support to reduce their costs, such as funding salaries and overhead deductions on water and electricity charges, as the chief way the government could help.
The next concern for the firms was debt repayment.
Neary 80% listed this as a priority and sought suspension of principal payments on loans for an extended period of up to 24 months given the nature of the problem that has emerged.
They also sought lower interest rates with over 58% suggesting a rate to be charged of 1 to 3%.
Soft loans an aspiration as TAT governor underlines the need for support for the industry now
The third form of assistance, sought and advocated by 79%, was the introduction of a significant soft loan facility. Some business operators, 70% of the total, sought loans without personal guarantees.
Domestic airlines have indicated their disappointment over the past few weeks that the government has not delivered on a proposal, floated last year, to provide such loans to the key airlines still operating in the kingdom.
There were definite indications in 2020 that this might be an option.
Yuthasak Supasorn, the Tourism Authority of Thailand governor said this week that the government should act to support and help the travel and tourism sector right now.
‘We have to prioritise operators’ needs and help them get through the current difficulties, even though the TAT is mainly responsible for marketing,’ he said.
Civil Aviation Authority of Thailand extends concession to airlines but they need access to funding
In recent days, the Transport Ministry and the Civil Aviation Authority of Thailand have announced a package of measures consisting of extensions of cost concessions already made which is of little benefit to airlines with a growing list of flights grounded because of measures to combat the second wave of Covid-19.
Thailand’s airlines have sought ฿14 billion in soft loan assistance, down from an original ask of ฿24 billion, with the latest figures from IATA showing airline flight activity down by over 70% towards the end of December.
However, the only soft loan facility being mooted right now is in respect of the Civil Aviation Authority of Thailand itself because of the losses it is also suffering.
Normalisation and the elimination of Covid-19 is the only recourse for the tourism industry
Meanwhile, the only way back for the industry is normalisation and elimination of the effects driven by the Covid-19 health threat. This will take a successful vaccination programme in Thailand in addition to similar programmes in countries around the world.
Thailand is to commence its vaccination process at the end of February with the Chinese Sinovac jab being administered to front line medical staff, the elderly and the most at risk.
The plan foresees 50% of the population being inoculated by the end of 2021.
Another foreign tourism idea – vaccination travel packages at ฿150,000 for one month in Thailand
One indicator of how desperate the foreign tourism industry is in Thailand right now is the neverending series of initiatives and proposals that have been floated from tourism bubbles to an endless supply of Chinese visitors that can be activated by a switch or order from Beijing.
The Tourism Council of Thailand has come out with another such proposal to attract foreign tourists to the kingdom by offering a vaccination tourism package comprising of a one month stay in the kingdom for ฿150,000.
‘Tourism-related operators will not be able to stay afloat until mass vaccination programmes take place globally,’ said Chamnan Srisawat, the President of the Tourism Council of Thailand in recent days.
‘After the vaccines arrive, we need a tourism plan by the second quarter this year to create more demand,’ he explained. ‘We still need financial relief from the government.’
Plan needs more discussion and consideration
The travel industry chief admitted that the plan needed more discussion. He suggested that a partnership with Thailand’s private hospital network, who could import the vaccines, and Alternative State Quarantine scheme hotels, could work.
The plan received a cool response from Chotechuang Soorangura, the Managing Director of a firm called NS Travel and Tours.
Mr Chotechuang pointed to the current confusion over vaccination passport proposals worldwide and the likelihood that most foreign tourists would prefer to have their vaccination at home overseen by their own government given the sensitive and perhaps critical nature of the process.
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Further reading:
Challenge of the virus and closure to tourism leads to major long term changes in the Thai economy
Finance Minister says economy must pivot away from tourism with a switch to S-Curve industries
Strengthening baht predicted as investors bet on a reopening of Thailand to mass tourism in 2021
World’s biggest free trade deal just signed will be a huge boost for the Thai economy and exports
RCEP deal agreed as India opts out – busy Bangkok ASEAN summit concludes on a low key
Chinese FM to visit Thailand in a Covid battered world of raised tensions and potential conflict
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Thailand’s economy has become dependent on government expenditure to stay above water
Thailand and US aim for a new more ‘proactive’ trading relationship as ambassador meets Prayuth
Rice price spike but drought conditions to recede – security concern for the Mekong river
US suspension of Thai preferential trade partner status part of Trump’s ongoing trade war
