Thailand’s long and slow recovery of its foreign tourism industry continues with a somewhat ambivalent attitude towards the now imminent prospect of a return of Chinese visitors due to a raging health crisis in China as Beijing abandons its zero Covid policy.
Thailand may offer free vaccines to all incoming foreign tourists under the latest policy initiative from Minister of Tourism and Sports Phiphat Ratchakitprakarn. The move comes as the kingdom contemplates the possible resumption of foreign tourism from China to Thailand while it still struggles to achieve anything like the visitor numbers and revenue generated in 2019. It lags behind countries such as Greece and France whose foreign tourism industries have already exceeded their 2019 performance while Thailand’s visitor numbers are mired at 29% of that seen in 2019 and even then, with reduced spending per head of between 14% and 20%.
Thailand’s Minister of Tourism and Sports Phiphat Ratchakitprakarn is to convene a meeting on January 5th of three ministries to explore the possibility of offering incoming tourists to the kingdom free COVID-19 vaccines in a gesture of goodwill and welcome to foreign visitors.
The ministries concerned are the Ministry of Transport, the Tourism Ministry and the Ministry of Public Health, all three currently under the control of the Bhumjaithai Party which, ahead of an election in 2023, appears to be failing to generate popular support according to the latest National Institute of Development Administration (NIDA) opinion poll published on December 25th last.
This is despite the defection of 34 ‘cobra’ MPs to its ranks just over a week earlier in mid-December.
Plan linked with the possible return of Chinese tourists to Thailand after January 8th move by officials to lift restrictions on travellers to China
The initiative is being linked to the potential return of Chinese visitors to the kingdom as the communist country has begun to lift all economic restrictions after it finally abandoned its ruinous zero Covid policy which sparked widespread and unprecedented public protest against the regime and the rule of President Xi Jinping.
Officials working with the minister whose proposal to extend opening hours for pubs and nightclubs in tourist areas to 4 am has been sidelined indefinitely, briefed reporters, saying that the latest initiative would be voluntary for all foreign tourists and would not just extend to Chinese visitors but those arriving from every country.
Officials have compared the proposed scheme to the trend during the pandemic which saw Thai nationals travel to Europe and the United States to receive jabs.
They have assured reporters that the cost of the exercise would be borne entirely by the Thai government with plans already being made for the Ministry of Public Health to purchase more vaccines to support the campaign.
Minister says paying for jabs for tourists makes good economic sense for Thailand as more are ordered
Minister Phiphat points out that the cost of a Covid vaccine can be measured in hundreds of baht whereas the average foreign tourist spends more than ฿40,000 with ฿2,800 alone in VAT on top of that which goes directly into the government’s coffers.
This initiative is bound to raise jitters among the Thai foreign tourism industry which wants to put the pandemic behind it.
In the last week, business leaders have urged the government to instead do more to attract more airlines and flights into Thailand as the lack of choice and increased cost are still hindering the recovery of tourism despite Thailand being on course to receive approximately 11.5 million foreign tourists this year.
This figure, of course, will still be only 29% of the 2019 level while spending per foreign tourist is also reported to be off by between 14% and 20% depending on which reports from government sources are correct.
Various state agencies, this year, identified a reported average tourist spend of between ฿40,000 to ฿43,000 compared to just over ฿50,000 reported in 2019.
Thailand’s foreign tourism industry has been battered with medium to long-term damage, it has failed to recover like countries such as Greece and France
This is thought to be due to more short-haul visitors from Asian countries staying for shorter periods as opposed to long-haul tourists.
The country appears to have suffered damage in the medium to long term to its critical economic engine because of the pandemic, underperforming other countries with large foreign tourist sectors.
For example, in October this year, Greece had already surpassed the $17.92 billion it earned in 2019 with reported earnings of $18.7 billion.
Similarly, France saw 22 million nights spent by tourists from April to September 2022, 2.4% ahead of the figure for 2019.
One leading industry figure in Phuket this week estimated that 30% of the hotels on the resort island have yet to reopen.
Tourism levy is postponed yet again, it is now to be called a ‘fee on landing’ with a plan to be reviewed on January 24th next by a key policy committee
Mr Phiphat, the Tourism Minister, also announced that the country’s foreign tourist levy which offers free insurance for all incoming arrivals and is to be charged at between $8 and $9, has yet again been postponed.
Levy in the pipeline since 2019 and comes with a key benefit: automatic medical insurance for visitors
The levy has been renamed as the ‘fee on landing’ and a new plan to introduce the charge will be presented on January 24th to the National Tourism Policy Committee (NTPC).
However, even then, ministry officials say this plan will need to be studied carefully to see if it is in line with tourist behaviour while also addressing the challenge of collecting the charge from visitors entering by land border crossings and by sea.
A key impediment to the plan, up to now, has been resistance from airlines who, while they are legally bound to comply with the law and have made no official complaint, have the option of declining to fly to Thailand or reducing flight frequency to the kingdom.
Proposed collection of the levy by international airlines in 2022 created additional reporting burdens
The proposed collection of the new levy in 2022 imposed an additional reporting burden on all incoming airlines who, under plans developed, were required to notify Bangkok of incoming passengers before they landed in Thailand as well as collecting the levy and remitting it to the government.
It is already widely accepted within the airline industry that airlines are cautious about committing to Thailand because of the relatively low levels of profit on routes to the country.
It is understood that the cabinet will consider a revised proposal for the new tourist levy again in February and if approved, it is thought it will come into force from June 2023 onwards.
Chinese tourism market looks set to reopen in 2023 with 5 million Chinese visitors predicted by Tourism Authority of Thailand (TAT) chief Yuthasak
In the meantime, Tourism Authority of Thailand (TAT) Director-general Yuthasak Supasorn is already predicting that up to 500,000 Chinese visitors may travel to Thailand before the Chinese New Year in 2023 as the situation is rapidly developing north of Thailand’s border.
His comments come as authorities in Beijing signalled that from January 8th all entry restrictions to the country will be lifted.
Mr Yuthasak says that, if things go according to plan, this could raise his agency’s predicted number of foreign tourists in 2023 from 20 million to 25 million.
The tourism boss said that data from a Beijing-based travel platform Qunar saw searches for flight tickets rise by 700% in recent days with Thailand emerging as the preferred destination for Chinese holidaymakers ahead of Japan and South Korea.
He emphasised that the changes now underway in China are of significance after three years of lockdowns and restrictions.
Concerns in Thailand about a threat to public health if large numbers of Chinese tourists begin to pour in at this time of crisis in China over COVID-19
He also acknowledged rising concern in Thailand about the danger of large numbers of Chinese visitors coming from a country where the virus is still prevalent and placing acute pressure on public health systems.
It comes as Chinese authorities have cancelled all public announcements as to the toll of the virus wave including infections and deaths.
‘The most important factor is not how many Chinese will return to visit Thailand, but helping the country avoid another Covid wave and keeping Thais safe,’ Mr Yuthasak disclosed.
On the other hand, the tourist chief said that Thailand needs more foreign tourists to get its industry fully back to work.
Tourism chief urges action on flight connectivity
The President of the Association of Thai Travel Agents Sisdivachr Cheewarattanaporn, however, insisted that increased flight capacity to the country must be the overarching priority.
He also warned that China has yet to make known how it will handle the issuance of passports for outbound foreign tourists despite the apparent end of the zero Covid policy.
Marisa Sukosol Nunbhakdi, the President of the Thai Hotels Association was also cautious. She indicated that things will take time to progress.
She also warned that Thailand’s foreign tourism sector itself must up its game with a loss of trained staff during the long period when the industry was effectively closed.
‘The end of quarantine is good news from China, especially for small hotels in Thailand, but the pace of recovery will be gradual and depends on many factors,’ she said.
Pheu Thai to knock back skyrocketing electricity costs hitting business with a 21% rise in 2023 already confirmed
Among the challenges facing hoteliers were higher operational costs, not least the hike in electricity charges which is due to come into effect from January 2023 with hotels facing higher consumption amid improving occupancy rates.
Danger of becoming too dependent again on the Chinese market as airline chief warns of growing pressure on airport resources with large flight loads
The industry leader also warned that the country must be careful about becoming too dependent on any one market such as China which made up 28% of arrivals in 2019.
Her message was echoed by Thai Air Asia Executive Chairman Tassapon Bijleveld who said that if China reopens, it will take airlines time to put on more flights and services.
He pointed out that, currently, airlines operating international flights are achieving 85% to 90% load factors and that this means that airport authorities will also have to deploy more manpower in processing arrivals.
He expressed concern that an increase in flights from China may overwhelm the current resources at Thai airports and even cause flight delays due to a lack of ground handling services.
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