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Bank report predicts extended timeframe for Thai tourism recovery

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As the severity of the current situation facing Thailand’s lucrative tourism industry starts to sink in, Kasikorn Bank Research Centre have released a report with some stark predictions.

Thailand’s tourism and hospitality industry faces losses of 1.69 trillion baht in 2020 and recovery “may not be clearly evident” next year. The report also foreshadows strict ‘new normal’ procedures as government measures will control the entry and exit of foreign tourists, actually all foreigners, to prevent further outbreaks of Covid-19.

It has been clear, as restrictions continue whilst the number of new daily cases hovers in single-digits, that Thailand will paint itself as the zero-risk destination. Exactly how that may unfold, and the list of restrictions imposed, has not yet been announced. But the immigration doors are unlikely to be thrown open any times soon.

The impact of Covid-19 on travel demand and the weak purchasing power of future tourists has Kasikorn Research Centre predicting difficult times ahead for the country’s key tourism industry that contributes up to 18% of Thailand’s GDP.

“Even in 2021, recovery will probably not return. Therefore it will be a difficult period for businesses in the chain of the tourism sector.”

“Until a vaccine is found, tourism and hospitality operators will need to adjust their services and the content they offer to ensure they deliver safe distancing and comply with strict health measures.”

The research paper goes through a number of other key points…

• Health regulations will dictate the travel experience

• Touch-points will have to be removed as much as possible

• Safe distancing will need to be practised at popular tourist spots as well as when travelling or staying in hotels or transferring to and from airports

Tour operators face the challenge of offering safe bus transportation throughout Thailand guaranteeing social distancing, which will be required on all transfers. This will increase the cost of transfers and tours, and more buses will be required to transfer tour groups.

For tour groups visiting water or theme parks, flower gardens and museums will need to be carefully managed to prevent further Covid-19 outbreaks.

Even on planes, the option to reduce passenger load, in efforts to impose socially-distant seating, will make it impossible for airlines to operate profitably unless air fares prices substantially increase.

The entire tourism supply chain will be radically different if the ‘risk-free’ Thailand model is to be rolled out effectively. The report suggests that hotels will be invited to join certification schemes.

Tourist-fed economies like Pattaya, Phuket and Koh Samui will be the hardest hit and have a number of years ahead with a long timeframe for recovery reaching beyond the end of next year.

 

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