One third of tourism businesses could go under due to Covid-19
The president of the Tourism Council of Thailand is warning that close to a third of tourism-related businesses are likely to be permanently shuttered in the second half of this year, due to the impact of the Covid-19 crisis. Chairat Trirattanajarasporn says many will simply run out of liquidity to keep their businesses afloat and be forced to close up shop altogether.
“The impact of Covid-19 will become most serious in the third quarter this year after many operators tried to cut costs by letting some of their employees go, but after more than a million positions cut the situation still hasn’t improved, as no foreign tourists are allowed into the country yet. The council estimates that in the next 3 months around 30% of tourism-related businesses in Thailand are at risk of shutting down permanently.”
He says that many operators are starting to sell their establishments, including hotels, resorts, restaurants and gift shops to investors who want to turn them into other businesses.
“However, since the real estate business is also affected by the economic crisis, the hope of selling their properties is still bleak for these owners. The council had a meeting with PM Prayut Chan-o-cha on Friday and proposed 5 measures to help tourism business operators.”
The measures are:
- providing soft loans to tourism entrepreneurs
- considering moving the schedule up to open the country to foreign tourists under a practice similar to the travel bubble scheme
- offering discount on electricity bills, one of the main costs of hotel operators
- having the Social Security Office extend the compensation payment to temporarily unemployed staff from June to December
- reducing the employer’s contribution to Social Security Fund from 4% to 1%.
He says that the TCT predicts that even in the best case, income from foreign tourism in 2020 will be slashed from 2.2 trillion baht last year to around 600 billion baht, or about 27.3%
Thailand’s government, successful with the local containment of Covid-19, is now confronted with a situation where the “playground is clean but there’s a big fence around it”. Its fears to re-open have been compounded by the large percentage of repatriating Thais who are testing positive for Covid-19 whilst serving their mandatory quarantine. Doctors suspect many picked up their infections during the repatriation process – at airports and during the long flights.
SOURCE: Nation Thailand
