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We must establish travel bubbles – Thai tourism operators demand action

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There has been a surge of domestic tourism in Thailand. But even that ‘surge’ is underwhelming when compared to the previous international traffic, 27% of it from China, in the ‘good old days’. Last year there were nearly 40 million overseas arrivals.

Even places like Phuket and Khao Lak, usually starting to fill up with international travellers for the traditional high season that starts this time of the year, are seeing unusually high numbers of ‘locals’ who are visiting some of these spots, encouraged by government stimulus packages, for the first time.

Local tourism operators in the southern island hot spots have been licking their wounds and wondering why they haven’t worked harder over the years to lure domestic tourists. For the first time ever, the revenue from domestic tourists has surpassed international tourist $.

Now, even with local tourists enjoying the quiet islands and beaches, tourist and hotel operators realise they put all their eggs in one basket – international tourists and mass tourism. The entire industry is scrambling to re-invent itself with the rude awakening that the good old days are unlikely to return, at least in the medium term and maybe longer.

Just yesterday the Thai government’s Covid-19 Taskforce, the CCSA, decided to maintain the 14 day quarantine requirement for travellers. For now, any plans to reduce the mandatory requirement to 10 days or less has been shelved. And the Special Tourist Visa, the ‘solution’ to allow international tourists back into Thailand, has seen less than 300 people arrive on the STV visa.

Thai travellers will spend about 500 billion baht on their travels around the country this year. That’s about half of what they spent last year but makes up almost all of the country’s current tourism revenue at the moment, according to the Kasikorn Research Centre. Foreigners, even the steady traffic from earlier in the year, will end up spending, in total, around 300 billion baht for the whole of 2020. The Tourism Authority of Thailand says the figure equates to just 17% of last year’s massive 39.8 million international visitors.

The Thai government is now caught between the competing national interests of public health (keeping the borders closed) and trying to reboot its economy (opening up the borders). Depending on the week the varying interests wax and wane. One issue is the mandatory 14 day quarantine which is being considered for revue, to be reduced to 10 days. For now, a final decision to reduce the number of days has been “deferred”.

Suphajee Suthumpun, Dusit Thani’s group CEO, says if the country is not reopened soon, hotel operators will suffer heavy losses. Also, she said, banks and financial institutions are not granting loans easily to tourism businesses to because of the risks.

“Hence, we want to ask the government to issue financial measures to support tourism businesses and to instruct the Thai Credit Guarantee Corporation to guarantee loans for small and medium enterprises.”

“We also want to ask the central bank to ease rules related to debentures as many large enterprises’ debentures are nearing maturity.”

Chaiyapat Paitoon, Minor International’s chief strategy officer, says the company had lost more than 14 billion baht in the first nine months of the year, and its businesses in Thailand accounted for 2 billion baht of the losses.

He said the company may need to boost its liquidity, by either finding new capital or launching debentures if the government does not reopen the country soon.

“The government should look into travel-bubble schemes, ease self-isolation rules and launch measures to support entrepreneurs.”

Marisa Sukosol Nunbhakdi, executive vice president of Sukosol Hotels and chairperson of the Thai Hotels Association, says the government should launch measures to help hotels, such as paying 50% of hotel staffs’ salaries as it has been doing for new graduates.

“The government should also extend its 2 per cent contribution to the Social Security Fund, set land and building tax at 10 per cent and ease self-isolation rules.”

Parkpoom Prapasawudi, vice president of the Erawan Group’s Hotel Asset Management division, says hotel occupancy has been at 20 per cent for more than 5 months due to travel restrictions.

“The situation in Thailand is different from China and Europe, where occupancy rate is 50 to 60 per cent and 30 to 40 per cent, respectively. The country must be reopened because hotels cannot survive if occupancy remains so low.”

SCMP reports that the president of the Association of Thai Travel Agents, Wichit Prakobkosol, says he hopes Thailand will consider launching tourist travel bubbles with low-risk nations. The idea has been on the table for months but the changes of fortune for previously low-risk countries keeps changing, making negotiations difficult.

“If we intend to launch a travel bubble, then we can focus on areas with no reports of coronavirus cases in the last 150 days, including China, Vietnam, Taiwan and New Zealand. Some 20 Chinese provinces had not recorded any infections in the past few months.”

“Without doing this, 2 million people… half of all human resources in Thailand’s tourism sector… will be out of jobs within the first quarter of next year.”

For now authorities seem determined to keep the dribble of international visitors funnelled through the capital where, officials say, they are well set up with the infrastructure to handle possible infections and the safe passage to quarantine of international arrivals.

Even the “Phuket Model”, an attempt to decentralise the international arrivals, was shelved, mostly through local fears. Some hotels geared up and went through the expensive process of ALSQ registration, only to find their efforts wasted.

c9hotelworks.cmm MD, Bill Barnett, says Phuket’s main advantage is that it already has controlled borders where a “bubble” could easily be managed.

“It required a 14 day Alternative Local State Quarantine at approved hotels on the island and a long-term tourist visa. A total of 17 Phuket hotels were approved as ALSQ providers, with 21 more applying for the status, but the government later backtracked and decided to make all international travellers arrive only in Bangkok and use ALSQ hotels there. This was a loss of opportunity for the southern region.”

“In essence, it seems what happens in Bangkok, stays in Bangkok.”

ORIGINAL SOURCE: SCMP

 

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12 Comments

12 Comments

  1. Avatar

    EdwardV

    Thursday, November 19, 2020 at 12:34 pm

    “For the first time ever, the revenue from domestic tourists has surpassed international tourist” – low bar considering international tourism has been virtually dead since March. Travel bubbles will only really help if both sides drop their quarantine. For example, right now China still requires its returning citizens to quarantine, so it’s not likely a large number will travel to Thailand. People don’t want to quarantine in either direction.

  2. Avatar

    jesus monroe

    Thursday, November 19, 2020 at 12:41 pm

    Until the government stimulus packages run out that is……….

  3. Avatar

    Etienne Dodane

    Thursday, November 19, 2020 at 6:14 pm

    Me and my team Support the Thai Industry by creating business opportunities that we can no longer support. I used to spend 1 week per month to support the growth of this business and not being able to return to thailand for short business trips is making our annual 10M$ revenu that we generate for dozens of families endangered. If we cannot return with no quarantine before the end of january, there would be not point returning at all as our business will be lost for sure. The lack of decision for people who have to be there for business will cripple the country. I am now, not so sure that I would bother spending my time to support the economy of Thailand keeps doing it to us.

  4. Avatar

    Etienne Dodane

    Thursday, November 19, 2020 at 6:18 pm

    Also just to confirm that the idea that China has lower cases than anywhere else is absolute propaganda of the first order. We have learnt at our expense that counties make the numbers they want when they want. Chinese tourist may visit Thailand a lot but they do not support the industry like European businessmen do. It is only one side of the story.

  5. Avatar

    Veejay

    Thursday, November 19, 2020 at 6:31 pm

    It will be interesting to watch the HK-SG travel bubble. And the government can certainly learn from that. If that arrangement works there is no probably no need for STVs.

    If you can design and mandate a trace app on your mobile phone with a local mobile number that’s another way to risk manage.

  6. Avatar

    Issan John

    Thursday, November 19, 2020 at 6:54 pm

    “Chaiyapat Paitoon, Minor International’s chief strategy officer, says the company had lost more than 14 billion baht in the first nine months of the year, and its businesses in Thailand accounted for 2 billion baht of the losses.”

    So Minor International has lost 2 bn baht in Thailand and 12 bn baht in Spain.

    TWO in Thailand and TWELVE in Spain.

    … and Spain’s given them the square root of diddley squat, so they’re hoping Thailand’s going to bail them out …

    • Avatar

      Mike Frenchie

      Friday, November 20, 2020 at 2:59 am

      Minor hotels are 70% abroad… wait for the missed high season – Thailand will climb back.

  7. Avatar

    preesy chepuce

    Thursday, November 19, 2020 at 7:54 pm

    Large dependence on tourism is for countries that don’t really have much choice – small island nations for example. Places like Thailand and Spain are anomalies in the tourism game, because they are medium-sized countries capable of being highly industrialised, yet they continue to have large dependencies on tourism, which is always a tenuous industry.
    If you look at the other major tourism recipient countries – USA, Japan, France, UK, Italy… all of them have more diversified economies with export industries and domestic consumers with disposable income. It’s pretty self-evident that not only Thailand, but Spain, Portugal, Brazil, Indonesia, India, etc… need to diversify and develop their economies away from tourism. Thailand though, is hit pretty hard, and should look at Vietnam for lessons in not depending on tourism for national economic development.

  8. Avatar

    Patrick Kelly

    Thursday, November 19, 2020 at 10:21 pm

    What a mess the Wuhan Flu has caused! The after effects will last for several years.

    • Avatar

      Monster

      Saturday, November 21, 2020 at 9:39 am

      Yes thanks to China. Many separated from loved ones for almost a year. Many businesses bankrupt. Once a comfortable life many become depress and suicide rate is high. China not only cause people dying from covid but also those suicide cases all over the world

    • Avatar

      Don R

      Tuesday, November 24, 2020 at 11:01 am

      The effects will last forever. They can never set right the lives they have destroyed, and they don’t care enough to even bother. It’s an exercise in fear and virtue signalling; when push comes to shove, none of these covid panic warriors actually care much about people.

      I blame the media for hyping it. I also suspect that China and Asia in general took the world for a ride by putting on a big show at the beginning, claiming 3% IFR when it was closer to 0.3%.

  9. Avatar

    Mike Frenchie

    Friday, November 20, 2020 at 2:29 am

    There will be no travel bubble with a country not testing its citizens in a sizable manner… (Thailand). Not a chance in a lifetime that China, Korea drop their own quarantine on the way back. Nobody will also come for the current 2 weeks scheme… Thailand tourism and its >15% GDP is dead… Guys like Minor are in the 6 trillion THB debt considered as “safe” by the Thai banks… this may unfortunately change.

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