Thailand’s digital wallet initiative raises concerns among tourism sector

The forthcoming 10,000-baht digital wallet initiative has raised concerns among tourism operators in Thailand. The scheme is viewed as primarily beneficial to the retail sector, leaving the tourism sector behind, which could have potential economic repercussions leading to a potential decline in domestic travel.

Sanga Ruangwattanakul, the head of the Khao San Road Business Association, suggests the scheme offers limited advantages to businesses such as restaurants, bars, and accommodations in the Khao San area, which primarily rely on foreign revenue. The Bobae and Bang Lamphu markets in Phra Nakhon district, however, could potentially benefit from this initiative.

Sanga predicts that the impact of the scheme on the economy will be modest, contrary to some expectations. He proposes that the budget of 500 billion baht should be allocated to different projects, and the 100-billion-baht fund being prepared for 13 industries, including wellness tourism and aviation, should be directed towards more long-term investment, such as developing transport infrastructure and skilled labour to help turn Thailand into a regional hub.

Udom Srimahachota, vice-president of the Thai Hotels Association’s western chapter, foresees potential economic challenges. The scheme could create a significant burden in terms of public debt and inflation, driving up living costs and discouraging travel in the coming year, reported Bangkok Post.

Udom reported that many Thais are currently planning only one-day trips, spending less on food and products, and reducing overnight stays. He suggests that the government should consider allowing users to spend 3,000 baht from the handout for tourism purposes, such as hotel rooms.

To further stimulate local spending, he suggested that the scheme could restrict usage to only independent hotels which are still trying to recover compared with international brands.

Udom also proposed that the 100 billion baht competitiveness fund could be used to attract quality visitors to wellness tourism.

The president of the Chiang Mai Restaurant and Bistro Association, Tanit Choomsang, believes that locals will travel back to their hometowns during the six-month eligibility period for the digital wallet scheme.

He noted that Thais typically spend more than one-third of their money on food ingredients and dining out and suggested that the scheme should be extended to independent restaurants and local suppliers, which make up the majority in Chiang Mai, instead of just large chain operators.

Despite the uncertainty, Tanit reveals that restaurateurs are eager to prepare for the scheme once more details are provided. Nevertheless, he expresses concern about the impending minimum wage increase next year, which will mean higher expenses, while tourism spending has yet to bounce back to pre-2020 levels.