Thailand’s tourism industry struggles to deal with chronic labour shortage

Thailand is facing a major crisis: the Land of Smiles’ tourism industry is struggling to deal with its chronic labour shortage.

With over 11 million foreign tourists visiting Thailand since the country’s reopening in July 2022, the country is facing a major shortage of workers.

According to data from the Labour Ministry, popular tourist destinations such as Phuket, Chiang Mai, and Chon Buri are facing a serious labour crunch with a need to fill more than 17,000, 9,000, and 3,000 positions respectively.

Krisda Tansakul, the adviser to the Thai Hotel Association, admitted the industry is desperate for a larger workforce.

“It’s getting worse as more tourists come, and we don’t have a large enough workforce to serve them. We badly need more workers, from bellboys to hotel managers.”

In 2019, Thailand saw a peak in tourism with almost 40 million foreign visitors. However, the Covid-19 pandemic caused a sharp decline, dropping to 6.7 million tourists in 2020 and just 427,869 in 2021. Despite the setback, tourism numbers have rebounded to 11 million in the latter half of 2022 after reopening.

The tourism industry’s 3.9 million workers were greatly impacted by the drop in tourism, according to a study by the National Institute of Development Administration. Before the pandemic, there were 7.7 million workers in the sector, according to the Labor Ministry. Of those laid off, 60% returned to their hometowns to work in agriculture, 20% sought employment in other industries, and the remaining 20% started their own businesses.

Despite the optimistic outlook from the Tourism Council of Thailand (TCT), which expects up to 30 million foreign tourists in 2023, the industry is still facing challenges. With rising costs, hotels are finding it harder to turn a profit.

TCT President Chamnan Srisawat told Nikkei Asia…

“Big hotel chains are fleshing out their workforces by offering larger salaries, but small and mid-sized hotels still have liquidity issues, making it harder for them to spend on attracting new employees.”

To address the shortage of workers, the TCT is working with educational institutions nationwide to find workers and offering a 5-billion baht loan from the Government Savings Bank to small and mid-sized hotels.

The TCT is also bringing in trainees from schools devoted to tourism and hotel management to help fill open positions.

Chamnan said…

“It is a win-win measure because the trainees will get the jobs they are studying for, while operators can finally get the workforce at the right time”

The Land of Smiles is seeing a resurgence in tourism but the country is facing major challenges in keeping up with the demand. The insufficient workforce is not just affecting hotels but negatively impacting the country’s reputation as a tourist destination.