Thailand removed the last of its COVID-19 pandemic-related travel restrictions on Friday, but the nation’s once-vibrant tourism industry still faces plenty of challenges on its long road to recovery, not least the continued absence of big-spending Chinese visitors.
Anyone can now travel to the Southeast Asian country without having to register for a so-called Thailand Pass before arriving, the last entry requirement remaining after Thailand had ditched all other COVID-19 entry rules.
Friday’s move itself is unlikely to spark a sudden rush of visitors, especially as it is now the low season. While the earlier dismantling of other, more onerous rules, such as quarantine, has helped lure some visitors back to the country, Thai businesses still desperately need a bigger influx of customers after COVID-19 torched international travel and left tourist hotspots deserted.
“Tourists will return, but our survival will be challenging,” Tourism Council of Thailand President Chamnan Srisawat said. “Less than half of tourism businesses have resumed and those that are open again don’t have enough customers to operate profitably.”
Thailand expects 9.3 million foreign arrivals this year, compared with only about 428,000 last year. That is still a far cry from the 40 million visitors in 2019. Arrivals are expected to reach 24 million, or 60 percent of pre-pandemic levels, as far off as 2024, the World Bank said in a report on Wednesday last week.
International tourists spent 1.9 trillion baht (US$54 billion) in Thailand in 2019, and the industry has typically accounted for about 12 percent of the country’s GDP, according to official figures. Data on Thursday showed foreign travel spending in the first quarter of this year was 65.9 billion baht, an 86 percent increase from the lows of the same period last year.
China used to be the biggest source of tourists, making up more than one- quarter of international arrivals. However, Thailand will have to rebuild without that crucial inflow for the foreseeable future as Beijing maintains a tight grip on travel in its pursuit of “zero COVID-19.”
“Chinese tourists are a key factor to the recovery,” said Suksit Suvunditkul, president of Thai Hotels Association’s southern chapter.
Phuket is particularly popular with Chinese visitors, he said. “They used to fill every hotel, everywhere, whether seaside or downtown, all year round.”
Just to break even, hotels would need to increase occupancy rates to 50 percent from 30 percent now, said Marisa Sukosol Nunbhakdi, president of Thai Hotels Association, which last week urged the government to assist their recovery by allowing hotel operators to pay their land tax for this year over 10 installments and giving them more concessions from next year to 2025.
“With incurring expenses and no revenue, we had to endure massive losses,” Marisa said. “Staff who left have not returned to the sector.”
Hotels had debts of more than 400 billion baht with Thai commercial banks near the end of last year, the Bank of Thailand said, while the tourism industry lost more than 3 million workers from the start of the pandemic to the third quarter of last quarter, the Tourism Council of Thailand has estimated.
“The main challenge is to stay afloat through the third year of the pandemic, with income less than 30 percent what it was and many service workers gone,” Suksit said.
Thailand began its reopening process with a so-called sandbox program on the tropical island of Phuket, which allowed visitors to move freely outside their accommodation, but required them to remain on the island for seven days before traveling to other destinations in the country.
Phuket received more than 100,000 international visitors last month and reported hotel occupancy rates of about 40 percent, Suksit said.
Prior to COVID-19, it averaged 800,000 arrivals a month and 80 to 90 percent occupancy rates.
Phuket and other tourist meccas have generally been eerily quiet through much of the pandemic, with once-bustling beaches and temples devoid of tourists and tuk-tuk drivers scouring empty streets for customers.
“I used to look up and see so many feet when I prostrated before the Emerald Buddha, but now there are none,” said Taniwan Koonmongkon, president of the Thai Restaurant Association, who said a shortage of service workers is also plaguing the food and beverage industry.
Tourist numbers should increase toward the end of this year as the high season arrives, with Europeans exchanging cold winter climes for sunny beaches. Now that they can travel freely, there is hope on the horizon for the tourism industry, provided operators can make it that far.
“Since Thailand started to reopen last year, we have seen bookings resume at an ever increasing pace,” said Garth Simmons, chief executive officer for Southeast Asia at Accor SA, which operates 82 hotels across Thailand and is set to open five more this year.
“This is a resilient industry,” he said. “We are confident that demand will not only return to pre-pandemic levels, but likely exceed what we have ever witnessed before.”
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