Bleak outlook prompts rethink

Thai govt orders launch of new tourism campaign to revive sector as spike in COVID-19 cases scupper recovery

In this file photo taken on March 12, 2021, traditional Thai dancers wearing protective face shields against the spread of the COVID-19 coronavirus perform at the Erawan Shrine in Bangkok. (MLADEN ANTONOV / AFP)

Thailand’s tourism industry is expected to face a slack peak season now that the country’s quarantine-free entry program to welcome back international tourists has been suspended indefinitely, experts say.

“We are kind of seeing a replay of 2021 where…hotels are focusing on domestic travel once again,” said Bill Barnett, managing director of hospitality consultancy C9 Hotelworks in Thailand.

He notes that winter in the northern hemisphere is usually an important season for Thailand’s tourism sector as people from the region, such as the United Kingdom, Germany, Canada and Russia, flock to this popular destination in Southeast Asia.

Barnett said the timing of the suspension of the reopening plan “was not exactly very good”. Russia has been the biggest inbound market for Thailand under the Test and Go program.

The Test and Go, a quarantine-free entry program for foreign tourists, was launched on Nov 1 as Thailand reopened to tourists from 63 countries. Due to a spike in COVID-19 infections, new registration for the program was halted on Dec 21

The Test and Go, a quarantine-free entry program for foreign tourists, was launched on Nov 1 as Thailand reopened to tourists from 63 countries. Due to a spike in COVID-19 infections, new registration for the program was halted on Dec 21. Eventually, on Jan 7, the program was suspended until further notice.

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After the suspension, Thai Prime Minister Prayut Chan-ocha ordered on Jan 12 the launch of a new tourism campaign under the theme “Amazing Thailand New Chapter” with the aim of reviving the hard-hit tourism sector.

The government also plans to introduce an entry fee of 300 baht ($9) per person for incoming tourists, starting from April this year, Xinhua News Agency reported citing government spokesman Thanakorn Wangboonkongchana.

The changes came as Thailand raised its COVID-19 alert level from three to four on Jan 6, which meant the closure of areas prone to cluster infections, reduction of inter-provincial travel and gatherings. Five is the highest warning level.

Thailand reported 8,167 new confirmed cases on Jan 13, bringing the national tally to 2,300,457, data from the Centre for COVID-19 Situation Administration, or CCSA, showed.

Omicron accounted for 70 percent of cases reported during Jan 2-8, according to the Bangkok Post.

In this file photo taken on Nov 2, 2021, Buddhist monks walk inside the Grand Palace in Bangkok. (LILLIAN SUWANRUMPHA / AFP)

The CCSA also forecast that the number of daily new cases could jump to 20,000 by the end of January if no serious precautionary measures are taken. 

Despite the suspension of the Test and Go program, international tourists can still enter Thailand through its Sandbox program, which allows travelers access to some places in the country after spending at least 7 days within a Sandbox destination. In addition to Phuket, the government decided on Jan 7 to add Ko Samui, Ko Tao and Ko Phangan to the program from Jan 11.

Panicha Thananaken, country manager of online travel company Traveloka Thailand, said domestic travel demand has mitigated the impact of the Test and Go program suspension.

Nevertheless, she says people are adopting a wait-and-see attitude before preparing for their trips. 

“Over the longer-term, we remain optimistic about international travel,” said Panicha, noting Southeast Asia is home to one of the world’s fastest growing markets driven by a large middle class of roughly 300 million people with a strong interest in traveling and international aspirations.

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Businesses in the Thai tourism industry have called on the government to reconsider the entry restrictions for foreign tourists.

William Heinecke, chairman of hospitality company Minor International in Thailand, said “a more pragmatic approach should be considered” as border entry restrictions may cause more harm than good, particularly when domestic transmission of Omicron has already taken root.

“The resumption of Test and Go or Sandbox programs is preferable,” said Heinecke, in an open letter to the Thai prime minister.

Noting there are optimistic views that the Test and Go program may resume in March, Barnett from C9 Hotelworks said it is unlikely to happen if the infection number remains high. He expects to see more tourists to enter Thailand via the Sandbox program, particularly business travelers, though it is nothing comparable to a broad tourism revival.

The case spike fueled by Omicron has also affected Thailand’s economic outlook, which was once supported by domestic spending and a gradual improvement in foreign tourist figures. In late November, the Bank of Thailand said the Thai economy would grow 3.4 percent in 2022.

In this file photo taken on Nov 1, 2021, tourists walk on a beach on the Thai island of Phuket. (MLADEN ANTONOV / AFP)

But a growing outbreak of Omicron remained a key risk and the country’s economy could see lower growth in the first half of 2022 than a baseline scenario, the Thai central bank said in a statement on Jan 10, according to Reuters.

Similarly, Kirida Bhaopichitr, director of the Economic Intelligence Service at the Thailand Development Research Institute, said she had to lower the forecast for Thailand’s GDP growth this year to 3-3.5 percent from 3.5-4 percent after the latest spike in infections.

Kirida said one of the biggest impacts due to Omicron on the Thai economy this year will be on the tourism sector as the industry was hoping to benefit from the reopening plan this winter, usually a high season for Thailand’s tourism sector.

“Before the Omicron outbreak, we had forecast that Thailand would probably receive around 5 to 15 million international tourists this year,” said Kirida, adding that the industry now expects only 3-4 million foreign visitors in 2022.

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With tourism traditionally contributing around 15 percent to its GDP, Thailand received only 200,000 tourist arrivals in 2021, compared to about 40 million in 2019 before the pandemic.

Kirida said she expects the tourism sector and domestic consumption in Thailand to recover by the middle of 2022, though uncertainties caused by other variants remain.

Noting the government has done relatively well in supporting individuals in the tourism sector by providing subsidies, Kirida said more support should be given to small and medium-sized enterprises. For example, a paycheck protection program, similar to the one in the United States, can be considered to help companies stay in business and require them to maintain employment.