Phuket still to reopen by July 1st but key economic agency predicts a 99% wipeout in tourist arrivals
Thailand’s goal of developing its domestic tourism market is only helped by its foreign tourism industry and is ultimately dependent on overall economic development and broader access to wealth among the wider population, not on tourism agencies or marketing drives. Chinese tourists will be absent from Thailand in 2021 as the communist government in Beijing has prioritised its own closed internal tourism market by deploying authoritarian command and control techniques. Indeed, similar measures have also been deployed in Europe, the United Kingdom, Australia and to a lesser extent the United States. It is, unfortunately for Thailand, an outcome that is ruinous for international tourism.
Thailand is making progress towards the reopening of foreign tourism to the kingdom without quarantine in Phuket on July 1st despite the ongoing struggle to effectively combat the third virus wave being fought nationwide and particularly in the inner city of the capital, Bangkok. This will be followed by a widening of destinations for foreign tourists including Bangkok itself on October 1st provided the current vaccination drive enjoys the same success as is currently being seen in Phuket. Despite that optimistic outlook, however, and in the midst of stubbornly high infection numbers and deaths, one of the country’s top economic agencies is only predicting foreign tourist numbers at 1.25% of the level seen before the pandemic, in effect, a 98.75% wipeout.
The National Economic and Social Development Council, this week, reduced the projected number of foreign tourist arrivals to Thailand in 2021 down to 500,000 people or 1.25% of the number the country recorded during the record year for the tourism industry in 2019.
The figure is 7.7% of what was seen last year and is still dependent on the kingdom opening up to foreign tourists in a government plan that is underway and progressing well despite the deadly emergency created by the third virus wave.
Foreign tourist entering with a 14-day quarantine rule and at a rate of less than 1% of 2019 levels
Currently, foreign tourists are still entering Thailand but at less than 1% of the level seen in 2019 with proof of vaccination or a negative test required and subject to a strict 14-day quarantine rule which was reintroduced by the Centre for Covid-19 Situation Administration (CCSA) from May 6th given the increased threat faced by the country from the huge third wave of infection which seen record numbers of Thais die from the disease.
Fears of the Indian virus variant has led to passengers from four countries being prohibited from entry
In addition, Thailand is currently prohibiting visitors from India, Bangladesh, Nepal and Pakistan since May 10th from entering the country until further notice.
This was achieved by the cancellation of all Certificates of Entry through the Ministry of Foreign Affairs for visitors from these countries due to fears of the Indian B.1.617.1 virus strain which has already been detected in Bangkok.
Vaccine rollout in Phuket working well with 14,000 doses a day being administered and over 50% of all adults already having received one dose
At the same time, work is proceeding on the vaccination rollout in Phuket where over 25% of the population is now vaccinated with an intensive campaign currently administering up to 14,000 doses a day to the adult population of the island of 466,587 people.
Over 52% of adults on the island province have already received their first dose which is cause for optimism that the June target of achieving 70% herd immunity will be achieved.
Stringent controls on entry to Phuket to protect the security of the proposed new haven from the virus
At the same time, authorities on the holiday island in the Andaman Sea have put in place stringent requirements to control the environment and to reduce infection rates within Phuket making it safe for vaccinated foreign tourists and the vaccinated population.
It is understood the measures being adopted have resulted in queues on land crossings onto the island causing some level of complaint from Thai visitors and locals still depending on the scarce domestic tourist trade.
TAT Governor urges sensitivity to local opinion
This week, Yuthasak Supasorn, the Director-general of the Tourism Authority of Thailand defended the measures but acknowledged the need for officials to be sensitive to local opinion on the ground.
‘Facing hesitation from residents is unavoidable when reopening some areas to international arrivals,’ he said in an interview with the Bangkok Post. ‘We have to consider the risk as well as the sentiment of Thai tourists.’
Re-opening of Phuket on July 1st will be a milestone in Thailand’s journey to overcome and exit from this pandemic emergency and recover economically
The reopening of Phuket will be a milestone in Thailand’s recovery from this pandemic and authorities are hoping it will become a turning point for the country’s overall fightback against the pandemic which has severely damaged the country’s economy.
Currently, Thailand is reporting record levels of infection and deaths but the underlying figures, apart from the severe outbreak in the prison system, are showing a steady holding pattern even as 35 clusters of infection are reported in Bangkok.
However, authorities are still far from complacent.
Officials fear the virus spreading into the workplace and factories in key manufacturing provinces surrounding Bangkok and also the ramifications of the Indian strain of the virus being detected in Bangkok during the week at a building site in the Laksi district of the city.
9 other key foreign tourist hot spots including Bangkok scheduled to reopen from October 1st
If the July 1st reopening of Phuket to foreign tourists with vaccination and without quarantine goes ahead and is a success then the government is targeting 9 other key areas which accounted as the destinations for the vast majority of foreign tourists seen in the kingdom in 2019 or 75% of the ฿2 trillion in income generated.
These areas are Bangkok, Buriram, Chiang Mai, Chonburi, Krabi, Phang-nga, Phetchaburi, Prachuap Khiri Khan and Surat Thani.
Government spokeswoman said on May 13th it was targeting 9% of the numbers seen in 2019
On May 13th, the government, through Deputy spokesperson, Trisulee Traisanakul, outlined this programme and, at that time, suggested that 3.5 million visitors were expected in Thailand during 2021 spending up to ฿300 billion or ฿85,714 per visitor or $2,764. This compares to an average of ฿50,000 spent by each visitor in 2019 or $1,613.
The figure quoted this week by the National Economic and Social Development Council (NESDC) was ฿150 billion based on 500,000 visitors or an average of ฿300,000 per visitor or $9,677.
Chinese not among the numbers for 2021 as the communist country creates its own tourism options
Absent from the visitors expected before the end of 2021 will be Chinese tourists as the communist country, which in 2019 supplied 25% or 10 million of the country’s 40 million visitors, has put an effective ban on outgoing holiday tours and has also, swingeingly, scaled back flights out of mainland China.
The deployment of Communist-style command and control techniques is increasingly in evidence under the present Chinese leadership and of course, easily justified during the pandemic crisis as indeed similar measures have also been deployed in western countries including Europe, Australia and the United Kingdom.
The outcome is ruinous for international tourism which, in a similar way to free trade, undeniably fosters better world understanding and relationships, the restoration of which should be a key priority after the health threat has been lifted.
Unfortunately, the pandemic has also put widespread international tourism under the spotlight as a political issue with questions being raised on the sustainability, in particular, of long haul flights.
Plan to reopen Phuket to foreign tourists on July 1st appears promising but the UK taxman wants a cut
The popular Conservative government in the United Kingdom recently raised the tax level on long haul flights including those to Thailand for this very reason.
Flights to Thailand scaled back by 99% from China as internal mainland flights rise above 2019 levels
Flight traffic to Thailand has been scaled back by Chinese authorities by over 99% at this time with no sign that the country’s policy is going to change in the immediate future.
Remarkably, China is reporting a boost in internal flights and domestic tourism activity well above 2019 levels as the government there has reportedly developed a closed internal tourism model by developing its resorts such as Hainan and areas in Xinjiang and Yunnan to offer its population of 1.4 billion a range of holiday options while, at the same time, tightening entry regulations to the country as a protection against Covid-19 for the country from where the pandemic originated in 2019.
All Chinese travellers entering the mainland including travellers from Hong Kong are now required to submit to a full 28 day quarantine period.
Outlook for the Chinese market is not good
The outlook for the Chinese market was addressed, this week, by the President of the Association of Thai Travel Agents, Sisdivachr Cheewarattanaporn.
‘We do not expect the Chinese government to relax international travel in the near future,’ Mr Sisdivachr explained. ‘Look at Hong Kong, which is close to the mainland and has handled the virus crisis better than us, yet Chinese people still have to quarantine when returning from Hong Kong.’
Thailand will be depending more on western visitors in 2021 especially from the United Kingdom, Germany and Scandinavian countries says minister
Minister of Tourism and Sports, Phiphat Ratchakitprakarn, says that Thailand is expecting most of its foreign tourists in 2021 to come from western countries, in particular the United Kingdom, Germany and Scandinavia.
There is a strong cohort of regular tourists and visitors to the kingdom in these countries as well as visitors from the United States and Australia. This depends, of course, in most cases, on outbound travel restrictions from those countries being relaxed by the end of the year or the fourth quarter.
Tourism industry boss again talks of rebalancing foreign and domestic tourism as a key goal
As the country gets ready to reopen to foreign tourists, the Tourism Authority of Thailand boss, Yuthasak Supasorn, has again suggested that Thailand will aim to balance its dependence on foreign tourism in 2022.
He points to 12 to 13 million Thai nationals who regularly travel out of Thailand on holidays as evidence that the country’s population can sustain a stronger domestic tourism market.
However, last year’s absence of foreign tourists in the country coincided also with a collapse of domestic tourism which, for instance in Phuket, saw 80% of the hotels on the island close up and overall occupancy in what was left reduced to 20 to 30%.
The same pattern was seen elsewhere.
No easy job to win back foreign tourists says Governor Yuthasak who highlighted scams targeted at visitors and a lack of public transport as drawbacks
The tourism chief also accepted that it will be difficult for Thailand to win back its foreign tourism market and has pointed to deficiencies in the public transport network and the culture of scams as two impediments that must be addressed.
‘In the end, no matter the market, if the country cannot improve the supply of tourists by improving public transport and reducing the number of travel scams, it will be hard to win back tourists like in the past,’ he admitted.
Aim in 2022 is for 48% of income to come from domestic sources with 26 million foreign tourists
He indicated that Thailand was aiming for a better balance between foreign tourism and domestic tourism in 2022 with a projected income of ฿1.2 billion from domestic tourism, up on the figure achieved in 2019 and ฿1.3 billion from foreign tourism.
At 2019 expenditure levels, this would equate to 26 million arrivals which is ahead of most projections which suggest that Thailand will be lucky to achieve half the level seen in 2019.
‘The structure of Thai tourism has leaned towards the international market for too long, and this has proved difficult to change,’ Mr Yuthasak points out.
Domestic tourism growth is more linked to overall economic development than marketing efforts
Developing Thailand’s tourism economy is in fact, as we have seen, assisted by foreign tourism but depends far more on overall economic development not the marketing efforts of a tourism agency or the many organisations throughout Thailand dedicated to such pursuits.
As Thailand has discovered in 2020 and 2021, there is such a thing as flogging a dead horse to go further than it can otherwise go.
Even giving away money and vouchers for free stays and free flights to boost domestic tourism activity had very limited success.
It did result, however, in several high profile fraud investigations pursued by the Royal Thai Police.
Police chief reveals massive fraud on We Travel Together scheme centred on a small Chaiyaphum resort
The main driver of Thailand’s domestic tourism industry, the same as everywhere in the world, must be economic development itself.
Western countries have a higher GDP per capita while some Asian countries are also far ahead of Thailand
Western countries have a higher GDP per capita than Thailand and this directly affects the kingdom’s ability to generate income from tourism both locally and from foreign sources.
In 2019, Thai visitors spent ฿1 trillion within the domestic tourism industry. That’s equivalent to ฿15,000 per head of population. Taking the Thai GDP per capita at $7,806 or ฿241,986, that’s a generous 6.2%.
Taking the average spend per foreign tourist in 2019 and comparing, for instance to the UK’s GDP per capita of $42,330 or ฿1,312,230, the average ฿50,000 expenditure by a foreign tourist comes to 3.8% per capita on each visit.
Asian countries like Taiwan with a GDP per capita of $32,130 or Singapore with a whopping $65,233, Hong Kong $48,713 or Japan at $40,246 indicate how far off, in economic development terms, Thailand still is.
Economic development and a free market
In essence, the goal of developing Thailand’s domestic tourism economy is, to a far greater extent, linked to the development of the overall economy in the kingdom and the raising of income levels broadly across the population than it is to any marketing effort pursued by government agencies.
That is, of course, subject to a free travel market with the absence of government interference or control in this area, something most people hope to see a return of in 2022.