Tourism revival in doubt again

Most of Thailand’s famous holiday destinations were nearly empty last week during the long Songkran holiday. The latest Covid-19 wave — with daily infections climbing all week and hitting a record 1,582 on Friday — scared tourists away from popular beach resorts close to Bangkok such as Pattaya, Cha-am and Hua Hin, which has also become a coronavirus hotspot following a superspreader event at a local pub.

Chiang Mai, which is celebrating its 725th anniversary, has also experienced a sharp drop in arrivals as new Covid infections pass 200 a day. Authorities have expressed grave concern in the northern province, which ranks second after Bangkok since the new outbreak erupted early this month.

The government jumped on the source of the new outbreaks — bars, clubs and entertainment venues — and promptly shut them down for at least two weeks. Those closures will be extended at least through the end of the month under measures announced on Friday, which also included school closures and a ban on alcohol sales in restaurants.

Businesses are also taking action to help curb the further spread of the virus, now mostly the highly contagious B117 strain. Banks have cut back their operating hours, and shopping malls nationwide are closing at 9 pm, an hour earlier than usual, until further notice.

The Tourism Authority of Thailand (TAT) estimated that the Covid resurgence could cut tourist spending during Songkran by around 2.4 billion baht, as many travellers cancelled their trips and accommodation bookings.

Kasikorn Research Center forecasts a decline of at least 130 billion baht in tourism revenue in the first half of this year due to the new outbreak and the second wave that emerged in late December.

Tourism contributed roughly 20% of Thailand’s gross domestic product in 2019, when the country welcomed almost 40 million foreign tourists. That number plunged to 6.7 million last year, almost all of them in the first three months.

Globally, countries experienced declines of 35% to 48% in tourism expenditure last year compared with 2019. Tourist arrivals in Asia Pacific economies declined by 84% in 2020, steeper than the 74% contraction globally, according to the World Tourism Organization. Most countries across the region have strict controls on international tourism to stem imported cases, and the restrictions were tightened in recent months.

Despite the region’s relative success in containing the coronavirus, a recent spike in cases in countries such as India, which has now surpassed Brazil for the world’s second-most Covid cases, international travel has remained essentially on hold.

Cambodia, where cases have been surging since February when an outbreak was first detected among the Chinese expatriate community, last week extended the curfew in Phnom Penh. Malaysia last Monday extended its so-called movement control orders as new cases continued to climb, reaching 2,148 on Friday — the 20th straight day of four-digit increases.

To revitalise its hobbled tourism industry, the Thai government has come up with an ambitious model to resume quarantine-free travel for vaccinated visitors from selected cities and countries to Phuket starting on July 1. The southern island once relied on 10 million annual foreign guests to drive its economy, and has been one of the country’s hardest hit provinces as a result.

Tourism and Sports Minister Phiphat Ratchakitprakarn also said two weeks ago that he would discuss a travel bubble with Singapore that could also bring in Australians travelling via the city-state. The Phuket Hotels Association, which represents 80 properties, confirmed that discussions were continuing about designating the island as a bubble destination.

But the resurgence of Covid cases threatens the plan to reopen Phuket to the world. The government must seriously rethink it if it cannot flatten the current third wave of infections.

And unless the government can effectively isolate Phuket from the rest of Thailand, welcoming tourists from all over the world can put the whole country at greater risks of further spread of the new outbreak.

Recovery hinges on containment and vaccination. The focus now should be on domestic travellers, particularly to low-risk and emerging destinations. Reinventing the tourism industry will involve industry professionals working with industry groups and government, as well as local administrations, travel agencies, hotels and airlines.

A return to international tourism should be done cautiously and slowly by making sure first that the spread is under control. Thailand can now accelerate the industry’s recovery by capturing emerging growth opportunities domestically as they gradually rebuild international travellers’ confidence.

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