Even with Phuket Opening it will be a while before Foreign Tourists return

5 Apr 2021

The long-awaited reopening to foreign tourists is set to resume in July. Phuket serves as the pilot site for a tourism sandbox — the first initiative to remove mandatory quarantine requirements.

The Andaman beaches, which was once bustling with tourists, have been deserted for over a year, drawing only a limited number of local guests who prefer a short trip rather than stepping too far from home.

The pandemic reduced Phuket's tourism revenue from 442 billion baht in 2019 to 108 billion baht last year, with 98.8 billion of that total coming from the first two months before the nationwide lockdown.

Local visitors generated only 1.3 billion baht per month for the province from June to December 2020, compared to 32.7 billion from the mostly foreign market in the pre-pandemic period.

Despite having a more concrete plan than previous attempts to reopen to the international market, authorities admit the sandbox is not a panacea as obstacles remain, the most prominent of which is a mass vaccination campaign in Thailand and visitor origin countries.

As occurred in several countries last year, an unpredictable outbreak of the virus could appear at any moment, wiped out the sandbox's carefully constructed plans.

For a country struggling to increase GDP growth to 4% in 2021, the government's target of 348 billion baht in tourism revenue from the international market this year remains a stretch.

 

LONG AND WINDING ROAD

"By June, I pledge to bring 950,000 Covid-19 vaccine doses to Phuket and vaccinate 70% of the local population. The tourism sandbox will not take effect if we fail to meet this target "At a meeting last week, Phiphat Ratchakitprakarn, the tourism, and sports minister told more than 300 hotel operators.

Thailand recently had a conversation with Hong Kong on a travel bubble scheme, Mr. Phiphat said and seeks similar dialogues with other areas. A travel bubble is a bilateral agreement that allows inoculated tourists from the two locations to travel freely without quarantine.

The deal had to be reciprocal, meaning that citizens of both countries take outbound trips and not be restricted by quarantine upon their return home.

While an agreement with low-risk countries such as Taiwan is feasible, analysts believe Thailand could face roadblocks dealing with China, a major trading and investment partner wanting greater regional influence.

The Tourism Authority of Thailand (TAT) governor, Yuthasak Supasorn, said the industry likely will not see a revival until the final quarter, when five more destinations — Krabi, Phangnga, Koh Samui, Pattaya, and Chiang Mai — are added to the sandbox.

As tourists from Asia, a major target of Thai tourism campaigns, may not be ready to take outbound trips, the number of international arrivals to Phuket from July to September may be as low as 100,000
Mr Yuthasak said that European countries may achieve herd immunity by the third quarter, but could disregard the Far East for travel because that period is the summer holiday season in Europe.

"People in Europe there may travel within the region first during the summer when travel restrictions are lifted. When winter approaches, Thailand is the next place on the choice "he said

The Thai government reduced the quarantine period for international arrivals (except those from countries with Covid-19 variants) from 14 to 10 days in April, and for vaccine certificate holders from seven to seven days.

It also introduced the "Area Quarantine" scheme, which allows tourists to check-in designated hotels and then leave the room to use other hotel facilities. However, hoteliers have raised concerns about some restrictions, particularly the prohibition on swimming in the sea, which has caused some markets, such as Russians, to rethink the plans to travel to Thailand in the second quarter.

NO SEA SWIMMING = NO HOPE

Those countries that can vaccinate the majority of their population and achieve herd immunity first, according to Woranate Laprabang, CEO of Thai Vietjet (TVJ), will have the upper hand in cross-border travel negotiations.

"In terms of vaccination progress, Singapore has been outstanding. If the country inoculates 70-80 per cent of the population by August, it can pick which countries it wants to open up to for travel," he said.

Though Thailand will not achieve herd immunity as fast as neighbouring countries, Mr Woranate said that the partial reopening of the Phuket sandbox will help mitigate the impact.

TVJ, like other Thai airlines, is queuing vaccine administration. He said the company will restart international flights to tourist demand When its 740 staff are inoculated.

 

BET ON THE FUTURE

Thailand is expected to attract 3.2 million foreign visitors this year, generating 320 billion baht in revenue, according to the NESDC. By the fourth quarter, foreign visitors will be allowed to visit Thailand, according to the prediction.

Tourism recovery is largely dependent on three factors, according to Kattiya Indaravijaya, chief executive of Kasikornbank (KBank): the government's reopening policy, the policies of tourist origin countries toward international travel, and vaccination progress.

"The vaccine passport is an important tool to help Thai tourism recover, but the implementation of such a scheme takes time, depending on the speed of vaccine rollouts globally, vaccine effectiveness, and Thailand's procedures in accommodating international visitors," she said.

According to KBank, the country's tourism recovery takes place in three phases. Domestic travel drivers the first phase, which operates through 2021 to 2022, while short-haul travel within the region, primarily for business, drivers the second phase.

"Thai tourism will take more than three years to recover. In 2024, the finance sector is expected to generate 2.7 trillion baht, almost close to the pre-pandemic level of 3 trillion in 2019 "Ms. Kattiya said.