Thailand concentrates on international tourism, but really needs domestic

26 May 2021

The damage from losing international tourism has revealed a major weakness in Thailand's overall tourism strategy, with Covid-19 closing borders for more than a year. The disproportionate dependence on foreign tourists and lack of attention to domestic tourism has ravaged the industry and the national economy, with tourism contributing to up to 18 per cent of the country's GDP.
Thailand had a booming international tourist market, with up to 40 million travellers arriving each year and spending trillions of baht. But, many fear now that it was to the detriment of a  healthy domestic tourism market. While tourism contributed 14.2 per cent to 18.2 per cent of GDP each year, domestic travellers made up only 5.3 per cent to 6.39 per cent of the total, while international tourism generally made up 11 per cent or more.
Due to Covid-19, once lively resort towns and tourism hubs are ghost towns, with 80 per cent to 90 per cent of hotels, hotels, bars, walking streets, and other tourist-related businesses shuttered. The National Economic and Social Development Council downgraded their travel estimate to only 500,000 foreign visitors or less than 2% of Thailand's figures. They are forecast to bring in 150 billion baht, a fraction of the 480 billion baht in domestic tourism last year.
Thailand has spent the last four months falling all over itself trying to get a cohesive international reopening plan while failing to vaccinate enough of the local people in time to reopen safely by July 1. Other countries have recognized the pros and cons of closed borders and focused much more intently on growing sustainable domestic tourism. Thais take an average of three domestic trips a year, compared to five in Taiwan, while countries like Taiwan with more attention to domestic travel average 5.
 
Thailand could take from China, which has embraced its closed border by creating unique incentives to get people to travel and spend. People have been encouraged to travel around the country to collect and spend their money on tech-savvy innovations like localized digital vouchers and the distribution of stimulus money only available from ATMs in locations targeted for tourism growth. Model cities that emulate foreign tourist attractions, as well as luxury tourism draw like making Hainan Island a high-end duty-free shopping destination, are drawing crowds.
 
But, instead of catering to a captive domestic tourism market, Thailand is laser-focused on getting those big foreign spenders over the border, missing opportunities, and overlooking growing problems. Vaccination has been delayed, and locals will not be inoculated yet, let alone achieving herd immunity in Thailand’s tourism sandbox destinations. And there's no guarantee that when the international tourism tap is turned on, it will result in a flood-out of travellers and not a trickle.
Locals may consider incoming tourists, and domestic travellers may avoid destinations that open the border further damaging the tourism economy. Thai people with means may also opt for international travel themselves, abandoning Thai destinations. Many domestic travellers already express frustration restrictions at provincial entry points for Covid-19 safety and also the general inconvenience and extra expenses of Covid-19 testing and pandemic travel.
For years, Thailand's international tourist influx has accounted for two-thirds of the tourism sector, with domestic tourists often neglected, digging a hole that the country is still struggling to address now that the pandemic has made it vital. With no guarantee of international tourism roaring return to pre-pandemic levels, Thailand's Tourism Authority is aiming for 1.2 trillion baht in domestic travel by 2022, nearly matching the 1.3 trillion baht target for international tourism. But is it too little too late to try to focus their tourism efforts fast enough to recover? Has that ship already sailed while planes aren't flying?