Thailand Tourism Trickles Back to Life

Thailand has begun opening its borders to travelers once again in a bid to jumpstart its pandemic-battered economy. The Southeast Asian country is no longer enforcing quarantine restrictions in select provinces to travelers from some five-dozen low-risk nations, including the United States, China, Japan, much of Europe, Japan, and India, potentially starting a chain reaction for tourism across Asia. Thailand has taken a leap of faith by easing its quarantine requirements given that the pandemic is not yet in the rear-view mirror in the country.

As of early November 2021, Thailand, which is known as the Land of Smiles, has now reopened a handful of provinces, including Bangkok, Phuket, Krabi, and Phang-nga. International travelers from the approved nations can roam across these provinces after producing a negative COVID-19 test. Thailand’s nightlife could return by early December 2021. If Thailand’s approach is successful, other nations in the region could follow in its path.

John Blanco, general manager of Capella Bangkok, is quoted by Fortune as saying that while the luxury hotel doesn’t expect to be sold out right away, “it’s a great first step.” Meanwhile, the Tourism Authority of Thailand forecasts that the country will see more than 1 million tourists through April 2022, averaging 300,000 travelers each month.

Thailand’s health ministry plans to sign off on up to 18 additional provinces by the end of the year, thrusting these regions into the travel-friendly blue zone and making them eligible to welcome tourists once again. In the meantime, foreign travelers who want to visit other parts of the country must first wait for seven days.

The reopening of Thailand’s tourism sector comes on the heels of a test program entitled Phuket Sandbox in which vaccinated travelers who tested negative for the virus could visit the island for a week or two. After that, these tourists were allowed to visit other parts of the country.

One Step Forward, Two Steps Back

Thailand is having to compete for international tourists with jurisdictions such as Australia and the U.K., both of which have similarly relaxed their travel restrictions recently. But it has been one step forward, two steps back for Thailand, whose attempts to reopen its tourism sector have been blighted by renewed waves of the pandemic.

Thai officials are pulling out all the stops and have announced the creation of four special national holidays in 2022 that will add several long weekends, including two in July, one in October, and one in December, to the calendar in an attempt to jumpstart domestic tourism.

Thailand is taking a calculated risk by reopening its tourism sector, one that it cannot afford not to take given the state of its economy. At the same time, however, if the reopening of its borders happens too soon, it could do more harm than good and result in more COVID-19 cases.

And while Thailand is preparing for 150,000 international tourists this year, it is too little, too late for some small businesses. According to social media reports, one such small business, Sunisa’s Coffee and Bistro, which served Western cuisine to its customers and has been a part of the local community for the past four years, is closing its doors in Chiang Mai. According to the owners, it will be years before Thailand’s economy fully recovers and the potential boost in tourism starting in early November won’t be enough.

In 2019, before the pandemic hit, some 40 million travelers made their way to Thailand. That year, Thailand attracted many tourists from China, Japan, South Korea, India, Laos, and Cambodia. China alone was responsible for 11 million foreign travelers in 2019, making it a key source for Thailand tourism. And while China is on Thailand’s approved list for international travelers, that doesn’t mean that tourists will be anxious to go anytime soon.

China is among the countries that will require travelers who have visited Thailand to jump through several hoops before returning to their home country. It may not be until toward the end of 2022 before China lets its citizens freely travel to Thailand. Japan will even ban reentry into the country for travelers coming from Thailand.

Meanwhile, Indonesia, which made it on Thailand’s approved travel list, is looking to strengthen ties between the two countries across tourism and trade activities with the easing of the restrictions. Indonesia made similar moves to reopen its travel sector in October 2021, especially for Bali and Riau, to international travelers from nearly 20 countries.

Thailand’s Economy

Thailand’s economy was already struggling before the pandemic emerged, with the number of households living in poverty conditions on the rise since 2015, as per the World Bank. The tourism sector has historically helped unemployment, but hotel and restaurant jobs do little to increase the skill level of workers or qualify them for higher paying sectors.

Nonetheless, the easing of restrictions couldn’t come too soon for Thailand, whose economy has been battered by waves of the pandemic that persisted for the past 18 months, including infections that erupted this year. Worse, Thailand’s economy is dependent on the tourism sector, leaving officials to scramble to diversify the country’s revenue streams even while combating the health crisis.

In 2018, tourism was responsible for about 20% of Thailand’s GDP, while in 2019, the tourism industry saw $60 billion in revenues, or an average of $1,520 per traveler each visit. A slow vaccine rollout followed by a rising number of COVID-19 cases in 2021 threw a wrench into Thailand’s recovery.

Thailand’s central bank recently lowered its 2021 GDP forecast from 1.8% to just 0.7%. For 2022, Thai officials are calling for the economy to grow at a rate of 3.7%, down from previous forecasts of 3.9%. Thailand Deputy Prime Minister Supattanapong Punmeechaow believes that the worst of the pandemic is behind Thailand. He predicts that the Thai economy could expand between 5% and 6% in 2022, as long as there is not another wave of COVID-19 infections.

Less than half of Thailand’s population has been vaccinated against COVID-19. Thailand officials hope to have nearly three-quarters of Thai citizens vaccinated by year-end 2021. In addition, they plan to keep the manufacturing sector going to buoy exports, which is another one of Thailand’s economic drivers. The country has also paved the way for “high potential” foreigners to come to Thailand amid extended visas and tax perks, all in a bid to stimulate the economy.

Given Thailand’s reliance on tourism, it is no wonder that officials have reopened their borders, but it is unclear if international travelers are ready to take them up on it just yet.

By: Gerelyn Terzo of Sharemoney