Source Eurasia Review
ALBANY, U.S.--With nearly 20 percent of Thailand’s pre-Covid crisis GDP related to tourism, the partial reopening of the country's borders on November 1 to international tourism was a risky move aimed at turning around the economy.
There has been a whole range of guesstimates made by the Tourist Authority of Thailand (TAT) about how many tourists will visit Thailand in 2021 and 2022, that have been optimistically predicted.
The partial opening of borders to visitors from 63 countries, comes at a time when bars, entertainment businesses remain closed across the country, and restaurants in most parts of the country are not allowed to serve liquor with meals.
The supposedly quarantine free entry for fully vaccinated foreign visitors, has been found not to be completely true as visitors are required to stay in isolation up to 30 hours in hotel quarantine, until their Covid test results come through.
Since the relaxation of restrictions on November 1, there have been 30,000 visitors arriving in Thailand. This is negligible compared to the volume in 2019, when nearly 40 million tourists arrived.
The November 1st partial opening of Thailand for international tourists is the third attempt since the end of 2020.
The reopening of Thailand to international tourists is considered a major risk with the relatively low vaccination rate. Only 49.1 percent of the total population was fully vaccinated as at November 8.
A recession causing many extreme hardship
Thailand is a very different country than it was before March 2020. GDP plummeted 6.9 percent in 2020, with an estimated 2 million people thrown into unemployment.
Areas that relied upon tourism like Phuket, Pattaya, Hua Hin, Hat Yai, and Chiang Mai resemble ghost towns in parts, with many businesses closed down permanently.
Covid-19 cases across the country have been gradually declining over the last month to around 7,000 cases per day, with deaths now under 100 per day.
A revival in international tourism may take some time
A return to the pre-Covid tourist numbers is most probably out of the question for a number of years. Like China, many countries are restricting the travel of their nationals for holiday purposes. In addition, there are a number of factors inside Thailand that could hinder a revival of tourism in the foreseeable future.
TAT predictions of between 10-18 million tourists arriving in Thailand during 2022 must be taken with a grain of salt. TAT’s focus on attracting the super wealthy seems to be based on just an idea rather than market research, as are ideas to attract first time tourists, and wealthy Indian tourists.
Traditionally, most tourists coming to Thailand have tended to be price sensitive.
Thailand’s greatest barrier to expanding international tourism is its own bureaucracy.
The relatively high costs of Covid tests at the airport, the extra Baht 500 entry charge into Thailand in 2022 that will be collected from a booth upon arrival, media stories of tourists being assaulted, raped and murdered, dual pricing, and taxi scams are slowly eroding the good reputation of Thailand as a tourist destination.
With the future of international tourism bleak, there is a need to consider alternative strategies to rehabilitate the Thai economy, and create new employment opportunities.
Revitalizing domestic tourism
The government encouraged focus on domestic tourism in 2020, which saw 2.23 million domestic tourists take local holidays during March 2021, before the upsurge in Covid-19 cases in April, after the Songkran holiday period.
While many of the traditional tourist areas have been bypassed, new regions showed they were popular with Thai tourists. These included areas which have developed eco and farm tourism attractions with resort style food and accommodation.
While most ‘red light’ districts have become desolate, border towns like Betong, in the Deep South, have reinvented themselves as weekend getaways for big bike and family groups.
When provincial rules for domestic travel are streamlined and Covid case numbers decrease to acceptable levels, domestic tourism is set to resume beyond March 2021 figures again.
Manufacturing must become the main engine of growth
The bright hope for the Thai economy is manufacturing. Manufacturing, along with the production of agro-based foods have been the major drivers of Thailand’s increase in exports. Thailand’s exports rose 20.71 percent year-on-year to July 2021, where manufacturing played a major role in that figure.
With the Thai Baht weakening 10 percent against the US Dollar over the year, Thai manufactured products are becoming more competitive.
Rayong is an industrial zone set to grow with deep port and international airport access.
Manufacturing made up 25.23 percent of Thailand’s GDP in 2020. Manufacturing is set to become one of Thailand’s main growth engines over the next couple of years.
Agriculture is keeping rural communities buoyant
Although agriculture represents only 8.44 percent of Thailand’s GDP in 2020, it’s been a very important activity to keep many rural communities immune to the financial hardships of the Covid crisis.
With rubber prices improving over the last 12 months, some 1.7 million families have been able to continue as normal collecting latex and selling their produce on a daily basis.
Fruits and market vegetables have also been excellent crops with strong local demand. Agro-based food product exports have risen 24.71 percent year-on-year to July 2021, bringing a boom to producers of crops like durians.
Many ex-tourism workers have turned to farming and finding it lucrative. Market gardeners have devised innovative business models that utilize online sales platforms for home deliveries.
Retraining unemployed for other careers
Many unemployed workers have returned to their home provinces to set up food stalls or other micro-enterprises with varying success. Those in rural areas that are buoyant with agricultural activities are able to make a meagre living.
Some unattractive jobs pre-Covid like caring for the aged have become popular. There are 13 million people aged 60 or above in Thailand today, about 20 percent of the population.
TVET education needs strong promotion among unemployed to assist retraining to fulfil new working roles in society.
Revitalizing the One Tambun One Product (OTOP) programs
There are 2.9 million SMEs in Thailand, employing 9.7 million people, while contributing 37.2 percent to GDP.
It Is time to revitalize the OTOP program framework to cope with the unemployed created through the Covid-19 crisis.
Reopening international tourism is not the silver bullet that will kick-start the floundering Thai economy in the immediate future.