‘This is a devastating blow for normal tourism. The only revenues in tourism are in the domestic market, the volume of which is directly linked to the nation’s level of development’
As the world faces the devastating consequences of the Covid-19 pandemic, tourism is among the sectors affected the most severely, specifically in Thailand. A major source of revenue and jobs in Asia, it started to feel the pain early when the Chinese outbound market collapsed almost overnight in late January.
After months of lockdowns, countries are cautiously starting to ease travel restrictions, starting with domestic tourism. Vietnam, praised worldwide for its timely and aggressive response to the virus, was among the first to start encouraging its citizens to travel again.
“Such cases have led to the extension of international travel restrictions and destination lockdowns, which ultimately has hampered the recovery of the sector, leaving jobs and economies under threat,” said Lim Boon Kwee, chief operating officer of the Bangkok-based hospitality chain Dusit International Plc.
“The daily deluge of online information — some factual, some fake — also makes the situation confusing and difficult to analyze.”
Restrictions on travel will depress tourism and hospitality revenue in the short and medium term, he said. “Until international borders reopen, everyone in our sector will be doing our utmost to encourage more domestic trips and also entice more domestic spending.”
Willem Niemeijer, CEO of Bangkok-based Yaana Ventures, said that even before Covid, there were some Thai destinations that clearly appealed more to domestic travelers, among them Bang Saen, Khao Yai and Loei. Others appeal more to international travelers, such as Phuket and Koh Samui. “Naturally the offers in terms of accommodation are adjusted to those tastes and budgets,” he explained.
The impact of the crisis on disposable incomes, he added, further undermines the idea that domestic travel can seriously support the sector, given the huge investments made in past decades.
“This is a devastating blow for normal tourism. The only revenues in tourism are in the domestic market, the volume of which is directly linked to the nation’s level of development,” he told Asia Focus.
The United Nations’ World Tourism Organization (UNWTO) in May released multiple scenarios for this year, saying international tourist arrivals may drop by between 58% and 78% by year-end, depending on when governments reopen borders. That would translate into a loss of 850 million to 1.1 billion international tourists globally, putting between 100 million and 120 million jobs at risk.
As of the end of May, the pandemic had already led to US$320 billion in lost revenues, already three times the cost of the 2008-09 global financial crisis.
According to the latest analysis from the UNWTO, 40% of all destinations worldwide had eased their restrictions as of July 19, up from 22% in mid-June and 3% in mid-May.
However, of the 87 destinations that have eased restrictions, just four have lifted all curbs, while the rest maintain some partial border closures. Forty-one of the 87 destinations are in Europe, and another 20 are small island developing states, for which tourism is the central pillar of the economy. That leaves 115 destinations whose borders remain completely closed to tourists.
Kirida Bhaopichitr, director for international research and advisory service at the Thailand Development Research Institute (TDRI), expects domestic tourism to start recovering in the third quarter of this year.
“It will not fully recover to pre-Covid levels until 2022. The government’s domestic tourism stimulus packages of 22.4 billion baht from July to October 2020 will also help,” Dr Kirida wrote in a report released on July 15.
“International tourism will start to slowly recover end-2020 with a focus on selected business and medical travelers. Foreign tourists who are vaccinated can start to come in 2022,” she said, adding that a full recovery will not be seen until 2023.
Mr Niemeijer of Yaana Ventures said that reactivating cross-border travel is vital to reviving the sector.
“I expect to see more ‘slow’ travel as a result of Covid,” he added. “Tourists will probably be happier to stay at one hotel or resort for the duration of their trip and not move around as much as before. They’ll avoid crowded places more.
“Similarly, this will be a boost for places like Luang Prabang and Siem Reap, who will love to see Thai travelers return.
“[But] as long as borders remain closed and there is no reopening date in which travelers and the industry can have confidence, there can be no recovery.”
Mr Desaulles said setting up “travel bubbles” or green lanes between countries should be accelerated whenever possible.
“Whether the vaccine will be found in the next six, 12 months or longer, cross-border travel will need to start again. It facilitates economic and social benefits for every country.”
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“Until a vaccine is found and ready for mass-market use, countries should also look deploying more rapid-test kits that can show results in a short period of time,” Mr Desaulles said.
At present, guidelines prescribed by the World Health Organization (WHO) are the common safety standard for hotel and tourism operators as a starting point of any hygiene programme.
“As a global company, we are also required to abide by local standards in the markets we operate in,” said Mr Desaulles. “We have in place a set of comprehensive safety and hygiene protocols through a programme called Safe Together. We have also kept the maximum occupancy between 60% and 70% to respect safe distancing and ensuring protocols can be adhered to.
“We have seen all hotel brands up their game on safety and hygiene standards to draw back guests. It is a positive development for the industry as many of these practices will be retained … even after the crisis.”
Mr Lim of Dusit agreed safety is now the top priority for travellers and the businesses that serve them. “Heightened standards of cleaning and sanitation, physical distancing and contactless experience must all be in place to ensure visitors can travel with confidence and stay with peace of mind,” he said.
“We must understand the new demands of travellers in the ‘new normal’. We must recognise they want to go to less crowded destinations, see fewer people, try local experiences, control their own time, and do whatever they want.
“In short, they want flexibility, and we must be ready to deliver this,” he said, noting that activities and services that promote physical and mental well-being will also be essential.
Heath consciousness will shift patterns of tourism during the transition. Air travel, meanwhile, will cost more as there will be fewer flights and carriers will be enforcing distancing measures.
There will be a shift from mass tourism to more independent travellers, mainly domestic tourists, from large hotels to boutique properties, and from long-haul to shorter travel distances.
More opportunities for medical and wellness tourism are emerging in Thailand as it has strengthened its reputation during the pandemic. The Dusit brand, for example, has partnered with a hospital to start a wellness facility in resort town of Hua Hin.
“Regional tourism will increase as international tourists, especially from China, will reduce their travel budgets. Chinese tourists will prefer to travel to countries that do not have anti-Chinese sentiment,” Dr Kirida added.