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Damage Done: Phuket’s tourism industry will take years to recover, say experts

Damage Done: Phuket’s tourism industry will take years to recover, say experts

PHUKET: The damage to Phuket’s tourism industry by the COVID-19 prevention measures has already been done, and will take years to recover from, Phuket Chamber of Commerce President Thanusak Phungdet told The Phuket News this week..

By The Phuket News

Saturday 17 October 2020, 09:00AM

Shops remain shuttered throughout Kata, one of the tourism areas on the island devastated by the economic crisis. Photo: Tanyaluk Sakoot

Shops remain shuttered throughout Kata, one of the tourism areas on the island devastated by the economic crisis. Photo: Tanyaluk Sakoot

Worse, if a moratorium on loan repayments for tourism businesses is not extended beyond the end of this month, the damage will deepen, adding even more years to the expected time frame for the industry to recover, he said.

“We have shouted this and shown the extent of the damage done to the industry for months, and yet still nothing has been done,” Mr Thanusak said on Monday (Oct 12).

The procession of high-end officials, including Deputy Prime Minister Jurin Laksanawisit, arriving to see firsthand and report the state of the island’s economy back to Bangkok has also failed to provide relief, he added.

However, Mr Thanusak noted that he had been informed that Prime Minister Prayut Chan-o-cha is expected to visit the island himself in November.

By that time, the number of businesses that will have shuttered permanently will start to increase rapidly, Mr Thanusak said.

At last report, Phuket Governor Narong Woonciew admitted that an estimated 70% of all tourism businesses on the island are already closed “temporarily”. Mr Thanusak expects that number to change dramatically.

“We are on the verge of collapse. We need actual help fast,’ he said.

Mr Thanusak called for the government to extend the moratorium on tourism business loan repayments by at least two to three years, and for the interest rate on such loans to be capped at 2%.

“We did this after the tsunami [in 2004], and it worked. The tourism industry was able to recover within a few years, and by last year was generating some B400 billion for the national economy,” he said.

With no action taken to help support the industry, banks will foreclose on their loans and seize properties, he said, adding that this will only add more years to the time it will take for the industry to recover even if new players enter the market and snap up seized properties sold by the banks to recover their losses.

Also needing urgent attention are smaller tourism operators who have outstanding personal debts that they are unable to repay.

“This group is a big group in the tourism industry, and with no tourists these people have no way to repay their loans,” he said.

Benihana Phuket

“If these people do not receive assistance, they will lose their credit rating, meaning that they will not be able to launch new businesses when the industry does start to recover. That means a loss of many experienced operators in the industry, and that will directly affect Phuket’s ability to relaunch as a competitive tourism destination,” he added.

Bhuritt Maswongssa, who serves as the Southern Thailand representative on the Tourism Council of Thailand (TCT), supported Mr Thanusak’s call for financial support for the island’s tourism industry, and agreed that it already will take the island several years to recover.

“The government must ask for cooperation from the banks to give and guarantee soft loans with 2% interest, and interest-free periods of at least three years, so that there will be more employment and the tourism industry can keep going,” Mr Bhuritt told The Phuket News.

“Without these soft loans, the result will be a chain-reaction collapse in the tourism industry. Not only hotels, but also tour operators, restaurants, souvenir shops, and entertainment venues. So these businesses need help as fast as possible,” he stressed. 

Mr Bhuritt added that he could not foresee the island’s tourism industry recovering on its own until the number of hotels, resorts and other tourist accommodation venues started experiencing about 50% occupancy.

“And that will take at least a few years, even if the businesses start to receive help soon,” he said.

Dr Chayanon Pucharoen, Associate Dean for Research and Graduate Studies at the PSU Phuket Faculty of Hospitality and Tourism, on Monday (Oct 12) told The Phuket News that Phuket was on track for his “worst case scenario” of the COVID-19 crisis costing Phuket more than B127 billion in lost revenues.

Dr Chayanon presented his prediction at a meeting at Phuket Provincial Hall attended by the-then Phuket Governor Phakaphong Tavipatana on Apr 28.

“Our initial research estimated that Phuket could lose up to B127bn in tourism revenues from February to July as a result of the virus outbreak,” Dr Chayanon said at that time.

However, on Monday, he declined to offer a revised version, saying “My prediction has not changed. Nothing has changed for me to revise that estimate.”

Of note, Phuket Governor Narong Woonciew as early as Sept 8 admitted, “The efforts to bring foreigners into Phuket is for the benefit of the nation and for Phuket province. Phuket is getting ‘sick’ now, and the revenue generated from the tourism industry, about B400 billion a year, has all disappeared,” he said.

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maverick | 26 October 2020 - 14:40:30

Nobody knows what next year or the year after will look like it’s all guess work - will international tourism stop completely - unlikely will people still want to come to Asia for holidays - very likely - will Thailand be able to capture as much of this market as in the past - that’s what business has to figure out - market it well and price it correctly and people will come .

BigA | 26 October 2020 - 09:48:56

Ok,the damage is done,nobody needs an expert to tell you this also it will take time to recover this is common sense!Any of those well pay'd  EXPERTS can tell what to do next ? How is the crime rate after all this young people lost there jobs ?

wagsthedog | 19 October 2020 - 14:03:22 because many people will not have worked/furloughed/used up their annual leave. Many countries now are promoting tourism within their own borders to boost the economy of home countries, Thailand?? i think not, Thai people are suffering, i feel so sorry

wagsthedog | 19 October 2020 - 14:00:18

there will be a new normal and it will be vastly different. Tourism in every country is affected. When the vaccine becomes available people will not say "lets go to Phuket/Thailand" they'll want to save some money

Kurt | 19 October 2020 - 08:14:30

....Want to remain a status quo....  Shooting at peaceful demonstrators is not possible anymore. Those times are over. But now obviously use the false arrests instrument. That is a Government unworthy. It will work out counter productive. But they can't contain that with island mind setting thinking.. Not understand that present anti demonstrators doings will not work. Pity.

Kurt | 19 October 2020 - 08:04:02

In General, Thai officialdom is stubborn, not willing to see and understand changes.  They just put their heels in de sand and talk their way around  changes, hoping to make it possible to remain in last century with Thailand for the benefit of the Thai elite class. These not want Thailand more democratic. At all cost they want to remain a status quo.

Wolfgang0815 | 18 October 2020 - 10:47:45

It took iqte a while until people start to understand, that this is not just a break, it is the start of a new economic system. But a big part of them is still trying to keep the old business model alive.
Giving loans to keep the credit rating of small business owners, so that they can restart something new later makes sense, but the phuket we all know is gone.

Kurt | 18 October 2020 - 09:04:07

Yes, it will take years to recover. Do the experts mean to say: 'Recover to Old Normal', or do have they recover suggestions for the 'New Normal'. I don't see Officialdom attempt yet to work out a 'New Normal ' Phuket so far. And, now is the right time to upgrade incinerator capacity  and water supply guaranty during these years. No time for Officials to go in rest mode...

Paulnou | 17 October 2020 - 22:58:28

As a resort operator, from Samui, I went to 5 banks for a soft loan.... Forget it, even one told us staigth thar t was too dangerous to give any to hotels & restaurants!!! Let us sucide... 

drmokie | 17 October 2020 - 21:31:52

Americans who formerly have retired here agree with this article. The current insurance requirements for former Thailand retirees insure people like me cannot return I lived in Thailand from 2015 until 2019. I am too old to get insurance in Thailand, and couldn’t afford it anyway. My retirement give me 100 % hospitalization in the USA and 100% out patient with minimum copay. 

Kurt | 17 October 2020 - 10:37:14

Well, it is clear that the democratic uprise among Thai, pushed down by Government,  taking place now have a anti tourism impact. Plus all the negative regimental travel rules that only gives freedom to VIP's ( that seems to be a immune race of people), and all the time changing rules for future arrivals and confuses foreigners. Hey, they just look out for a carefree holiday destination.


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