BRITISH INTERNATIONAL SCHOOL, PHUKET
BRITISH INTERNATIONAL SCHOOL, PHUKET
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Phuket tourism economy expert warns plunging incomes may soon fall under poverty line

Phuket tourism economy expert warns plunging incomes may soon fall under poverty line

PHUKET: A leading Phuket tourism economy expert has warned that plunging incomes from tourism in the coming months could easily see Phuket’s tourism income per capita pushed below the provincial poverty line.

COVID-19Coronaviruseconomics
By Chutharat Plerin

Saturday 13 February 2021, 09:00AM


Assistant Professor Dr Chayanon Phucharoen, Associate Dean for Research and Graduate Studies, Faculty of Hospitality and Tourism, Prince of Songkla University (PSU) Phuket campus, revealed to The Phuket News this week that the dire forewarning was based on the inception report by the university.

The report had determined that the forecasted “tourism revenue per capita” from tourists in the coming six months averaged about B3,711 per month, even with the multiplier effect – the amount the same money generates as income for other people as it passes through the economy.

Meanwhile, the 2019 poverty line of Phuket stands at an income of just B3,068 per month, Dr Chayanon said.

“In our simulation, the main variable was the number of Thai tourists. Our simulations compared the current situation with after the lockdown was lifted the first time [April 2020],” Dr Chayanon said.

“After the first lockdown was lifted there were about 2,000-3,000 people [domestic tourists] coming to Phuket each day, and that increased to 5,000-7,000 per day from September through November.

“We used those numbers to simulate the scenario after this latest lockdown was lifted [following the Samut Sakhon outbreak]. We found that the direct tourism income per registered capita in Phuket even in the best case scenario was about B1,963, which resulted in total tourism income per registered capita of B3,711 [presuming that all of the direct income circulated within the province only],” he said.

“However, if the number of tourists coming within the next six months is lower than the number after the first lockdown was lifted, this will be a difficult situation,” Dr Chayanon warned.

In that case, “Even applying the ‘tourism multiplier’, the income is probably not over B3,000. Officials already knew this information, and they are trying hard to boost tourism,” he said.

HEAVY IMPACT

Dr Chayanon pointed out the severe damage the COVID-19 pandemic had inflicted on Phuket’s economy. 

“Through a simple fact check with statistics from the Ministry of Tourism and Sports, before the pandemic Phuket generated about B440 billion for the country each year, but only generated B108.46bn last year,” he said.

However, about 91% of the income generated last year was realised from January to March, before the COVID-19 pandemic took significant hold. The rest of the year generated the remaining 9%, he explained.

“For example, B1.58bn was generated in December [2020], which was less than 3% of the B56bn generated in the same month the year before [2019],” Dr Chayanon noted.

“This is an inevitable fact: that Phuket’s economy is a purely tourism-led growth economy, so we have low flexibility for this economic shock,” he said plainly.

Dr Chayanon pointed out that the impact on Phuket spread beyond the island’s borders. “Everything has a chain effect. This disruption in tourism revenue does not stop in Phuket, it spreads out to other provinces. From our statistics, we found that every B100 spent in Phuket contributes about B189 to the national economy,” he said.

The tourism industry specifically has an intensive ‘backward linkage’, he noted. For example, hotels and restaurants significantly purchase their raw materials from the agriculture industry. From Feb-Jul every year, the revenue of the agriculture industry derived from Phuket tourism is approximately B10bn. “However, this value for this year is estimated as merely B400mn. When there is damage to this part [tourism], it also affects other parts [of the economy],” he said. Besides, tourism industries in our province is a relatively labour intensive industry, a disruption in the tourism industry would create massive unemployment.

IMMEDIATE FOCUS

“As a short-term solution, we all have to cooperate together to attract domestic tourists to the island, in order to keep our businesses and provincial economy going,” Dr Chayanon urged.

The time for action is now, he said: “because Thai people love to travel to coastal destinations from February to April.”

“We have to promote our unique features to attract people to come, especially the beaches, which are almost indigenous as when Phuket firstly appeared on the tourism map 30 years ago. Through natural rehabilitation over a year, we will become one of the impressive destinations among Thai tourists,” he added.

“At the same time, we also have to help those people who do not have any income. In the first outbreak, we did a very good job on helping local people, such as providing essential goods.

“I would say that this current situation is worse than the first outbreak because people have already spent nearly all of their savings. The ‘Tu Pan Suk’ sharing cabinets project is needed more than the first time, while reducing expenses in each household is also necessary,” he said.

DOWN THE ROAD

As a medium-term solution, Dr Chayanon urged the focus to be on the finding of concrete solutions for allowing international tourists to return to the island.

“We cannot stay still, we have to find a way to reopen and welcome foreign tourists. While finding a way to do this, we need to provide good services to domestic tourists in order to keep our businesses operating. Not only to save our province, but the whole country. If those tourism business operators cannot survive this storm, some competitiveness features [e.g authentic sightseeing, neighborhood nightlife] of Phuket tourism might be at risk.

“We have to find solutions. We have to find a way back to generating cashflow, rather than waiting without hope,” he said.

Dr Chayanon also warned that now is the time to look towards long-term solutions to protecting the island’s economy from future “economic shock”.

“This economic shock, or disruption, reminds and teaches us to look for new economic engines for Phuket, so that our economic structure can be more resilient and more agile to protect against further disruption or external shock,” he said.

“COVID-19 is not going to be the last shock. Private organisations in Phuket developed our ‘GEMMSST’ businesses,” he added.

The ‘GEMMSST’ policy is the government and private industry push to develop Phuket in the fields of Gastronomy, Education, Medical & Wellness, Marina Hub, Sports & Events, Smart City and Tuna  in order to become “hubs” for those industries.

“This kind of economic crisis is unprecedented in Phuket,” Dr Chayanon said.

“A good lesson learned from this pandemic is that we have to think of collective interest rather than self-interest. For example, if I am sick, I have to call off going to the party, as I can become a creator of a new cluster. If I still go to the party, it will affect my friends and the whole provincial economy,” he noted.

“I believe in the attractiveness of Phuket from a tourist’s perspective, as we are gifted with natural resources as we call Phuket the ‘Pearl of the Andaman’,” he said.

“I also believe in the professional skills and hospitality of our service staff across tourism businesses, and I believe in the experience of our provincial health authority in disease control measures. “We have knowledge and statistics about how the disease spreads, particularly on our island, which has already been published in respected international medical journals [See Eclinicalmedicine by The Lancet, Oct 2020],” Dr Chayanon noted.

“I think we can pass through this COVID-19 crisis based on our provincial proprietary hospitality spirit and aforementioned resources,” he said.

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skip | 17 February 2021 - 16:22:43

graciously ivor cummins has taken the official 12 month infection and death stats for sweden and put them into graphs showing what main stream media dont want the general population to know. if you rely on searching mainstream media you will read the narrative they want you to read. the truth is not divulged, it is diligently searched for.

Christy Sweet | 17 February 2021 - 13:47:21

It's great to support businesses, but Thailand's infamous underground economy which has flourished under a culture of corruption,  is being ignored. Hand out cash to everyone to stay home. This country has the money to do so easily. 

Christy Sweet | 17 February 2021 - 13:33:37

A  google search will show the Swedish authorities backtracking and apologizing for their inadequate response. One thing this SARS pandemic has exposed is capitalism's cruel attitude money is more important than life and people will spew all manner of lies to support it. The variants emerging are going to set the entire process back 6 months. Wear a mask on essential outings and stay home. 

Christy Sweet | 17 February 2021 - 13:24:25

 QAnon misinformation brigade gone wild on TPN with outrageous claims- "defending child rape" Lol. Perhaps defending young women's rights to have sex with whom they wish when young men the same exact age are left to do as they please is considered "defending child rape" in the usually sexist Q psyche. 

skip | 17 February 2021 - 03:11:54

the only way out of this fiasco is infection by exposure by opening up ALL borders and lifting ALL restrictions. nature has proved this in ALL previous pandemics. there is trillions to be made from vaccines that wont give herd immunity so expect resistance from big pharma, bill gates and tony fauci using total media control to fill their pockets. the sheeple have succumbed to media fear propaganda

skip | 17 February 2021 - 03:04:51

a CDC press release from 2020 stated that of the covid deaths reported in the US were incorrect. 94% of the deaths reported were from pre existing multiple co morbidities ( many terminal ). US public hospitals get $13k for a positive test result and another $29k for an intubated patient. diagnosing on symptoms alone was common. info from US gov web sites. you wont see this on tv.

Tbird | 16 February 2021 - 01:30:28

skip, Yes. You are quite correct in your informed assessment. Christy Sweet only bolsters your argument with her personal attacks (she is incapable of constructing an argument with facts and logic), but don't mind her: I have seen her defend child rape on this forum.

skip | 15 February 2021 - 16:22:28

lalala, yes agreed, thankyou. i am labelled conspiracy theorist by many for pointing out press releases from the WHO and CDC which are withheld by the various media. the people pointing the finger at me are labelled complicity theorists, look it up in the dictionary. united we stand and divided we concede to PCR covid tests which do not test for covid 19 which is a scientific fact. 

LALALA | 15 February 2021 - 13:19:14

You are right skip, the problem is that most people are stupid, full of fear and already brainwashed by mainstream media.

Christy Sweet | 15 February 2021 - 12:52:48

What's needed is a new term for Q-Anon BS spreaders.. QPublicans, Qewpie-dolls, Qwackers.. So many possibilities. 

skip | 14 February 2021 - 23:51:44

this is only going to end when one country like sweden stands up and says NO to the tyrany being enforced on us by the WHO  and the CDC. let the public freely interact until herd immunity is achieved just like all previous pandemics. let nature run its course. then get on with life and enjoy freedom. the current cure is doing more damage than the virus !!

skip | 14 February 2021 - 23:41:22

CDC press release says 80% of the positive cases wore masks and 20% never wore masks. WHO press release says the safe maximum level of CO 2 is 2000 ppm. they also say wearing a mask lifts the CO 2 to between 6000 and 8000 PPM. OHS says we cannot work in an environment above 2000 ppm. you wont see this on TV. censorship by omission. please think for yourself and make your own informed decision. 

skip | 14 February 2021 - 23:29:07

the illuminati want the self employed to be unemployed and dependent on welfare so they can enforce vaccinations and covid obedience. dont obey..dont get fed. no vaccine ..no travel. no mask...no interacting. no covid app..no entry. not obey..get fined. test positive.. get quarantined. 1984 has arrived. control the media and food and you control the world. the formula for all past dictatorships.

Kurt | 14 February 2021 - 13:21:01

..Natural resources are illegally destroyed/removed under the 'closed eyes' of Phuket officialdom. Profit making of wood cut, illegal forest clearing for illegal constructions, etc. The Pearl of Andaman has disappeared under concrete and environment pollution. Look around the incapacitated incinerators. Full blown for ever land- and groundwater polluted.

Kurt | 14 February 2021 - 13:10:13

Dr Chayanon draws a good picture of the present, although his 6 months period outlook should be a period of coming 2-3 years instead. Unfortunately he remains in conservative  'tourist pipeline thinking'. Step out of that tourist beggar position of being depend on to have food on the table of Thai on Phuket.
Phuket WAS the Pearl of the Andaman, but is it not any longer. Natural recourses ...

Kurt | 14 February 2021 - 11:27:11

... and future virus vaccines. Create jobs on Phuket with setting up environmental clean industries, not depend on tourism. Semi conductor, Vaccine labs + producing facilities, fashion designing + production. So much more to keep Phuket proudly up. Thai should make themselves independent from the foreign tourist wallet. That is just a beggar position future wise.

Kurt | 13 February 2021 - 14:02:47

The Thai 'experts' know everything so very well, with the figures on paper. They must know that past Normal not returns. What vision/doings they deploy for the NEW future Normal on Phuket so far, beside tiger paper work? Why refuse to see that the Old Normal not come back at Phuket? Complete backwarded. Build a semi conductor factory, a Vaccine lab/factory, for present and future virus vac...

Galong | 13 February 2021 - 10:38:50

The ‘backward linkage’ could be grossly underestimated.  A LOT of people who depend on tourism directly and indirectly don't report their income. 

 

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