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Phuket tourism suffering under slew of crises

Phuket tourism suffering under slew of crises

PHUKET: Phuket’s tourism industry is unlikely to achieve the Tourism Authority of Thailand (TAT) target of 10 million visitors by year’s end as it struggles to move forward while coping with delays in reopening the country to tourism under COVID, fallout from the Russia-Ukraine conflict and long-term problems that were “inevitable”.

tourismeconomicsCOVID-19CoronavirusRussianUkraine
By The Phuket News

Tuesday 15 March 2022, 04:09PM


Tourists on Patong Beach, which has yet to see visitors return in large numbers. Photo: Eakkapop Thongtub

Tourists on Patong Beach, which has yet to see visitors return in large numbers. Photo: Eakkapop Thongtub

Bill Barnett, Managing Director of hospitality consultancy C9 Hotelworks, delivered the news via an interview broadcast by state news agency NBT World last week, following the Thailand Tourism Forum 2022, held earlier this month.

“We have learned from the past two years. We have learned from the Phuket Sandbox. We have learned from how the public and private sectors can work together. I have been in Thailand for 20 years and it’s the first time I have seen that level of cooperation,” Mr Barnett noted.

“What we have also seen is that we need to see the communities engage. That’s really important because going through this pandemic there has been no roadmap, and having the community feel safe to have tourists come back and also be able to work. They are the ones providing the workforce in the hotels, so you are going to have partnerships everywhere, and you have to work with your own neighbours. That’s very important,” he added.

Mr Barnett gave a double-edged appraisal of the island’s tourism sector, which has been battered by meagre tourism figures during the past two years.

“Thailand has great infrastructure for the service economy. They are skilled, they have experience, they have capacity ‒ but something they don’t have, especially in terms of the past few years, is that they lack leadership and innovation,” he said.

“That is something Bill Heinecke [CEO of Minor Group] mentioned at the conference [TTF 2022] as well. There has to be that edge with innovation. Business is changing.”

“What happened during the pandemic was a trend that was going to happen anyway. The rising cost of labour, the lack of skilled labour for hospitality and [the lack of] innovative style of operating hotels as you would see in the West,” Mr Barnett noted.

“We have to be leaner and meaner with the approach to hospitality. We can no longer just throw endless people at it anymore. We have to make careers in hospitality and train people better and innovate our systems as well.

“Sustainable growth, not just double-digit growth every year and posting new numbers every year ‒ and that comes down to planning,” Mr Barnett explained.

“That comes down to having a master plan. Too often when we are looking at the P’s we are talking about promotion, not master planning, and that’s something still lacking in the government very much.

“I come from Phuket and Phuket doesn’t really have a tourism master plan. We know how to promote, but we don’t know what is going to happen in the next five to 10 years,” he pointed out.

“I think more important is the government’s ability to mobilise infrastructure projects for tourism going forward and to invest in these projects. You can’t just take from tourism and say we want more tourists, we want to have more, more, more… without re-investing.

“There has to be investment, not only on the eastern seaboard, but other sectors as well. The government has to invest back into its tourism industry to regain and stabilise it,” he said.

Phuket Sandbox is no longer a model to recapture tourists, Mr Barnett said.

“Right now we are losing ground to other places. Over the past month we have incredibly lost ground to places like Bali. Today Bali is opening up without quarantine. We see the Maldives, we see other countries around the world embrace and get over the pandemic and try to keep moving on with their tourism profiles.

“Test & Go has to be Test & Gone. That’s number 1. To be able to be competitive we have to raise the bar and do what other countries in similar positions are doing,” he said.

Tourism recovery will now likely take years, Mr Barnett noted.

“We are at the beginning of a new cycle. and I think we are in uncharted territory. People keep asking what is the new norm? There is no new norm because the world is upside down right now. This is like a tourism cold war right now in terms of what we’re having. In terms of fuel prices, in terms of the war in Ukraine, the political instability we’re seeing certainly is causing a lot of issues

“Practically speaking, our projections for the longer term really go back to 2024. It is going to take time. When you’re in a new cycle you start from the bottom up,” he said.

CCSA RULES

TAT Governor Yuthasak Supasorn has announced that the agency is preparing a plan to relax travel rules in line with the timeline to declare COVID-19 an endemic disease on July 1.

The tourism goals for revenue and arrivals this year might be downgraded because of surging oil prices and inflation caused by Russia’s invasion of Ukraine, he said.

The plan to label COVID-19 endemic from the second half of the year will lead to further relaxations, including the termination of Thailand Pass, marking a milestone for the industry.

The agency has to start working on new protocols over the next four months, he added.

However, an RT-PCR COVID test result from tourists remains essential for the time being as the country is struggling with an overwhelming daily caseload, Mr Yuthasak said.

The TAT plans to propose further easing of travel regulations at the next Centre for COVID-19 Situation Administration (CCSA) meeting on Firday (Mar 18).

The agency wants to closely monitor the Russia-Ukraine conflict as it has triggered soaring oil prices, which directly affect airline costs. The TAT will wait until the end of this month before providing a new tourism forecast for this year, he said.

“Tourism is still a key engine to revive our economy, even though revenue was stymied by negative factors,” he said.

The tourism revenue goal is B1.28 trillion this year, of which B626 billion is to come from 10 million international tourists. Another B656bn is to come from 160mn domestic trips.

CASUALTY OF WAR

The latest study by the University of the Thai Chamber of Commerce (UTCC) has indicated that the Russia-Ukraine conflict is estimated to inflict B244.7 billion worth of damage to the Thai economy, dragging GDP growth to only 2-3% this year, if it is extended for the entire year.

“The Thai economy is highly likely to grow at a rate of 2-3%, with inflation staying at 5% this year if the Russia-Ukraine conflict is prolonged throughout this year,” said Thanavath Phonvichai, president of the UTCC. “This scenario will lead Thailand to enter technical stagflation in 2022.”

Stagflation is a combination of stagnation and inflation, reports the Bangkok Post. It describes an economic condition characterised by slow growth and high unemployment (economic stagnation) mixed with rising prices (inflation).

Stagflation in the 1970s saw many developed economies suffer rapid inflation and high unemployment as a result of the oil crisis.

However, Mr Thanavath insisted, “Nevertheless, it’s too early to make such a dreadful scenario, as the situation is still full of high uncertainties… The university is still maintaining the Thai economic growth forecast at the rate it made in November last year, but will wait some time before making a new revision, possibly in April.”

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christysweet | 16 March 2022 - 23:56:36

And the band played on.... Get your seat early off the Thai-tanic tourism ship - it's hit an iceberg called Global Upheavals.  

Pooliekev | 16 March 2022 - 16:57:25

@maverick. Fat chance of that here with all the old windbags whining along. 

maverick | 16 March 2022 - 15:52:06

Nothing wrong with tourism - after all it brought most of us here for the first time in my case 1978 - it’s all about balance - and they need help not brickbats 

Capricornball | 16 March 2022 - 13:06:32

Nasa is correct, Thais have had many opportunities to rethink their focus and build back a better experience for everyone, but they don't have any foresight or vision. Just grab grab grab everything possible all the time. Greed is the driver of everything tourism. Gov't has no vision or ethics, just lazy asses and pocket stuffers...no planning, no management...just disgusting levels of gre...

CaptainJack69 | 16 March 2022 - 12:04:14

If Mr. Barnett expects Thai people to actually plan for anything, or to think in long term scales rather than maximizing immediate profit then his 20 years here haven't been enough. The Phuket market has been decimated for years by certain wealthy entities maximizing their immediate income with unbridled construction and mass market pre-paid 'tours'.

Kurt | 16 March 2022 - 11:14:50

@JohnC, yes, what is nicer as being a Thai Official to pin point to external 'slew of crises'? That absolves them of own failures/responsebilities. Right? That is their daily 'road seeking' work, always look for external to cover own incompetence. It's a job.

JohnC | 16 March 2022 - 09:56:21

Casualty of it's own greed is a nmuch truer headline to use.

Kurt | 16 March 2022 - 08:28:36

Due to extra travel sores ( bureaucratic idiot paper work, extra expensive testing, compulsory hotel nights, inland travel restrictions, etc) stands Phuket now at bottom of the international asian holiday destination list of foreigners.
It's self isolating. Beach row chairs at dirty beaches without enough waste bins remain 'empty'. Don't get the Thai what is going on around them?

Fascinated | 15 March 2022 - 22:59:16

Quelle suprise- TAT is always pie in the sky bull pucky when it comes to numbers. Personally I feel that little has been achieved in the past 2 years, infrastructure and the taxi/ tuk tuk issue (which is worse than ever as they aggressively chase the few  customers available) are just 2 things that could have been addressed, but remain as poor as ever. Lipstick on a pig springs to mind.

South Point | 15 March 2022 - 19:13:11

Cancel this entire Test & Go nonsense now. Tourists need to be 100x more scared of catching Covid from locals than the other way around. Singapore, Bali, Philippines, and Cambodia have already seen the logic in this and opened up wide for vaccinated travellers. If Mr Anutin wants to wait until July 1st to do the right thing, God help Thailand and its tourism industry.

Nasa12 | 15 March 2022 - 16:59:24

In short, Thailand is a developing country in terms of tourism.  They are short-sighted and only think fast money right in their pockets, as they have always done and will do.

 

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