Tuesday, April 16, 2024

How Covid-19 Will Change the Thailand Tourism Sector

While the prospect for Thailand in overcoming COVID-19 may appear promising, all the roads to economic recovery hint rocky hurdles, and experts have already forecast bleak annual growth for Thailand in 2020.


The tourist sector comprises a significant part of the Thai economy. It provides one in six job opportunities and accounts for approximately 13-14% of the country’s economy.

In January, Thailand received more than 3.5 million foreign tourists. Due to Thai’s reliance on the tourist sector, it is one of the most vulnerable economies to the COVID-19 impact. 

 China accounts for the most significant percentage (30%) of tourists visiting Thailand. It plays a vital role in underpinning the nation’s tourism sector.

Thailand has the largest proportion of Chinese visitors in SEA countries

Thailand felt the impact of Covid19 on 23 January as soon as China stopped travels and imposed a quarantine on Wuhan City.

Thailand, which has received praise for its performance in containing the COVID-19 outbreak, has since 3 May 2020 gradually relaxed restrictions on local travel and certain types of business, while implementing strict social distancing rules.

About 96 per cent of those infected have fully recovered, and the fatality rate is less than 2 per cent, the Ministry of Foreign Affairs of Thailand states.

The Thai government enforced the state of emergency on March 26 until April 30 and imposed a 10pm to 4am curfew on April 3. The emergency decree was then extended until the 31st of May.

Suddenly, Bangkok temples and markets became less crowded. The tourism sector will continue to deteriorate as more and more countries lock their borders and impose restrictions. The tourism-related gaming industry is one of the key sectors likely to be affected by the COVID-19 impact.

Anonymous sources from the Asian GClub casino (จีคลับ) informed us that, initially, 15% of the tourists in south east region where casino is allowed were playing slots (สล็อตออนไลน์) during their visit. However, this percentage has reduced significantly to 0.1%. 

The future of the tourism sector over the next few months remains uncertain

Hoteliers in Bangkok have not been spared. Before the outbreak, and particularly during the high season, hotels enjoyed 80 to 90% occupancy.

When Thailand reported its first cases, the hotel occupancy rate dropped to 65%. Other than occupancy, hoteliers also had to reduce regular rates by 10 to 20%. For instance, the Sugarcane Boutique in the northern capital of Chiang Mai has had over 200 cancellations of room nights with no new bookings. 

Key attractions such as the Grand Palace, Wat Pho, Lumphini Park, initially filled with tourists, are deserted now

Although the nation has fewer cases than Japan, Korea, China, and Italy, tough times lie ahead for the tourism sector. The impact depends on the restrictive measures implemented and how long the pandemic will last.

Traders in Bangkok’s commercial district have observed a decrease in the number of customers. Key attractions such as the Grand Palace, Wat Pho, Lumphini Park, Sathorn Unique Tower, and the Maeklong Railway Market, initially filled with tourists, are deserted now.

The streets are also abandoned. As such, the epidemic has been disastrous for small-scale businesses such as drivers of the Chiang Mai minibuses, traditional dancers, and flower sellers.

Employees also feel the impact of the coronavirus

Some hoteliers sent their employees on unpaid leave to cut down their operational costs. Even with the declining market and jobs, most of these people have mortgages and bank loans to service.

They only hope that the government will help them by delaying or cutting social security payments and tax payments and offering soft loans.  

​In March 2020, the Thai economy contracted at a higher rate than the previous month, said the Bank of Thailand in a press release. 

The COVID-19 outbreak affected economic activities more severely in all aspects. In particular, the tourism sector severely contracted due to international travel restriction measures in many countries including Thailand.

It is unclear what the economy would look like after COVID-19

While the prospect for Thailand in overcoming COVID-19 may appear promising, all the roads to economic recovery hint rocky hurdles. Gurus have already forecast a bleak annual growth for Thailand and around the world. Nonetheless, all sectors are taking advantage from this “time out” to make necessary preparations for the post-COVID-19 landscape.

However, flight costs are likely to drop amid the epidemic. Travel costs are expected to drop to 50%, compelling tourists to cash in on the more affordable traveling opportunities.

Also, after the pandemic, more tourists will prefer more private hotel spaces. Private hotels will benefit after covid-19 compared to the large hotels with communal sharing spaces and any rooms, which encourage crowding.

The Centre for Covid-19 Situation Administration of Thailand approved in principle a proposal for “travel bubbles” with selected countries that have shown they can effectively contain the coronavirus.

Travelers will re-venture the industry cautiously with the concept of social distancing in mind. Assuming that Airbnb survives the COVID-19 crisis, it is in an excellent position to boom after the epidemic. In the same social distancing spirit, big hotels will be less popular compared to small villas, and tourists from Europe will avoid crowded spaces during the first year after recovery. 

It will be a long road to recovery before Thailand resume normalcy and our economy regains momentum. But as long as Thailand remain committed to its aspirations, the world will rebound and emerge with a stronger sense of resilience and solidarity.