The island was closed due to the epidemic, putting at risk its flourishing tourism sector. The government has tried to promote domestic tourism by paying 40 per cent of travellers' hotel bills, but local spending alone cannot compensate for a loss of foreigners. In Phuket, foreign visitors accounted for two-thirds of overall tourists, but 90 per cent of tourism receipts.
Bangkok (AsiaNews/Agencies) – Thailand is planning to reopen the island of Phuket to foreign visitors, since local spending cannot compensate for the loss of foreign receipts, and this despite the fact that the government is footing 40 per cent of travellers’ hotel bills.
The plan, which called for the island to reopen to foreign visitors next month, has however hit a snag after the first community coronavirus transmission since 26 May was reported last week involving a 37-year-old inmate from a Bangkok prison.
“The government is ready, but there are still concerns from some groups that the reopening will lead to infections,” said Deputy Premier and Health Minister Anutin Charnvirakul. “We have to learn to fight and live with the pandemic. We can’t be afraid of it.”
The government and businesses are weighing the cost of curbing infection risks whilst limiting damage to the economy, which is set to contract by 8.5 per cent this year.
“Thailand’s failure to relaunch overseas tourism creates a dangerously perilous scenario for Phuket’s hospitality industry,” said Bill Barnett, managing director at consulting firm C9 Hotelworks.
“The situation is bad, and likely to get worse, as operating hotels incur losses day in and day out,” Barnett added.
In fact, almost 70 per cent of hotels in the development pipeline are now being delayed or put on hold, according to C9 Hotelworks data, with the financial impact eroding jobs in construction, real estate, retail and consumer credit defaults.
The Thai government has been trying to promote domestic tourism with a campaign to foot 40 per cent of travellers’ hotel bills, but local spending alone can’t compensate for a loss of foreigners.
In Phuket, foreign visitors represented for two-thirds of overall tourists but 90 per cent of all tourism receipts.
About 86,000 rooms in Phuket can’t break-even or be cash-flow positive with only domestic demand, and 50,000 jobs may be lost this year if there’s no support or international visitors, according to the Phuket Hotels Association, which represents 78 hotels on the island. Room occupancy rate at most Phuket hotels is in single digit, the group estimates.
“No amount of induced local demand can prevent the dramatic continued loss of jobs and rapidly eroding financial crisis for owners and operators,” said Anthony Lark, president of the association. “We strongly advocate a safe, pragmatic, and strategic reopening for foreign travellers.”
While some groups are opposing the reopening of Phuket, a clear and timely communication strategy to ensure safety of visitors and locals should help assuage concerns, according to Kongsak Khoopongsakorn, president of the Thai Hotels Association’s Southern Chapter.
“The delay resulted from mixed messaging about the details of the plan for safe reopening and led to some groups opposing the plan,” said Kongsak, who also works with 12 local business groups. “Businesses in Phuket are ready for foreign visitors to come back as soon as possible.”