- Thailand will push forward with a broader reopening of its tourism sector in the fourth quarter due to the relatively positive experience in Phuket of foreigners not being a major source of transmission.
- The Phuket and Samui sandbox schemes may be extended to other well-known destinations such as Pattaya, Chiang Mai and even Bangkok before the end of the year.
- Thailand is the most advanced among its Southeast Asian peers in reopening to tourism, and its sandbox scheme may become a model for Indonesia and Malaysia.
Warnings from the tourism lobby that many of the sector's smaller enterprises may not survive for a second lost season and the reopening of major travel destinations globally are putting pressure on the Thai government to quickly put in place a clearer timeline towards a substantial reopening to foreign visitors. The country's high tourist season runs from October to March. The government estimates tourism receipts were approximately 13% of GDP in 2019, but the World Travel and Tourism Council totaled the sector's contribution to the economy at 20%. About 70% of all tourism revenues pre-pandemic came from foreign visitors. Only Cambodia has a higher percentage in Southeast Asia on both measures, although its absolute USD numbers are about one-eleventh that of Thailand.
The reopening experience so far
In July, Thailand piloted the Phuket “sandbox” after vaccinating more than 70% of the island's residents. Foreign tourists could enter and freely move around without need of a facility-specific quarantine as long as they were fully vaccinated, but they had to spend at least 14 days on the island before being allowed to travel elsewhere in Thailand (most spent an average of 11 days before departing home). Samui followed with its own sandbox scheme on 15 July. The quarantine was changed to “7+7” in August, where only the first seven days would have to be spent on Phuket, with the visitor having the option to transfer to designated destinations such as Krabi, Pha-nga or Samui for another seven days.
According to the Tourism Authority of Thailand, room nights booked in Phuket totaled 190,000 and 176,000 in August – with the latter possibly having dropped due to the 7+7 change. However, these numbers also include returning Thais or expats who decided to stay in Phuket and avoid quarantine in Bangkok, and may therefore not reflect the real number of tourists. Thai tourism officials have been encouraged by the fact that as of early September, there have been very few Covid-19 cases among the sandbox arrivals.
Thailand's tourism authority has identified other destinations for the sandbox scheme in the next two months: Pattaya possibly by 1 October, with Chiang Mai, Prachuap Khiri Khan, Phetchaburi and Chon Buri possibly following soon afterwards. The government had also considered reopening Bangkok in October, but the city's governor pushed back against the idea, citing the still high Covid-19 numbers and the fact that its vaccination rate was still below 70%. For now, a 1 November start for Bangkok seems to be the earliest possible date.
Any recovery over the next few months is more to provide hope than any substantial reclamation of lost ground. Forecasts for the rest of the year range from 500,000 to 1.2mn arrivals, compared to the 40mn pre-pandemic. Around a fourth of the visitors in 2019 were from China, and tourism between the two countries is unlikely to restart significantly any time soon – especially since regional travel remains highly restricted. Thailand is instead aiming for visitors from Europe, the country's second largest market, the Middle East and India. Also, with the planned reopening, the government will likely increase its rapid testing capabilities, to quickly track down emergent clusters as well as reassure residents that the re-openings are being adequately monitored to reduce health risks.
In the meantime, to keep the sector afloat, the government will attempt to sustain employment and local demand, including a subsidy scheme where domestic travelers receive USD 20 per night toward a hotel room and USD 100 for flights. Also, there will likely be a push to reduce restrictions on domestic tourists as the foreign traveler sandbox falls short of forecasts.
In March, the government launched an asset warehousing scheme, where hotel owners could suspend debt repayments to their creditor banks if they transferred their assets as loan collateral with an option to lease or buy them back. However, uptake seems to be slow because of either the additional credit requirements of the banks or the low valuations given to properties.
The push for high vaccination levels in the targeted destinations is also leading to a modification in the government's inoculation strategy. Thailand is now using Sinovac's CoronaVac as its first dose, to be followed by AstraZeneca's shot four weeks later to reduce the time between vaccinations. Also, the local government in Phuket has authorized doctors to inject the AstraZeneca as boosters into the skin, rather than muscle tissue, which may be implemented later in the year. CoronaVac was administered in preparation for reopening but perceptions that the Chinese vaccine may be less effective than other western vaccines has led to the adoption of AstraZeneca as the booster in the province. According to the researchers in Phuket, this would allow five boosters per vial without losing efficacy, stretching the available AstraZeneca doses.