Travel despair crushes high season hopes

The travel industry looks set to lose another high season after the latest tourism confidence index hit an all-time low, despite Thailand's reopening plans and domestic stimulus campaigns.

According to the Tourism Council of Thailand (TCT)’s quarterly survey, the tourism confidence index in the third quarter hit a historic low of 7 out of 200. A normal level of normal confidence would be reflected with a score of 100.

The negative sentiment is expected to continue into the high season, with the index forecasting fourth-quarter sentiment of just 29 — a far cry from 62 in the same period last year — even though the country is preparing to roll out more pilot areas for international tourists and resuming two domestic stimulus campaigns in the final quarter.

Chamnan Srisawat, TCT’s president, said the government should consider urgent adjustments to the sandbox programme to revive the battered industry in the fourth quarter.

TCT wants the reopening plan to be conducted under single standard operating procedures where every destination uses the word “sandbox” in its project name.

Meanwhile, the TCT said the cost of Covid-19 tests should be reduced and the government should let tour operators help tourists process applications for the certificate of entry (COE), which is now considered an obstacle for entry procedures.

The TCT surveyed 740 tourism- related operators from Aug 15 to Sept 5 and found that the high infection rates and nationwide lockdown during this period had resulted in declining confidence, as 54% of them didn’t have the income to sustain their businesses and 84% had to reduce their workforce to less than half.

The remaining workforce in the industry was only 29% of the 4.3 million pre-pandemic total, a sharp contraction from 52% in the second quarter, which means at least 71% of the total workforce had lost their jobs by the third quarter.

The survey found that 44% had shifted from tourism to other sectors or closed temporarily, which is higher than 38% in the second quarter and 19% in the first quarter.

Permanent closures also increased from 4% of the industry in the second quarter to 5% in the third quarter, with every service sector negatively impacted, except the hotel sector, where the closure rate was 18%, down from 23% in the previous quarter, due to sandbox programmes in Phuket and Koh Samui, and some hotels becoming hospitels.

Entertainment venues emerged as the most damaged businesses, with their rating in the third-quarter confidence index plummeting to zero from 42 in the same period last year, followed by spa and massage operators at only 3, down from 60 in 2020, as they have only just been allowed to reopen after a months-long closure.

In the fourth-quarter index forecasts, confidence levels for both entertainment venues and spas are predicted to slightly improve to 8 and 12, respectively, but they remain the lowest amongst other service sectors.

By location, tourism operators in Bangkok had the lowest confidence with a rating of only 3, while all regions had confidence no greater than 10. However, the forecast confidence of those in Bangkok in the fourth quarter is predicted to increase to 33 as operators are confident about mass vaccinations, which should progress to 90% of the capital’s population.

The TCT also polled 1,540 local respondents to gauge travel confidence and their opinions about reopening plans for the fourth quarter.

Mr Chamnan said 90% of tourism operators and 40% of the public support the reopening schemes in the sandbox areas, but most of them still want to see at least 70% of the whole country’s population inoculated, while 34% of local people want the number of daily cases to go below 1,000 before resuming the reopening.

Meanwhile, the TCT survey also found that 44% of people are still resisting making decisions about their trips as they want to wait until the virus situation improves without obstacles from travel regulations as seen during lockdown.

Marisa Sukosol Nunbhakdi, president of the Thai Hotels Association, said the performance of hotels will not significantly improve as there are still restrictions on meetings and events in the dark red zone provinces, which limit the number of participants to 25 people.

She said 72% of hotels that have already reopened saw occupancy rates below 20%.

“The Tourism Authority of Thailand aimed to regain 50% of pre-Covid tourist numbers by next year, but it remains a big challenge for us as the Chinese market will probably shy away from overseas trips until the end of next year and we have to work harder to lure other potential markets, such as Indian tourists instead,” said Mrs Marisa.

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