Starting again: Thailand’s reopening gives hope despite challenges and risks
Many operators in the hospitality sector have gone through the worst of their business lives due to the pandemic but now, with Thailand once again open to visitors, they are hoping for a better future. Most businesses have resumed, albeit in a new normal way, but despite the relatively positive outlook, hotel operators believe it will more than a year before Thailand’s tourism is back on track.
The country reopened for tourists on November 1, and the lockdowns and restrictions have been lifted in Bangkok and in the provinces. Thailand’s economic recovery relies on the progress made with the vaccination program and the tourism sector, which accounts for 12% of GDP.
But no one believes tourists will return overnight. Bangkok Bank (BBL) forecasts that the country is expected to welcome back foreign tourists at around 50% of the record rate before the pandemic (4 billion in 2019), and this should increase to 80% of the pre-COVID level in 2023.
But the reopening to foreign tourists gives some operators hope that they can at least begin again after hitting rock-bottom earlier this year. The Thai Hotels Association reports that about half of the country’s hotels have been closed during the pandemic, and it is unclear how many will reopen. “International travelers are hungry to come back to Thailand, and with the easing of restrictions from November 1, we’ve already had more inquiries coming in,” Michael Schlueter, general manager of Royal Orchid Sheraton Hotel & Towers in Bangkok, told Thai PBS World.
Schlueter believes that the first groups to come back to Thailand will be from Asia. “But still the market now is domestically driven, relying on Thais and expats living here,” he added.
Philippos Arghirides, general manager of Hilton Hua Hin Resort & Spa, also sees regional visitors as the first to return. In a separate interview, he told Thai PBS World: “For the first half (of 2022), we don’t expect significant numbers. Potentially, Southeast Asia will be the initial driving force.
“I’m very confident about the reopening. For the remainder of 2021, it’ll be a gradual process with a number of challenges. The authorities well as the hospitality and tourism sectors will have to adapt to the new regulations, and this process will take some time, but I believe once all these challenges are resolved, 2022 will be a lot clearer and easier,” he said.
Arghirides added that the issue is not about coming to Thailand but more on returning home without a need for quarantine because at the moment most countries still require quarantine upon arrival. “I think the number of visitors to return to the normal (high) level in 2023.”
Perhaps Thailand’s capital will see a rebound first. Schlueter of Royal Orchid Sheraton Hotel & Towers is quietly optimistic and believes the number of visitors will return to normal by the 3rd quarter of 2022.
And the forecast is certainly not all that gloomy.
According to SiteMinder’s World Hotel Index, over 46% of hotel booking in Thailand during November was booked by foreign tourists, up from 22% in September and 14% in March. Overall hotel bookings rose to above 50% of 2019 level for the first in November. This is up from a fall of 9.74% occupancy in August, 2021.
Benefits from Phuket Sandbox
For an internationally popular destination like Phuket, it may take longer to reach the pre-COVID level. Yet on the brighter side, the Phuket Sandbox has helped prepare the country to get ready with a gradual increase in visitor numbers.
“The Phuket Sandbox has been great for the reopening of the country. We’ve seen a lot of travelers from all over the world coming back, on top of expats returning from holidays. During May and June when Phuket was under lockdown, hotel occupancies were below 5% all over the market. After the Sandbox kicked off in July, the market saw occupancy levels reach double digits, which was a great start,” Daryn Hudson, general manager of the Four Points by Sheraton Phuket Patong Beach Resort told Thai PBS World.
He believes that the occupancy level will climb back in the next 18 months, or between 2023 and 2024.
Bhummikitti Ruktaengam, President of Phuket Tourist Association, said after 120 days of the Sandbox, the system is very much in place and its sales and marketing work were as before. “I expect the number of tourists to return to normal levels in the next 3 years. But overall tourist spending will depend on what operators come up with in terms of products and services.”
In a separate interview, Chanon Wongsatayanont, Director of Merlin Phuket Hotels and Resorts, echoed Bhummikitti’s view that the Sandbox helped Phuket prepare for a smooth reopening. During the Sandbox period, the majority of visitors, around 40-50%, were Thais and the remaining were expats from the United States and other countries. Asked about the recovery period, he said it would take 2 to 3 years.
Dusit Plc remained in the red in the third quarter with a 302–million–baht loss, but saw a turnaround in revenue following the Phuket Sandbox and the lifting of travel restrictions. “Dusit Thani Group’s hotel business has seen an improvement in occupancy rate especially the Dusit Thani Laguna Phuket which has been welcoming back visitors since the launch of Sandbox in July this year. Tourists have also returned to Dusit Thani Hua Hin following the relaxation of lockdown measures from the government in early September. Meanwhile, the business in the Middle East including Dusit Thani Manila, Dusit Thani Maldives and other hotels managed by Dusit are also improving,” said Dusit’s group chief executive Suphajee Suthumpun.
“Even though we believe tourism has passed its lowest point and the situation is likely to improve gradually, there remains an uncertainty. It’s difficult to precisely predict the future. So, our goal is to stick to our plan and proceed with caution by monitoring the situation closely to minimize the potential impact as much as possible,” she said.
By Veena Thoopkrajae