Phuket’s lost summer – looking to 2021 for tourism recovery

25/05/2020

In a solemn recognition of the reality of Phuket’s stalled tourist industry, a spokesperson for the southern chapter of the Thai Hotels Association is saying most of the west coast hotels are unlikely to reopen until the last quarter of this year. And that’s just the start of the problems for the popular island beach resort.

For now, Phuket’s International Airport remains closed to scheduled flights, and the Tha Chatchai road checkpoint at the top of the island is heavily curating who comes in and out with red-tape and paperwork. Nationally, the Civil Aviation Authority of Thailand has already banned international travel into Thailand until at least the end of June – it could be extended further.

Phuket’s issue, as an economy that revolves almost completely around tourism, is that, even if it throws open the immigration gates at the airport and the doors of its almost 100,000 hotel and accommodation rooms, there are few options for incoming tourists at this stage. Where will they come from? Europe (including the UK), the US and now South America, are mired in their own pandemic outbreaks, and whilst trying to reopen their economies, are facing imminent second waves of Covid-19. It’s unlikely the risk-averse Thais will willingly welcome ‘at risk’ countries back any time soon.

It’s only a few regional customers that are likely to be given approval to fly their businesspeople and tourists into Thailand anytime soon, but even that is going to be a trickle at best, at least in the short to medium term. Even these tourist markets have seen their economies hit hard by the pandemic and will be less likely to prioritise travel at this early stage – China, Malaysia, South Korea, Singapore.

Whilst other parts of Thailand have opportunities to reopen their businesses – manufacture, agriculture, IT, and large chunks of populations visit shops and general trading – Phuket has little of that. Some 50,000+ of the island’s 450,000 permanent population have already departed the island, either before the borders were closed in mid-March, or as soon as they were able to return to their provinces when the road border re-opened for repatriating people at the start of May.

Even survey respondents, testing the opportunities for the island to reopen to domestic traffic to kick-start the stalled tourist economy, have shown little interest in heading to Phuket as the rest of Thailand has, well frankly, more important things to worry about. Since Phuket’s own lockdown restrictions have been lifted, early ‘staycation’ promotions, attracting locals for a bit of post-lockdown leisure, have fallen flat. For now, Phuket’s beaches remain closed anyway.

c9hotelworks‘ Bill Barnett, says “Phuket’s hardest yards for tourism are still in front of us and the loss of jobs will be enormous. No candy coating here.”

“Hotel operators and owners, are now reassessing the need for a quick return to reopen and from our talks, many are looking at pushing back to October or even later given the economics simply do not add up.”

“Even the domestic thrust of staycations are unlikely to provide the traction larger hotels need to scale up. Domestic business for island hotels on a broad basis is sub 10% of the market mix. For smaller hotels, targeting domestic is fishing where the fish are, and makes absolute sense.”

Suksit Suvunditkul, CEO of Deevana Hotels and the vice-president of the Thai Hotels Association southern chapter, says that hotels along the beach that target international guests will reopen in September at the earliest. Speaking to Bangkok Post, he says that the situation remains unpredictable.

“….but as July and August are low season, resuming operations is not worth the effort while guest demand is still weak. With some hotels not reopening until the fourth quarter, they cannot expect to profit.”

Forecasts from the Tourism Authority of Thailand say that the rest of 2020 will be mostly limited to domestic tourism, “with the Asian market starting to recover at the beginning of next year and the European market to follow much later”.

But, for now, hotels are still shuttered as management wait in hope for signs that they are, firstly, allowed to reopen and, secondly, the barriers are removed to international travel. The other main hurdle is the paperwork or restriction that will be imposed on inbound tourists. It’s hard to imagine tourists will be wanting to pack their flowery shirts, hats and suncream to end up having to submit long lists of paperwork and health checks before they arrive.

Courtesy: Published at The Thaiger on May 25, 2020

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