Thailand faces significant challenges in tourism recovery after COVID-19, impacting its economy and travel trends for 2023. Explore the road ahead for sustainable tourism and industry resilience.
The view from the Air Bar and Infinity Pool of the Intercontinental Hotel resort overlooking Taling Ngam Bay on Koh Samui, one of Thailand’s 1,400-odd islands, must rank as amongst the best in the world, particularly at sunset. Tibor Horvath, the Hungarian general manager, says that for some, according to the New York Times bestseller A Thousand Places to Visit Before You Die, it is a view to “die for”. As a reporter who has witnessed what I would rank as some of the world’s most spectacular vistas ranging from the glistening peaks of the Hindu Kush on the Pakistan-Afghan border to the swirling waters off the Western Cape of South Africa and even the spectacular autumnal colours of the Lavaux UNESCO World Heritage vineyards overlooking Lake Geneva, I doubt that I’m prepared to die for a view. But I can see Horwath’s point. It is stunning.
Located on a pristine 16-acre forested and ecologically-rich hillside with its stylish mix of traditional and modern room complexes and villas interlinked by wooden walkways and electric buggy trails (no cars allowed), the ‘Intercon’ commands the amenities one might expect of such a luxury resort: half a dozen swimming pools, a superb beach, top grade restaurants, a spa and quiet isolation from the tumult of the island’s normally popular haunts, such as the main tourist centre at Chaweng Beach, a good half an hour drive away.
Over the past three decades, more and more tourists have thronged to this tropical island with its bustling bars, beaches, night markets and luxury malls boasting Starbucks, Prada, Skechers and Breitling watches. In 2017 over 2.5 million tourists, mainly from countries such as Germany, Britain, Australia, Switzerland and Russia, came to Koh Samui, up from 2.34 million in the previous year. Even though the figures dropped somewhat in 2019 pushing the local tourism authorities to appeal more to Thai and Chinese tourists, the industry was still doing well.
Then came the COVID-19 lockdown. As with so many other resorts across the globe, tourism dropped to almost zero. (See Keith Somerville article in Global Geneva on COVID’s impact on tourism and conservation in Africa). While Koh Samui has some fishing and export agriculture such as coconuts, rubber, fruit and vegetables, even cocoa and coffee, as well as small industry to keep itself going, many islanders have lost their livelihoods. In July, the Intercontinental had to lay off 51 staff – “that’s 51 families,” noted Horvath – but with full benefits.
Thailand is widely regarded as a ‘success’ country that took the right measures by closing its borders in order to manage the outbreak. (Today, people from the outside, such as family members, returning Thais, or expatriate professionals seeking to take up jobs, can enter, but need to undergo a strict 14-day quarantine – at their own cost – at a government-sanctioned hotel or centre). Others, notably entrepreneurs who have everything to lose, feel, some bitterly, that the government went too far by completely shutting down outside tourism.
Nevertheless, the country is virtually COVID free with no new community-based cases for months. There have been reported cases of returnees, mainly from the Gulf region, or migrants who have crossed over – often illegally – from Burma (Myanmar), but these have been immediately quarantined. While some question the veracity of the government’s figures, what Thailand has achieved is exceptional, particularly when compared with countries such as Switzerland, France, UK or United States. (See Global Geneva article on Switzerland’s questionable policies regarding COVID)
So there are lessons to be learned. Even if there is no coronavirus, for example, Thais continue to wear masks and social distance. There are also constant reminders on how to deal with the pandemic. (See Tira Shubart’s article in Global Geneva on Iceland which has embraced a highly successful testing and tracing approach to tourism)
The main challenge now is how to revitalise the economy without placing such an emphasis on foreign visitors. Numerous hotels, restaurants, bars, cafes, souvenir shops and massage parlours have closed. Even local animal attractions such as a sea aquarium, monkey park and snake farm, have had to cease. (The lack of tourism income is seriously affecting conservation initiatives and elephant support centres across Thailand, much like Africa). Once crowded resort establishments in this supposed paradise lie barricaded and empty, many with weeds and undergrowth taking over. The same goes for the malls with their ever-hopeful salespeople hovering in the aisles waiting for customers, while entire rows of once crowded street stalls are boarded up. There is only so much available revenue to go around.
But the tourists are not the only ones to have gone. So have a sizeable number of long-time foreign residents, many of whom used to run speciality restaurants, yoga centres or beachside bars, or came here to retire. Many, too, were young people in their 20s and 30s who were travelling through but then decided to to “hang out” or set up their own businesses. For some, they no longer have the means to survive. For others, they have preferred to return home to their families in Europe or Australia. Certain embassies, such as France and Belgium, have also refused to issue support letters as required by the Thai immigration authorities, who have extended visas until the end of October, leaving their citizens with no choice but to leave.
There are still quite a few expats, who are persisting in their efforts to remain. But there is a lot of talk of leaving if business does not pick up. The international schools, which had sprung up with the island’s burgeoning Thai-Expat community, have lost both students and teachers. Given their reliance on tuition fees, they are offering both physical and online education to continue operating. They are obviously hoping that people will return.
The Intercontinental, which is owned by a Thai billionaire, is lucky in that it has a huge worldwide hospitality corporation to back it up, thus maintaining the resort in pristine condition. As manager Horvath points out, while the economic situation remains harsh, they are attracting Thai and expatriate weekend visitors. “This is enabling me to keep my remaining team, which is important,” he explains. Offering major discounts, sometimes slashing rates by over half, the resort now operates with over 45 per cent capacity on most weekends in major contrast to the earlier shutdown months. The Christmas holidays are already 95 per cent booked; the same goes for some of the long weekends ahead. Luxury hotels in Bangkok, such as the Mandarin Oriental, tend to do well with their appeal to Thailand’s wealthy classes, particularly for weekend weddings, or for specially-discounted business ‘staycations’ on weekdays. It is a different story for the more economic hotels.
For the moment, however, as many point out, the future looks bleak. “People will need to adapt,” noted British restauranteur Ollie, who is married to a Thai doctor and runs The Art Club, a high-quality vegan restaurant with excellent ratings located near the Koh Samui Government Hospital. “We’re lucky in that we have a regular clientelle of residents, both expat and Thai, including doctors and nurses from the hospital, who like our food. We’re not dependent on tourists.” Similarly, The Road Less Travelled Coffee Shop, also appears to be doing relatively well. It is even developing high quality cultural activities, such as theatre, art and music, aimed primarily at the Thai and expatriate communities on the island.
Down the road, an Australian entrepreneur, who runs the E-Revolution Company on the island and married to a Thai, agrees with the need to diversify. He has seen his bike rental business drop to almost nothing, but feels confident that it will slowly creep back. While his site offers intriguing bike routes across the island, he has had to branch out in the interim into various online sales to the rest of Thailand and the region, such as e-bikes and batteries. “One’s got to keep going,” he explained with a smile.
Furthermore, in an effort to support jobs, the Thai government is subsidizing the hotels by paying for 40 per cent of the overnight fees of Thai guests who pay taxes. Apparently, it is planning to do the same for expatriate residents. Most hotels, however, particularly the more modest ones, cannot compete. They have not got the resources to pay staff and remain open during the ‘dry’ periods. “The reality is that we now have to focus on the domestic market for 2021,” Horvath says.
As with many in the private sector, hospitality operators are finding it difficult if not impossible to plan ahead for a post-pandemic ‘normalization’. Many believe it will never return as before as one of the world’s leading tourism destinations. As with elsewhere, there will be no “new normal” but rather constantly changing “abnormals.” (See Global Geneva articles on the Coronavirus and its impact)
As I explore Koh Samui by bike, there are few cars once away from the main routes. Prior to lockdown, the town roads were thick with exhaust-spewing traffic. But now, the only thing to watch out for along the backlanes are the soy (alley) dogs that like to sleep in the middle of the street.
In Bangkok, which more or less shut with the pandemic, the city is not quite what it was before, but the clogged snail’s pace rush hours are back. Business is perking up and many people have returned to work, but others still operate out of their homes or cafes. UNSCAP, the United Nations campus in Bangkok, is almost deserted. Huge office blocks are already finding it difficult to find tenants with companies cutting back on their corporate spaces. Some have consolidated by moving key people to regional hubs, such as Singapore, while retaining employees and consultants locally to work independently or in ‘share’ offices.
Quite a few construction sites, too, have paused if not halted their operations, while businesses, such as restaurants and hotels which have closed temporarily, are using the opportunity to renovate. Some are also regarding COVID as a way of becoming more environmentally-friendly by not contributing to commuter pollution. “COVID has been a wakeup call. We have to become far more positive in the way we deal with the pandemic, because it certainly will not be the last,” said the CEO of a leading European-Thai corporation. “We also need to look ahead and think of climate change.”
It is a different story in the towns and islands that have relied primarily of tourism. In some locations, it reminds me of Zimbabwe during the 1980s and 90s when both blacks and white abandoned the country under President Robert Mugabe disastrous policies. Wherever I go in Koh Samui, I see signs in English, German and Russian advertising houses for sale or for rent. According to several sources, even if the pandemic situation may not change for another year or two, now is the time to buy. Those who can afford it can snap up bargain properties at up to 70 per cent off, including luxury villas.
“There is a lot of wealth in Thailand,” one European corporate lawyer in Bangkok told me. “They’re not concerned about getting returns in the next couple of years, but they can make a killing once the economy is back.”
Some Koh Samui restaurants, pharmacies, garages, real estate offices and other enterprises are trying to remain open, but with almost no business. “You are my first customer in a week,” one Thai optician told me when I walked in to buy a pair of glasses. Some of the quality Thai establishments, such as I-Talay Beach Bar and the Virgin Coast which should be packed, are barely scraping by and yet cheerily still treat their customers like royalty. The Thais have not lost their sense of hospitality.
It is a similar story elsewhere. Seb, the Belgian owner of Le Kiosque, a gem of a French bakery and cafe – “people wouldn’t get it if I called it a Belgian bakery” he explains, not without a sense of humour – has already sent his French wife and child back to Europe. He maintains that he is doing barely five per cent of his usual turnover, and yet is keeping on two Thai employees. His customers consist mainly of local expats – a Canadian musician, two Russian digital nomads who dutifully turn up for coffee and croissants every morning (“probably hacking the U.S. elections” one guest commented) and residents swinging by to pick up their bread. “I will give it another six months,” he said. “Then we’ll see.”
It is a similar situation in other key towns that rely heavily on foreign tourists and residents for much of their income, such as Phuket, Thailand’s largest island, or Chiang Mai in the north.
Two hours drive south from Bangkok lies Pattaya, a notoriously seedy resort often referred to as Southeast Asia’s “sex capital”. It normally throngs with thousands of foreigners. Today, it is a ghost town. Some of the big hotels are open, such as the Centara Grande, which markets itself as a sort of Disney-style resort ideal for children. They are relatively full on weekends, but are running specials at major – and probably loss-making – discounts. Walking Street, the town’s main night-time thoroughfare, is deserted apart from a few joggers.
Riding along the waterfront, I stop to talk with a Thai entrepreneur in the process of re-opening his nightclub. “We were closed for seven months. Business is terrible, but we are giving it a try,” he explains in good English. “But I don’t know how long this Covid will go on.”
What about the Russians? I ask. I am referring to the thousands of Russians, Ukranians and others from the former Soviet Union, reportedly some 60,000, who had made Pattaya their Vladivostok on the Gulf of Thailand. He laughs. “Oh, they have gone back. Some stay, but not many.”
Even the Russian prostitutes, one of the mainstays of the resort, are nowhere to be found. It is not a good time for the Russian mafia and sex trafficking. I stop by the Russian Orthodox Church, a striking and completely out-of-place building with its traditional white-washed walls and golden domes. While the priest was apparently out, a Russian woman suggests returning on Sunday. “A few people will be around,” she assures. According to some, Bangkok is not disappointed to see the Russians gone. They want to reassert their control over such forms of tourism.
As part of its tourism re-assessment, the Thai government is exploring different options for encouraging internationals to return, particularly for the potentially lucrative winter holidays. But as some frustrated tourism operators point out, the authorities keep postponing their decisions, making it difficult for the tourism industry to plan properly. One confirmed proposal is the arrival of 1,200 carefully selected and wealthy Chinese tourists. These will need to commit to at least three months stay, plus pay in advance. Yet as one Thai businessman points out, this is not likely to make much of a dent.
One plan is to name designated tourism ‘bubbles’, such as Phuket and Koh Samui, but with visitors committing to at least two weeks through a programme dubbed: “Safe and Sealed.” Tourists would not be allowed to travel elsewhere, in effect turning such resorts into manageable ‘quarantine’ areas. According to the Ministry of Health, those who wish to visit other parts of Thailand would have to remain for a minimum of three weeks to ensure that they are not infected. Similarly, hotel staff wishing to leave would first have to go into quarantine, and then be tracked and tested for Covid-19.
If successful, the Phuket-Koh Samui models would be replicated elsewhere. For the moment, however, particularly while Europe, North America and other parts of the world are experiencing major pandemic spikes, such plans are expected to remain on the shelf.
In any case, if and when Thailand can re-embrace foreign tourism, the longterm focus will be on visitors willing to spend money, primarily in luxury resorts or private residences, such as holiday villas. So this would put an end – at least temporarily – to budget backpackers. According to international tourism organizations, such as the United Nations’ Office for Tourism in Madrid, this is a dangerous policy as attracting youth is an important investment. “They are your best bet for the future, so to treat them as not good enough is not encouraging,” said one official.
However, according to sources, including both diplomats and business people, one of Thailand’s biggest problems for establishing confidence is its sometimes derogatory attitude toward outsiders. As long-term residents, but also some Thai business people, point out, this often borders blatantly on racism. Earlier this year, the Minister of Health squarely blamed foreigners without any cited evidence as being responsible for the spread of the coronavirus. This appears to totally contradict the warmth and politeness ‘foreigners’ have experienced in Thailand. It also partially explains why so many expatriates like to live here.
“Right now, the government is blaming the expats for taking away their jobs. The reality is the complete opposite and the ordinary Thais know this. Our businesses are in fact providing jobs and my partner is Thai. We are an important part of the economy,” angrily maintained one European tourism entrepreneur, who has been living in Thailand for nearly 30 years.
And yet, over the summer as the country opened up again, traditional Thai massage parlours posted signs by order of the police not to service foreigners. The Thais operating the shops were clearly embarrassed and apologetic. “It is not us,” said one woman. “It is them,” she maintained, pointing to a police station a hundred meters away. More recently, a Thai hotel in Koh Chang, another resort, brought a law suit against Wesley Barnes, an American resident, for criticizing it in TripAdvisor and Google. Arrested by the Immigration police, he now faces two years’ imprisonment.
As a result, certain embassies, such as the UK, have downgraded Thailand as a safety and security risk for foreigners. The Thai Hotels Association (THA), anxious about the country’s reputation, has criticized the hotel for not being willing to take “critical feedback” in social media. Clearly, this is just the sort of bad publicity that Thailand does not need.
Online users, whether Thai or foreign, also risk police retribution if they comment negatively on the Thai Royal Family under the country’s strict Lese Majeste regulations. Nevertheless, as reported by both local and international media, such as the New York Times and The Guardian, Thais, particularly young people, have been protesting against the monarchy demanding reform. When reported by BBC World and CNN, however, their television broadcasts were strangely interrupted.
In the meantime, the Thai Tourism Authority is seeking to keep its “Amazing Thailand” image in the public memory. It is running ads on international broadcasters which remind viewers that Thailand will be there once life gets back to normal. Clearly, Thailand wishes to ensure that it is not forgotten. Much, however, will now depend on whether the rest of the world can bring their COVID spikes under control. Until then, most Thai tourist operators despair, there will be no return.
(Editorial Note: As part of this report, Edward Girardet talked informally to numerous sources, both Thai and expatriate, so it has been possible to put together a fairly accurate picture of the current situation).
Edward Girardet is an author and foreign correspondent. He is also editor of Global Insights Magazine/Global Geneva.
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