Covid 19 ravaged the tourism industry for over 2 years. So it came as a relief when earlier this year in June - the Thai government removed covid restrictions making it easier for travelers to enter the Kingdom. For anyone traveling to Thailand you no longer need to provide proof of health status and vaccination, prior to departure.
The shift in policy was a major change from the confusion surrounding entry requirements, clearing the way for tourists and in July alone, the number of international visitors jumped by over 6,000 percent to 1.2 million.
Having made it easier to enter the kingdom, government spokesperson Anucha Burapachaisri, in a statement to the press in September said that the government expects to earn 2.38 trillion baht (around $64.5 billion) in tourism revenue in 2023. It is hoped that tourism arrivals will jump back to 32 million, or around 80 percent of their level in 2019, the last full year before the pandemic.
Anucha also said that the government is targeting between 8 and 10 million visitors for 2022, which marks a massive increase on the 428,000 foreign visitors who made it here through the country’s maze of vaccination, visa, and quarantine requirements in 2021.
As a local resident of Phuket, it’s nice to see recovery, but things can get chaotic in the new normal. Since July, with the easing of Covid restrictions we’ve seen a slow but steady increase in the number of tourists plying the streets in and around popular tourist beaches. The number of tour buses, cars and motorbikes on the road has increased and so has the traffic.
Restaurants situated along the high street in Patong, Karon and Kata are markedly busier and prices have gone up by 20 – 30 % and in some places 50 %. Shops including souvenirs, clothes, and convenience stores which closed during Covid have sprung back to life. With the prospect of money from tourism there’s also more people on the street touting tours, tailoring, and taxi services with prices to match the pre-covid era. Massage Shops mothballed during the two-year pandemic have a new lease of life and the bars along the famous Bangla Road are once again blaring to music welcoming guests.
Cruise ships have also returned to Phuket. In Pre-pandemic 2019, Phuket welcomed 154 cruise ships carrying a total of 485,000 passengers and crew. Lately the first Cruise to arrive in 2022 was “The Genting Dream”, operated by Resorts World Cruises, from Singapore bringing with it 3000 passengers.
Phuket is bouncing back – having welcomed more than 2.3 million visitors in 2022 with earnings of at least 127 billion baht in revenue.
From Jan - Oct 2022, Phuket has been the top destination in Thailand in terms of both tourist arrivals and earnings and has welcomed two and a half times more foreigners than Pattaya and earned ten times more revenue.
The island welcomed 475,654 foreign visits. The top-10 markets are as follows:
For Pattaya – K Thanet Supornsahasrangsi, president of the Tourism Council of Chonburi, said that Pattaya has seen a 60–70% room occupancy rate for New Year's Eve, an increase compared to the rate of 30-40% the city saw during the height of the pandemic.
He said that since curbs were lifted, more airlines have launched new routes to U-tapao airport in Rayong, including Bangkok Airways, Thai Vietjet, Thai AirAsia and Thai Lion Air, attracting more visitors...
The Tourism Authority of Thailand expects total arrivals of foreign visitors for 2022 to reach 11.5 million. Thai Finance Minister Arkhom Termpittayapaisith said recently that tourism would be the main driver for the country to achieve a 3.8 percent growth in 2023 after an expansion of 3.1 to 3.2 percent in 2022. As the country is now seeing 60,000 to 70,000 foreign tourists per day, it should end the year with 11.5 million foreign visitors.
The Hotel Business Operator Sentiment Study, conducted in December 2022 by the Thai Hotel Association and the Bank of Thailand , showed that most hotels expect their revenue to rise by 10 - 30% in 2023.
The study involved 95 hotels and showed that most operators expect to welcome more guests this year. The forecast seems feasible because the average occupancy rate in December was 63%, up from 59% in November. It’s possible for Thailand to expect more arrivals to continue going up during the high season, which runs from November to March.
Thailand’s tourism sector is expected to revive back to pre-covid levels by next year, prompting the Tourism Council of Thailand to come out with hopes that the country’s tourism numbers could return to near 40 million seen before Covid-19 started.
The two countries that will contribute the most to Thailand’s tourism recovery in 2022 and 2023 will include Russia and China.
Russian tourists are once again traveling in large numbers to Thailand via chartered flights and using credit cards issued outside the country to get around payment difficulties, turbo-charging a gradual tourism recovery.
More than 44,000 Russians visited Thailand in October 2022, compared with less than 10,000 each in the months following the start of the war in Ukraine in February - according to data from the Ministry of Tourism and Sports.
The resumption of direct flights between Moscow and Phuket will undoubtedly lure more Russians, according to Thai officials. Unlike the situation with flights out of China - chartered flights operated by airlines such as Azur Air and commercial flights from flag carrier Aeroflot PJSC have been bringing people from Moscow, Novosibirsk and Vladivostok to Bangkok and popular beach destinations such as Pattaya and Phuket, according to the Phuket Tourist Association.
From January 2023, China said it would scrap the requirement for inbound travelers to quarantine, making holidaying abroad easier. The change is expected to boost tourism across the wider region, including south-east Asia - heavily dependent on Chinese travelers.
After scrapping quarantine requirements, online travel sites reported immediate spikes in booking and searches. One online platform - Qunar, says it saw a seven-fold increase in flight searches within 15 minutes, with Thailand, Japan and South Korea among the top destinations. For 2023, the tourism authority said Thailand could see about 25 million foreign tourists if Chinese tourists returned.Chinese tourists accounted for nearly a quarter of the 40 million visitors to Thailand in 2019 but the number drastically dropped with China’s lockdown.
With China now getting rid of its ‘Zero Covid’ policy and allowing freer travel from January 8th, it is expected that as many as 25 million tourists would be heading into Thailand in 2023 - up from 11 million seen in 2022.
What can change the projected number of visitors, is the ongoing rate of Covid infections, which right now is at levels that are comparable to those seen around the world at the end of 2021 and early 2022 (during the initial Delta outbreak). If the situation does not get any worse, we can remain positive about 2023 otherwise it becomes a big uncertainty.
Finally – one other consideration is flight capacity into South-East Asia. At the time of writing, overall capacity is still down a third of what it was in 2019. Not only are there less flights but operating costs are higher, which means that most carriers will be reluctant to restore capacity or frequencies if they remain uncertain about demand.
So whilst there are high hopes for a Covid recovery in 2023, there are many variables that can disrupt the trend going forward.
The main one, which most of the tourism industry places its faith in is Chain. But China’s return will depend on how new Covid infections impact the wider economy and how resilient it is in bouncing back. Watching this dynamic playout will be an important factor that influences the decision to add flight capacity to destinations outside China.
Meanwhile, Russia remains an important source market too but how much of an impact it has over the longer term will depend on the ongoing war in the Ukraine (as most Russian’s are already here or have already travelled here) and the sanctions put on it (and its citizens) by other countries.
Beyond China and Russia, other factors that could hamper growth are high interest rates, fuel costs and the cost of inflation. Then there’s the issue of staff recruitment and training, which remains challenging for hotels servicing the return of tourists especially after the industry lost nearly 1.5 million front line employees during the covid pandemic.
All told, whilst it’s heartening to see the many green shoots in place, the recovery is extremely volatile and the landscape will remain challenging over the next 6 – 8 months.
