The Covid-19 epidemic has affected everyone on the planet. It continues to do so and will impact the way we live our lives for a long time to come. Some people are fortunate in that they were able to WFH (work from home) although the quality of the work they were able to provide suffered to a greater or lesser degree.
Marketing companies were able to continue operations without too many problems. Educators were able to talk to their students via Zoom or Google Meet… but it hasn’t been perfect… for two years students have suffered from not being able to grow together with their peers, to learn the important social skills that are an integral part of human development.
The hospitality industry, however, does not have a WFH option. It has been decimated by the strictures that had to be imposed in the effort to keep the dreaded virus at bay. Hotels both large and small were forced to close their doors, as were restaurants, cafes, music venues and pubs. Many of these establishments over the last two years have had to shut up shop for good, as at least 80% of their revenue had all but disappeared. Covid-19 has terminated many businesses in the same way that it has terminated lives.
Whenever you think about holidays, and travelling away from your home, the first thing that you think about is where you are going to stay. It’s usually a resort, hotel, or guest house. These businesses have suffered greatly in Thailand over the last two years, and many of the people that work in them have also lost their livelihood… front office staff and receptionists, bellboys and room maids, waiters and waitresses, chefs and kitchen staff. All either furloughed or laid off. Then there are the ancillary workers that support hotels: taxi drivers, tour guides, concessionaires, musicians, etc. In Thailand the tourism industry across the board accounts for up to 30 million jobs, out of a total population of nearly 70 million people, so it is not difficult to imagine the disastrous effect Covid-19 restrictions have had on their lives, and on Thailand.
Tourists, when they visit Thailand see the bright lights of Bangkok, the traffic gridlocked streets, the neon nightlife, the packed beaches, crowded restaurants, glistening golden temples and smiling faces. They think of Thailand as not a lot different from their own country, apart from the always gorgeous tropical climate. But they do not see beneath the surface. In Thailand there is a vast chasm between the rich and the poor.
The minimum national wage in Thailand, set by the government, is about 14,500B per month (322GBP, or 436 USD). So, it might surprise you that Thailand has become known as ‘The Land of Smiles’ because you yourself might find it hard to smile on such an income. Thailand’s citizens, though, are not tourists, and they don’t spend their wages in the lavish way that visitors to their country do, on their much looked forward to annual holidays. Thailand is still very affordable on a cost of living basis, and a Thai family can still have a good life, even if they are on minimum wage. If you get to talk to an expat who has friends or family ‘upcountry’, next time you visit take few days to visit rural Thailand, you will be surprised at what you see. I can guarantee that you will be made welcome in the villages… you are sure to be beckoned along to join a Thai family as they eat together outside their house. Hope you like the spicy food!
The villages upcountry is where most of the workforce in Bangkok come from, and the population of the city was reduced by several million after the onset of Covid in 2019. They all returned home to live with their families, unable to afford the rent or the higher living expenses in the city. Now, though, they are trickling back, and the hotels are happy to welcome their return. These people will have been trained in their various jobs or professions by the hotels, and as soon as they open up again, they will be good to go. As you will know if you have ever stayed in a hotel in Thailand, the staff are service oriented, friendly, always seem happy, and are always ready to brighten up your day with that ubiquitous beaming Thai smile.
The year before the Covid pandemic hit – 2019 – was a record breaker for Thailand and the Kingdom welcomed almost 40 million international visitors. This was reduced to around 6 million in 2020, but as we reach the end of 2021 the country is starting to open again.
We talked to industry expert Khun Marisa Sukosol Nunbakdi about the reopening of Thailand. She is a hotelier and is the current President of the Thai Hotels Association.
Khun Marisa Sukosol Nunbhakdi – President of the THA
Khun Marisa, you come from a family of hoteliers in Thailand, and you are also the current President of the THA. I would like to thank you for taking time out of your busy schedule for this interview. Please feel free to answer as fully as you like. I assure you I will not interrupt you. I am looking forward to gaining the benefit of your experience of the hospitality industry. I would like to ask you a few questions, if I may.
The measures that had to be taken to control the spread of the Covid-19 virus have decimated the hospitality industry. As we reach the point where 50% of the Thai population has received two doses of the vaccine, and Thailand has started to open up to international arrivals again, what percentage of hotels, resorts, and guest houses are likely to reopen, and what changes are we likely to see? In Bangkok, and in other areas.
Khun Marisa: There was hope for good recovery for the domestic market towards the end of 2020. However, when the third wave came, after Songkran, Thai New Year, of 2021 – it resulted in a semi-lockdown that began in July. Many hotels reached rock bottom, and even the larger properties had to seriously review their financial standing. At the time it was estimated that 50% of hotels were closed and an accompanying 50% of the workforce had left the industry.
With the easing of restrictions that began in October of this year, hotels began reopening once more to welcome back domestic tourists, especially those properties in destinations close to Bangkok, such as Pattaya, Hua Hin, and Khao Yai. Now, with the lifting of quarantine restrictions for vaccinated international travellers originating from 64 countries, a lot more hotels are reopening. Although it is still true that even with the relaxation of quarantine regulations, that many hotels in key tourist provinces remain closed, especially those in the 3 to 4 star categories that cater to the group travel sector.
Results of THA’s monthly survey conducted in October showed that 67% of hotels have reopened, while 8% remain temporarily closed. And results have shown that nearly 60% of the workforce in the hotels surveyed are now back in employment.
The established hotel groups such as Accor, Minor, Hilton, and the larger 5 star properties have probably been able to weather the storm, albeit after taking a large financial hit. But approximately what percentage of the smaller hotels or guest houses have not been able to survive in Thailand? And how many in number? In what way were the ones that survived able to carry on? Change of focus? Sale of assets? Diversification?
Khun Marisa: Ironically, the micro SMEs are more agile and resilient. They require less funds to open, as they have less operational costs, and fewer staff. They closed temporarily and can easily reopen once demand returns. Resilience is based on the owner’s reserve of funds, ability to obtain loans, and having the required customer demand to cover fixed costs. Mid sized hotels that are independently owned and operated and carry a sizable staff number were hardest hit due to salary commitments. It was difficult for owners with large debt obligations to survive, no matter the size of hotel. Hotels with such owners have either sold their assets or ceased operations.
During Covid, larger 5 star hotels were able to gain revenue from the domestic market, F&B, meetings and events, and income from long term stays in hotels with built in residences.
Your family are prominent hoteliers of the larger types of property, how did Covid affect your businesses, did you have to close all your hotels? What happened to the staff at these properties? Are your hotels all ready to reopen, and are your staff still available to return?
Khun Marisa: We were hit hard like everyone else. Several of our hotels closed for a couple of months last year during the first lockdown, and again this year from July through to September. Some of our properties transitioned into quarantine hotels. With resizing of our organisation, and with the help and understanding of our staff, with reduction of work hours. We have been able to hibernate through the lockdowns, and were able to open to capture domestic business, when restrictions further eased. Right now, we are open and ready, and can’t wait to welcome back our international guests.
Now that hotels are opening their doors again what are the new protocols, health and safety, etc., going to be within the hotel environment, for both guests and staff? What services and facilities will be available in the superior properties, and what might be missing, during these early days?
Khun Marisa: Universal protocols for Covid-19 prevention such as mask wearing and social distancing must be observed. All hotels that can accommodate international travellers in the reopening phase are required have SHA (Amazing Thailand safety and health administration) hygiene and safety protocols in place and 70% of their staff have to be fully vaccinated. Staff directly serving guests must be fully vaccinated with two doses. Guests can be confident in their safety. All hotel facilities will be available to guests in the early days of opening, including spa facilities and meeting rooms, albeit with protocols in place.
Tourism is an essential part of the Thai economy, and in 2019, before Covid hit, 40 million tourists visited Thailand, accounting for over 20% of the country’s GDP. What can the government and the hotel industry do to persuade people to come back, what incentives can they offer, in order that tourists and businessmen will not choose an alternative destination?
Khun Marisa: Thailand is the first country in SE Asia to open up to so many countries. The message is out that we are vaccinated and are ready. Now travellers are still required to book a one night stay in a hotel where they must stay until an RT-PCR test is conducted and the lab results have come back. They must also buy insurance worth USD50,000 and do an RT-PCR test 72 hours before departure from their own country. The only sticking point right now is the RT-PCR test on arrival. If the test can be changed to an Antigen Test which bears quicker results, more people will come. Thailand has something for every single customer segment; we can cater our offers to meet the needs of specific niche markets: Foodies, Indian weddings, digital nomads, spiritual seekers, even elephant lovers… everyone! Our advantage is that once a tourist comes to Thailand, they will most definitely come back. Before Covid, around 60% of travellers were repeat visitors. So, our aim should also be to attract more first timers to Thailand.
Many reports have been circulated in the press about the ban on alcohol in Thailand. From the beginning of November, in some provinces’ alcohol was once more allowed to be served in restaurants. Until 9.00pm. However pubs, music bars and nightclubs remain closed. Tourists are not likely to return if they feel their freedom is being curtailed. Is the government aware of this, and what can industry associations such as the THA do to help?
Khun Marisa: Yes, the government is aware. Several associations within the industry, including the THA, have voiced our concerns that if alcohol is not permitted, it will hinder the decision to travel to Thailand. Since November 1st, the government has allowed alcohol service in restaurants with SHA certification in Bangkok. That’s a good step. It is understandable that the government wants to be careful about alcohol consumption, which could lead to people congregating in large groups, and creating a fresh outbreak.
Domestic tourism has restarted and is helping to mitigate the impact on jobs and businesses in some destinations. What are the lessons have been learned from this that can be applied to the industry when foreign tourist numbers start to rise once more?
Khun Marisa: In many ways, Thai guests are harder to please than foreigners. They have high expectations, and in the last two years, there was fierce competition for the Thai market, as well. Hotels had to adapt their marketing and service strategies to attract more Thais. A big lesson learned is that we must not rest on a few market segments, hotels must be versatile in adapting services to please more diverse markets.
How important are these early days of Thailand’s reopening? Word of mouth is the best form of advertising, and the opinions and goodwill of the adventurous tourists who are the first to return will be closely looked at by potential visitors to Thailand.
Khun Marisa: Thailand has put in safety protocols for international travellers, such as pre-and post-arrival Covid testing, and insurance. These necessary measures and linking traveller information through the supply chain of hotels and authorities has to be smooth and as convenient as possible for the traveller. They should be aware that if they are tested positive, they have to be quarantined. Managing risks and their expectations will be key to mitigate any complaints. As far as I am aware, most travellers can’t wait to return to Thailand. There is a lot of pent up demand. Making sure arrivals go smoothly to create tourist satisfaction will be everyone’s job. Public and private sectors need to continue to work together to rebuild Thai tourism to be sustainable for the long term.
How long do you think it will take before the tourism and hospitality industry recovers in Thailand, will we ever see a return to the figures we saw in 2019?
Khun Marisa: I am certain we our tourist numbers will reach pre-pandemic levels again; some experts predict this to be as early as 2023. There is still so much growth to be seen, especially in the Asia-Pacific regions with the growing middle class in many countries. This is where air travel is expected see the highest growth in air travel over the coming year. And our other western visitors will be coming back to a country they love visiting. The industry will recover strongly. I am sure of it!