The gaffe this weekend by the Bangkok Midnight Marathon can be explained by a growing fear in Thailand towards expats driven by the Covid 19 crisis. The irony of this, of course, is that Thailand is facing a growing economic crisis being driven in no small part, particularly in employment terms, by the devastation in the tourist sector. As the emergency progresses, the strategic and real economic importance of the expats in Thailand is becoming apparent as the government looks for answers.
On Friday, the Bangkok Midnight Marathon apologised to foreigners and expats living in Thailand after initially barring them from participation in the event. It comes just days after the Minister of Tourism and Sports, Phiphat Ratchakitprakarn, announced an initiative to allow foreigners to avail of holiday discounts throughout the kingdom already being offered to Thai nationals in an effort to boost domestic tourism. The ministry revealed that there are up to 2 million expats living in the kingdom who are currently a key focus as Thailand tries desperately to ward off what one hotelier in Phuket this week has described as a ‘tipping point’ as bank protective measures end in September with many hotels throughout the kingdom facing bankruptcy and the real prospect of mounting job losses on top of those already seen.
The organisers of the Bangkok Midnight Marathon (BMM) on Friday swiftly climbed down from a policy announced online the evening before, which would have seen all foreigners banned from the popular event. The marathon event was first introduced three years ago to boost tourism in Thailand. It is due to be held on December 13th next.
This followed a barrage of online fury from both expats living in Thailand and also from Thai nationals decrying the announcement as unfair and prejudiced.
‘New normal’ marathon specifically excluded foreigners but then made a U-turn on Friday
The race, which is going ahead under strict health restrictions including the wearing of masks and regular fever checks, had been billed by the event organisers as the ‘new normal’ marathon for 2020.
On Friday, race director Boonperm Intanapasat reversed the decision and the Bangkok Midnight Marathon announced that foreigners or expats in Thailand could apply from next Thursday, the 13th August, to run in the race.
However, this precluded them from availing of the ‘early bird’ registration fee at ฿750 which was available until Saturday night meaning an extra ฿200 added to the fee at ฿950.
Race organisers failed to take into account the number of expats in Thailand, this week estimated by the government to be 2 million
Mr Boonperm issued a statement on Friday explaining that the race organisers had made a mistake by ‘failing to take into account that there were many expats here who would want to take part in the race’.
He explained that the organisers had set out to avoid allowing people who have travelled abroad recently to attend the event in order to reduce health risks.
He was adamant that all runners and those who wished to participate in the event, were welcome. ‘Offending this community is the last thing we wanted to do. We love athletes of all nationalities,’ he explained.
Ferocious online criticism from foreigners and Thais alike pointing to stringent state quarantine
Many online critics on Friday and Saturday had explained that foreigners now living in Thailand have not been outside the country since Thailand’s borders effectively closed to incoming passengers at the end of March and those who were belatedly allowed to enter have had to undergo a rigorous assessment before being allowed to fly and on arrival, must enter into 14 days state-supervised quarantine at their own expense to be here.
Fears of growing prejudice caused by the virus
The controversy raised by the marathon’s organisers will only serve to raise concerns further among the expat community in Thailand of a growing nervousness, among the public, towards expats brought on by the present emergency.
This was kick-started earlier in the year when Thailand’s Minister of Public Health, Anutin Charnvirakul, on social media, made a number of references to foreigners particularly westerners in the kingdom which were derogatory suggesting that they were responsible for the Covid 19 virus. He later apologised for one incident and denied responsibility for another.
The current environment has been emphasised by repeated opinion polls showing clearly that the Thai public is firmly set against reopening the kingdom’s border. The basis for such fears and the threat is, admittedly, undeniable.
Tourism Minister announces tourism package aimed at expats living in Thailand on Wednesday
The irony as that the gaffe at the end of the week by the marathon’s organisers comes just the day after the Ministry of Tourism and Sports led by Minster Phiphat Ratchakitprakarn, announced a new scheme to allow expats in Thailand access to a programme of targeted discounts to boost domestic tourism in the country.
The Ministry of Tourism, in its statement on Wednesday, suggested that there were 2 million expats in Thailand.
It has also become apparent, in the last ten weeks, that the government’s alternative quarantine scheme in which foreigners are carefully allowed to enter Thailand under a government-approved certificate of entry is increasingly proving an invaluable boon to hotels in Bangkok and other expat locations participating in it.
Tightening of bank rules on debt repayment may see an avalanche of closures in the tourist sector
There are growing fears that a crunch may be on the horizon for struggling hotels and tourism concerns in September as the Bank of Thailand has ordered that debt repayment moratoriums and specific assistance measures end at that time.
The bank has indicated that debt restructuring on a commercial and targeted basis is its preferred approach as it seeks to uphold the kingdom’s fragile financial markets.
This is driving heightened fears that many hotels may be facing pressure from lender banks after September which could lead to an avalanche of job losses.
Already, as the continued impact of the closure of Thailand’s borders to foreigners continues, the impact on the sector and many businesses such as hotels, bars and restaurants particularly in foreign tourist hotspots, has seen many previusly viable concerns closed down.
Many tourism operators have failed to reopen or having reopened under ‘new normal’ rules have proved now not to be viable.
This has sparked fears that Thailand’s tourism infrastructure could be severely damaged by the pandemic which will, in turn, have long term economic consequences.
Phuket tourism boss explains the problem in real terms. Many hotels will not be able to repay loans
In Phuket this week, Bhuritt Maswongssa of the Tourism Council of Thailand and the General Manager of the popular Patong Resort Hotel, explained the problem from his point of view: ‘Today, nearly all hotels on the island have bank loans. There are only a few hotels that do not have loans with the banks. This leaves many businesses on the island exposed to critical risk from not being able to make loan repayments during the current economic situation.’
Mr Bhuritt, who represents Southern Thailand on the council, speaks of the realities for tourism operators in the popular resort island and the real threat now to the ability of the tourism sector to recover to anything like its former levels of activity. ‘Worse, once these businesses close permanently, hundreds and thousands of employees will be laid off, and that will aggravate the economy even further,’ he said.
Most economic experts agree that at least 8 million people will have lost their jobs by the time the economic effects of the virus crisis has flared through the economy and that is assuming some sort of recovery at the end of the year or the beginning of next year.
Many feel the figure will be as high as 10 million.
Hotels in Phuket trying to get into the alternative quarantine scheme which has proved a success
The tourism sector leader and hotelier acknowledged that up to 16 hotels on the island are currently in the queue for participation in the alternative quarantine scheme while only 3 hotels in Phuket were currently participating.
The scheme has proved a success but has been limited through lack of rooms but also in the ability to process visitors and administer it while ensuring health safety standards.
He said he believed that the programme was a tangible benefit to tourism efforts as many incoming foreigners were also interested in extending their stay afterwards into their first holiday in Thailand following their long-anticipated return.
30% of tourism operators already closed for good
Mr Bhuritt estimated that already 30% of tourism operators had closed their doors for good but warned that a dangerous ‘tipping point’ is now approaching that required urgent government action.
‘The tipping point is all the businesses now facing problems making repayments to banks, because hotels and other businesses simply do not have the money to pay back the loans,’ he pointed out.
‘This will of course directly affect all the staff at these businesses who will become unemployed.’
Mr Bhurrit said that many hotels will end up being mothballed after banks foreclose and will, therefore, be unlikely to earn money again, a situation, he said, that makes no sense.
Losses in foreign tourism earnings to Thailand’s economy creeping up towards ฿2 trillion
The tourism minister, Mr Phiphat, revealed this week that the number of foreigners entering Thailand in the first half of 2020 was 6.7 million visitors with 91% of these having already arrived by the time the kingdom shut down international flights at the beginning of April.
Even under the most optimistic scenario, Thailand now stands to lose at least ฿1 .5 trillion in cash flow from the economy this year but the current situation now risks this figure creeping higher. Some leading financial institutions and analysts are predicting a loss of ฿2 trillion or nearly the equivalent of last year’s total earnings.
Yet, outside of Thailand, the pandemic still rages while all governments, not just in the kingdom, but throughout the world are, at the advice of medical experts, insisting that travel controls and restrictions must be kept in place.
This may be the same all over the world but few have the same reliance on tourism income that Thailand, as an economy, does.
Tourism promotion aimed at expats living in Thailand may generate ฿10 billion in income
The promotion launched by the Minister of Tourism, Mr Phiphat, is part of an effort to help the struggling sector recover in the third quarter of the year.
It is estimated that the promotion which involves giving expats a promotional discount card may generate ฿10 billion, less than half a per cent of what Thailand stands to lose this year due to the collapse of an industry that was once described as the jewel in its economic crown.
This was due to its unique ability to most efficiently and effectively create immediate employment and inject foreign funding into the economy at the level where it is most needed, supporting small business operators and the low paid.
Proposal to eliminate dual pricing at tourist facilities and attractions throughout the kingdom
The Tourism Authority of Thailand and the Minister of Tourism and Sports are also preparing proposals for the government to end the dual pricing systems used by many tourist facilities and visitor attractions throughout Thailand which have seen foreigners charged often up to 10 times the entry price of Thai nationals.
‘I’m planning to discuss offering expatriates the same price as locals with Prime Minister Prayut Chan-o-cha, providing them an equal chance to visit tourist sites such as national parks and temples,’ Mr Phiphat said during the week, announcing the initiative.
However, it should certainly not be assumed that such a measure will be approved by the government as a dual pricing policy in Thailand’s health system was, last year, initiated and orchestrated in the Thai public hospital system by the government and a similar regime extended to private hospitals. This was on the basis that subsidised health care by the state should not be made available to non-nationals at the same price.
Similar arguments can be made for Thai tourist facilities and in respect of Buddhist shrines.
In relation to both medical care and popular visitor attractions, the extra income generated by foreigners is essential and cannot be replaced so easily.
It certainly will not be popular politically given the current public mood.
It should also be noted that there is a difference between foreign tourists and expats.
‘Tourism businesses are likely to go bankrupt’
The stakes could not be higher right now for Thailand’s tourism industry and the operators that underpin it.
Mr Bhuritt in Phuket puts it starkly as he calls for urgent and proactive government action: ‘We need the government to make a deal with the banks in order to help hotels and other tourism-related businesses on the island. If this does not happen, many hotels and tourism businesses are likely to go bankrupt.’