The collapse of Thailand’s foreign tourism industry since April 2020 has seen Thailand, a country already experiencing a lower than normal growth level, become the ‘laggard’ economy of Southeast Asia. Hence the scrambling of efforts this week, during a worsening virus outbreak, to try to save the Phuket Sandbox and the Samui Plus initiative which are seen as the road back for the kingdom’s vital foreign tourism industry without which its economy cannot hope to recover.

Thailand recorded 178 deaths from COVID-19 on Saturday, a record with 18,912 new infections, another record as the country’s struggles to cope with a virus outbreak that may not peak for weeks to come. At the same time, foreign tourism industry chiefs are struggling to keep alive two pilot projects heralded at the beginning of July as Thailand’s path back to recovery but which are increasingly seen as in peril as the COVID-19 menace bears down upon them. The Phuket Sandbox, described this week as the ‘fortress’ of Thailand’s foreign tourism hopes, has been credited with moderate success and it is reported officials in Thailand, at the highest level, believe that its survival is critical as its suspension may damage the country’s foreign tourism prospects further and its ability to recover a key element of the kingdom’s economy which it needs to survive.

Tourism Authority of Thailand Governor Yuthasak Supasorn has described the Phuket Sandbox as a ‘fortress’ for the kingdom’s ambitions to eventually fully reopen its foreign tourism industry which has ruptured the country’s economic prospects since April 2020. Economic experts are surprised at the damage inflicted to Thailand’s economy since the pandemic began which is far greater than that seen by its peers in Southeast Asia.

The Governor of Phuket, Narong Woonsiew, has insisted that the Phuket Sandbox on the island will continue despite a rise in infections and just days before it is to be sealed off from incoming visitors from the rest of Thailand.

The assurance comes amid a fall-off in numbers for the scheme which will be now lucky to achieve 14,000 visitors this month and concerns being expressed by the Tourism Authority of Thailand Governor, Yuthasak Supasorn, that Thailand’s rising level of infections and the spiralling outbreak is impacting efforts to market the Phuket Sandbox to foreign tourists abroad. 

A note of confidence was struck by Surat Thani’s Governor Wichwut Jinto on Friday when he said his province would continue to welcome visitors from Phuket.

It comes as public health officials on Ko Samui are reporting a virulent cluster linked to several nightspots including the Speedy Lounge & Bar on Lamai Beach and a venue called the Black Bamboo Club which has unfortunately spread out across the island.

Samui Plus scheme is a disappointment with less than 100 bookings, more have come from foreign tourists moving off Phuket to other destinations

However, they are also noting that most cases do not show severe symptoms. More than 70% of the population on the island had been vaccinated before the pilot project began. So far, Samui Plus has shown very disappointing results with less than 100 visitor bookings and 78 arrivals through the programme.

A short-lived relaxation in the Phuket scheme which, it is understood, has already been put on hold, would have allowed visitors who flew into Phuket and stayed for over 7 days to travel onwards to Ko Samui.

Those who journeyed from Phuket after the 14-day mandatory period expired, had, in fact, generated 158 visitors to the island in the same timeframe, a positive pattern that has not been lost on tourist chiefs.

Ko Samui scheme breaches the initial limits set for a review of the pilot project to be carried out

Over the last 3 days, the island of Ko Samui has seen 99 cases detected, well above the threshold required for a review of the scheme and to trigger restrictions to be put in place.

The bad news comes after a visit to the island by top policeman ‘Big Joke’ or Police Lieutenant General Surachate Hakparn who has been assigned a role by Royal Thai Police headquarters to monitor security arrangements for the schemes and to bolster the morale of personnel at key control points.

Thai officials at the highest level want to see the Phuket Sandbox scheme preserved as a foothold

Despite the unprecedented levels of infection and deaths which have overtaken the kingdom leaving Phuket as the only yellow zoned area in Thailand, the cabinet and the prime minister are still committed to keeping the pilot projects on course although the position with the Samui Plus pilot is now looking exceedingly shaky.

Many independent observers see some signs of success with the Phuket scheme while it is thought that a cancellation or suspension of the pilot projects will do irreparable damage to Thailand’s short term and medium prospects of reigniting its out of action foreign tourism sector.

Officials are working feverishly to save the two key pilot projects launched in July and which were seen as the first step for the essential relaunch of the industry.

The surge in infections, however, is worrying public health officials.

The plan under the terms of the Samui Plus scheme to allow visitors to travel onwards to other islands after seven days has already been shelved.

Dr Weerasak Lorthongkham of Ko Samui Hospital has spoken publicly about the need for more hospital beds given the trend that is now emerging on the island.

Chaotic start to Phuket Sandbox but it has achieved credible results in its first month after tweaks

On July 1st, Thailand launched its Phuket Sandbox scheme to a chaotic start and a troubled opening week when 13 quarantined visitors asked to be flown home but after some tweaks, the scheme settled into credible booking levels although a recently raised target of 18,000 visitors for July now appears unattainable.

On July 29th the scheme had seen 12,395 arrivals with 30 of these testing positive for COVID-19 as part of the government’s testing programme and being placed in quarantine.

Thailand’s dependency on foreign tourism as an economic driver has been confirmed by this pandemic

Economic data since the beginning of 2021 has alarmed government officials both as to the country’s extreme reliance on what is perhaps, even ahead of Spain, the biggest foreign tourism industry in the world and also the fact that since Thailand closed its borders overnight on April 5th 2020, the sector has been dormant with consistently low levels of arrivals at less than 1% of the figures seen in 2019.

Meanwhile, there is also news from Phuket where Governor Narong Woonsiew has ordered the province fully sealed off from those entering from the rest of Thailand from Tuesday, August 3rd.

Phuket ‘fortress’ sealed off from Tuesday by order of the Governor of Phuket Narong Woonsiew

The unprecedented step comes as Phuket has been described by the Tourism Authority of Thailand (TAT) boss as a ‘fortress’ representing the last area in the country where the virus is still under control but also representing the last hope or aspiration for Thailand’s foreign tourism industry in the short term.

Those allowed onto the island from Tuesday will be limited to essential transport workers, students and emergency service medical workers delivering badly needed supplies. Even these will all be required to show evidence of being vaccinated and have a negative COVID-19 test at the heavily guarded crossing points onto the holiday island.

In recent days, Governor Narong has strongly defended the Phuket Sandbox scheme and the importance of ensuring it carries on while there has been, understandably, a more cautious line from public health officials on the island.

Public health officials on Phuket have sounded a more cautious tone about the future of the Phuket Sandbox

The Department of Disease Control Director-general on the island, Dr Kajornsak Kaewjaras, has announced that the situation in Phuket must be kept under review for the next two weeks and, at that point, a decision may have to be made as to its viability or not.

The rise in the level of concern for the scheme has come after the Department of Disease Control reported no less than 148 cases of COVID-19 on Phuket over the past week.

These infections have been caused primarily by Thai nationals who have entered Phuket from other provinces in flight from more stringent lockdown measures in the kingdom outside Phuket, many of them also seeking work within the tourism industry on the island which has seen some pickup.

Nine clusters spreading infection in Phuket says Department of Disease Control chief on the island

Dr Kajornsak assured reporters in recent days that all current infections can be tracked but pointed out that there are nine infection clusters linked with the 148 detected cases.

‘In this respect, the province has succeeded in tracking down all infected visitors and preventing transmissions from spreading to communities,’ he explained. ‘Currently, there are nine active infection clusters in Phuket and all infected people from the clusters have now been quarantined.’

He praised local businesses linked with the Phuket Sandbox scheme for their cooperation. ‘The DDC will wait for two weeks to assess whether local quarantine facilities will have enough capacity to accommodate any new patients.’

Public health facilities running at 36% capacity on Phuket, 80% is the red line set by the CCSA

He suggested the public health service on the island is running at 36% of capacity which is short of the critical level set by the Centre for Covid-19 Situation Administration (CCSA) spokesman and deputy spokesman at the Ministry of Foreign Affairs, Dr Natapanu Nopakun, at the outset of the scheme on June 22nd last when he outlined the conditions under which the Phuket Sandbox might be restricted or cancelled.

At the time, he cited conditions such as 90 cases per week, widespread distribution across all three districts, loss of traceability and hospital capacity being used up to 80% as circumstances that would automatically trigger a review of the scheme.

This is not yet the case according to Dr Kajornsak.

Spiral of infection on Ko Samui is relatively more serious as TAT governor says action may be taken

The spiral of infection numbers on Ko Samui looks like it will see the situation there being reviewed.

Already the flow of tourists from Phuket has been cut back while demand for the scheme remains extraordinarily weak with less than 100 applications.

The Governor of the Tourism Authority of Thailand said on Thursday, after discussing the situation with local officials, that if the number doubles over the coming days, then action may have to be taken.

This could range from cancelling or curtailing the existing sealed routes and limiting visitors to smaller areas, their hotels or moving them to area quarantine facilities as well as shutting down the pilot altogether. 

Tourism chief on the island accepts that a review may be needed but says that infections are of local origin

This was confirmed by the President of the Tourism Association of Ko Samui, Mr Ratchaporn Poolsawadee, who highlighted that none of the cases so far on the island were severe.

He said, nevertheless, more hospital spaces were being readied including the redevelopment of ‘hospitels’ to cope if the outbreak continues or worsens.

He did confirm that if cases reach 40 in two weeks that the plan will be revised.

This has already been shattered by the latest developments with 40 cases alone in just one day and a three day total of 99 cases having been detected.

The tourist industry leader accepted that stringent tightening measures could be taken including the cancellation of the scheme but appeared to still be holding out hope pointing out that these new infections were not caused by incoming foreign tourists.

‘The plan is still to reopen because most new cases were locals, not foreign travellers,’ he insisted.

Tourism Authority of Thailand’s Deputy Governor for Asia and South Pacific Chattan Kunjara Na Ayudhya would only say that the current situation must be closely monitored.

Officials are hopeful that the situation in Phuket may improve as defence of the sandbox is mounted

Back in Phuket, after consulting with Governor Narong Woonsiew, the Tourism Authority of Thailand (TAT) Governor Yuthasak Supasorn was holding out hope that the infection trend on the island may improve.

 ‘After a discussion with the provincial governor yesterday, the province will not stop the Phuket Sandbox. But we have to stay on high alert and try to decrease daily infections over the next seven days to allow the programme to sustain in the long run,’ he explained. ‘We have to keep this fortress steady as the province is a test run for other destinations. For example, Samui has most of its international visitors flying from the Phuket Sandbox, rather than its Samui Plus model.’

Thailand’s worsening COVID-19 situation impacting marketing efforts for the Phuket pilot scheme abroad

The TAT boss also revealed that international coverage of Thailand and the deteriorating COVID-19 situation in the kingdom was now adversely affecting efforts to promote the Phuket Sandbox.

This may explain the failure of the scheme to keep numbers rising and achieve a higher target for its opening month in July with indications that demand is falling off. 

Occupancy rates at a minority of hotels that are open only at 10% with income generated of ฿500 million to ฿600 million but many have not benefitted

The island, so far, has only seen occupancy rates among a minority of hotels that are open for the scheme at just over 10% while income generated from the pilot projects is estimated to be somewhere between ฿500 million and ฿600 million, a significant figure for a flattened industry seeking hope but far off the estimated ฿2.5 trillion that Thailand will lose this year between a 99% wipeout of foreign tourism earnings and a 50% reduction, so far also, for domestic tourism activity in the opening five months of the year even before the impact of the cataclysmic outbreak that saw numbers surging from mid-June driven by the Delta variant of COVID-19 is factored in.

‘We have to work two times harder to convince the international community that Phuket is safe for travel, which is difficult when Covid-19 cases are peaking nationwide,’ explained Governor Yuthasak.

Domestic tourism is now also in a nosedive

On the domestic tourism side, he predicted that things were also taking a nosedive.

‘Prior to the pandemic, Thai travellers took 10 million trips per month on average, but the first five months of this year saw only 23.6 million trips being made,’ he disclosed.

‘If the country needs longer than three months to control the situation, the number of local trips could nosedive to 50 to 60 million as market recovery will need a full month after lockdown to settle, and it’s too difficult to offset those losses in the final quarter alone.’

Phuket sandbox seen as a critical foothold which has helped to restore some confidence and momentum

However, many within the government at cabinet level, as well as the prime minister and Thailand’s top tourism officials, appear anxious to preserve the Phuket Sandbox which achieved some success and built up confidence outside the kingdom. 

This has been seen as a foothold from which to build a recovery of the kingdom’s vitally important industry.

Economists now clearly see that Thailand cannot hope to witness economic growth of any consequence or any sort of recovery in the short and medium-term without foreign tourism.

This was confirmed by Pornthip Hirunkate, Vice President of the Association of Thai Travel Agents who said the scheme had started to achieve momentum in Europe, the United States and Middle Eastern markets even during these challenging times.

Tourism industry leaders in Phuket braced for the worst but are still hopeful that the pilot can carry on

Tourism leaders on Phuket are well aware of what is at stake and can only monitor the situation particularly as the politics surrounding the issue are never far off with increasing rumblings of discontent on the island whose schools remain closed and which has seen creeping lockdown measures despite its special and now under fire status as a haven for foreign tourists.

‘We’re entering a tightening mode and reducing local activities on the island, but we have several circuit breakers in place before there’s a suspension to the reopening programme,’ revealed Thaneth Tantipiriyakij the President of the Phuket Tourism Council. ‘With the surge in infections, our focus right now is to assess the situation day-by-day and week-by-week.’

He said this may include some later restrictions on the movement of tourists on the island in stages right up to a suspension of the scheme.

Mixed and turbulent feelings within Phuket particularly among smaller business operators and entrepreneurs left out in the cold with chronic poverty

While the Phuket Sandbox has been a boon to many hotels and credited with boosting confidence, among far more tourist-related concerns at the lower end of the industry, it has come to be regarded with a high degree of scepticism even before it commenced on July 1st when bars and the entertainment industry were ordered to remain shuttered.

Many operators involved with the nightlife and entertainment industry on the island as well as informal workers and entrepreneurs are less than happy with not only what they see as the disappointing outcome of the scheme itself but the support they have received from the government in Bangkok since the onset of the pandemic in April 2020 which has destroyed the once-thriving business environment on the island.

Rumblings at a grassroots level threatens to find a political voice as poverty remains widespread

They suggest that the income derived from the scheme has benefited a select few at the higher end of the foreign tourism market and not filtered into the wider industry that supported it on the island when it drew 1 million visitors per month and represented 25% of Thailand’s overall foreign tourism earnings.

The grumblings at grassroots level are so pervasive that voices are calling for some sort of political representation or protest to the government in Bangkok to be undertaken on an island that has hitherto not been known for such activity.

The poverty generated by the closure of the industry has hit Phuket so hard that in March 2020, Deputy Governor Pichet Panapongin, in an address to a public meeting, revealed the average salary on the island was below the Thai poverty level at ฿2,000 per month.

Thailand’s collapsed tourist industry has left its economy as the weakest in Southeast Asia

A top Thai economist, Dr Somchai Pakphaswiwat, highlights that the closure of Thailand’s foreign tourism industry has left the country as the weakest economic performer in Southeast Asia excluding Myanmar which is in a state of civil war following February’s military coup.

Another top economist, this week, confidently referred to the kingdom’s economy as a ‘laggard’.

Dr Somchai points out that while other countries have had outbreaks which are larger and more severe than Thailand, the economic damage inflicted on the kingdom has left it reeling and in a shockingly weak position.

‘Among the ASEAN countries Despite having as many infections as ours, it can be seen that in terms of GDP growth rate this year (2021), Thailand is the last one,’ he pointed out this week.

Even with fewer deaths and infection levels than many of its peers, Thailand has fallen quickly to the bottom

Commenting on Thailand’s 6.1% GDP contraction last year, its 2.6% decline in the first quarter of 2021 and its continued economic woes throughout the year, he compared this to other countries.

Vietnam grew by 6.6% in the second quarter following a 4.5% gain in the first three months of 2021 while even Indonesia, in the throes of a far deadlier outbreak, is on target for 4% GDP growth this year.

This is despite its death rate being at 7.56 per million on a daily basis compared to Thailand’s 1.69 on the 27th of July.

A dead mother beside her children and a taxi driver who slept, show us a nation riven by an extended crisis

The economist agrees that the Phuket Sandbox is, strategically, extremely important to Thailand’s efforts to revive its failing economy having achieved up to forty international flights into the island per month.

However, Dr Somchai predicted that it will be 2024 before Thailand sees normality, to its fullest extent, return to the kingdom’s foreign tourism sector.

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Further reading:

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Big joke and top officials shore up the Sandbox tourist initiative on Phuket which begins to shows promise

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