The rising emergency and disruption to prospects for tourism come amid plummeting consumer and business confidence as the overall Thai economy has been hit with a record high consumer price index for February and faltering business activity.
Thailand’s tourism promotion agency will be attending a fair in Moscow over the coming days to drum up more tourism activity between the kingdom and Russia. Officials from the tourism promotion agency’s Moscow office will be attending the Moscow International Travel & Tourism Exhibition from March 15th to 17th even as stranded tourists in places like Phuket and Ko Samui have experienced difficulty in paying their bills. The ongoing war in Ukraine has led many senior figures within the foreign tourism sector across the country to emphasise that the kingdom remains a neutral party to the conflict with calls for Thailand to explore its payments infrastructure which has been found to be at the mercy of western sanctions.
Thailand’s tourism supremo and Tourism Authority of Thailand boss, Governor Yuthasak Supasorn, has cautioned that foreign tourism numbers may be off by 30% in the first quarter of 2022 due to rising inflation and global insecurity caused by the war in Ukraine.
It comes as there is an emergency within the kingdom with nearly seven thousand stranded Russian tourists who are facing extreme difficulty in making payments due to swingeing trade sanctions imposed by western countries on the Russian economy including its transport and financial sector since the war was declared on February 24th last.
Many Russians staying long-term in Thailand as the Tourism ministry scrambles to assist cut off tourists
Figures just released by Thai authorities show that there are, in fact, upwards of twenty thousand Russian nationals in Thailand but, according to the Ministry of Tourism and Sports, only 6,577 are tourists.
Officials are currently coordinating a response to the emergency which is centred on Phuket, Krabi, Pattaya and Ko Samui which is home to the majority of foreign tourists from the Russian Federation whose armed forces are currently bogged down in its invasion of Ukraine.
Some Ukrainian tourists and visitors also require assistance from authorities in Thailand as normal travel and commercial facilities have been disrupted with both countries suffering from the fallout of this war.
Visa and Mastercard have suspended operations in Russia while flights were grounded last week
Officials with the Tourism Authority of Thailand and the Tourism Ministry are dealing with key problems which have arisen namely people who have found that they cannot access flights to return home either to Russia or Ukraine as well as tourists and visitors who have found it impossible to make payments or access basic financial facilities.
Russia’s financial system, as well as its international flight network, was very much dependent on international systems.
This has meant that the precipitous action by credit card firms such as Visa and Mastercard to suspend operations in the country and the severance of Russian banks from the international financial systems controlled by the West has very painfully impacted the Russian economy and most acutely its nationals holidaying or living in Thailand.
US advises Americans not to travel to Thailand
The challenge for Thailand’s tourism promotion agencies and planners appeared to become even more testing this week when the US Centers for Disease Control and Prevention issued an advisory urging Americans to avoid travel to Thailand.
The top medical authority raised the country to Level 4 or Very High-Risk status concerning the disease.
Thailand plans to end the COVID-19 emergency in the kingdom by July 1st by declaring the disease endemic.
Thailand moving to scrap all tourist restrictions this year once the Covid virus is declared endemic
This move should, according to Minister of Tourism and Sports, Phiphat Ratchakitprakarn, be followed by the scrapping of all restrictions and conditions for entering the country by tourists.
Tourism chief Yuthasak not worried about new warning to potential US tourists based on experience
Nevertheless, the rates of infection for the virus have remained persistently high, a situation also seen in some other countries in the region such as Hong Kong where authorities in the now Chinese controlled city have been faced with thousands of deaths in recent weeks.
The American advisory pulled no punches: ‘If you must travel to Thailand, make sure you are vaccinated and up to date with your Covid-19 vaccines before travel. Even if you are up to date with your Covid-19 vaccines, you may still be at risk for getting and spreading Covid-19.’
In response to the move, Mr Yuthasak of TAT indicated that, from previous experience, he thought US holiday makers visiting Thailand, particularly those who are vaccinated, would not be deterred.
Survey shows hotels, on average, up to the Ukraine War on February 24th had only 30% occupancy
The latest crisis for the industry, indeed Thailand’s economy and the wider world, comes as the Thai Hotels Association released a survey of its members carried out just up to the day before the invasion of Ukraine on February 24th last.
It showed that hotels in Thailand had only seen a rise in occupancy to 30% since the country’s wider reopening to foreign tourism on November 1st last.
There were more positive signs in January when that figure rose to 34%.
The President of the body, Marisa Sukosol Nunbhakdi, explained that only 20% of hotels in Thailand specially cater to foreign tourists who accounted for more than 50% of their guests.
Throughout the pandemic crisis, however, since 2019, we have seen that Thailand’s domestic tourism market appears to follow trends linked with its international market.
Thailand’s consumer confidence falls in 2022 with a historically high consumer price index in February
The domestic tourism market has also been impacted by rising inflation since January with figures just released showing consumer confidence in Thailand at a 5 month low due to rising oil prices which rocketed after the invasion of Ukraine.
The index fell to 43.3 in February from January when it stood at 44.8. It fell also in January from December’s figure of 46.2.
The index signifies severely weakened purchasing power by Thai consumers.
Thailand’s consumer price index for February 2022 reached a historic high for the country at 104.1 although it fell during the COVID-19 crisis before the country’s economic recovery began late last year.
The Thai Hotels Association survey shows that 82% of hotels are still far behind their financial performance in 2019 with 51% experiencing a tightening of financial liquidity after January this year.
Tourism industry emphasises that it is neutral in the war between Russia and Ukraine despite UN vote
The interruption to Thailand’s tourism economy by the war in Ukraine is not being taken lying down by Thai officials who have been quick to emphasise that Thailand is neutral in the conflict.
It has been pointed out that despite the Kingdom’s surprise vote to censure the Russian Federation for its invasion of Ukraine at the emergency UN General Assembly meeting in New York on March 2nd, Thailand has not participated in imposing sanctions on a country it enjoys friendly relations with.
Reacting to the crisis unfolding, this week, for Thailand’s Russian visitors, Mr Yuthasak, the TAT boss, told tourism operators that everything must be done to accommodate the kingdom’s visitors from Russia because there are more coming.
‘We have to be good hosts and take care of everybody,’ he declared. ‘There are still Russian tourists on their way here.’
Frantic efforts to assist Russian tourists with the ruble losing 70% of its value since the invasion began
This comes despite the suspension of international flights by Aeroflot and other carriers which flew into Thailand up to last weekend and the Russian currency, the ruble, losing up to 70% of its value since February 24th last.
Frantic efforts are believed to be underway to link the ruble and Russia’s banking network to Chinese financial systems as well as efforts to use cryptocurrencies as a medium.
Tourists from Russia were the largest contingent of foreign tourists entering Thailand in January 2022 with 23,760 arriving here compared, for instance, to 9,712 from the United Kingdom and 7,315 from the United States.
The numbers from Russia increased dramatically from November.
For last year, Germany accounted for the highest number of visitors to Thailand at 45,874 visitors followed, in order, by the United Kingdom and the United States. Russia, however, sent 30,759 foreign tourists last year, accounting for 7.2% of the market.
Russia sends more foreign tourists to Phuket than any other country says Phuket Tourist Association
The importance of Russian visitors is particularly acute in Phuket where the country is the resort’s largest market, according to Bhummikitti Ruktaengam, the President of the Phuket Tourist Association.
Mr Bhummikitti led last year’s campaign to reopen Phuket early to foreign tourism in a programme that became known as the Phuket Sandbox.
‘Russia has contributed the most tourists to Phuket of any country since last October. Losing this market will have an inevitable impact on the industry,’ he warned this week.
It comes as Thailand’s tourist promotion bodies have launched a concerted campaign not only to find payment arrangements for stranded Russian tourists here through Chinese gateways such as Union Card and provide cheaper temporary accommodation for those in need while organising flights back to Moscow.
The tourism promotion body TAT is also redoubling efforts to expand its foreign tourism trade with Russia at a time when the country is being shunned by the western world and corporations.
Top Thai tourism agency confirms that the country will be participating in Moscow trade fair this week
On Monday, Chattan Kunjara Na Ayudhya, the Tourism Authority of Thailand (TAT) deputy governor for Europe and the Middle East, gave a presentation to the Phuket Tourist Association highlighting efforts in Russia. The webinar was titled: ‘The Landscape of Tourism: Russia Case Study’.
In it, he warned that bookings have declined from Europe because of the war and that cancellations had also been seen particularly from Eastern Europe.
He confirmed that the Tourism Authority of Thailand would be participating in the Moscow International Travel & Tourism Exhibition from March 15th to 17th through its Moscow office.
The Director of the Tourism Authority of Thailand (TAT)’s Moscow office, Khanittha Phanworawat, along with Thailand’s ambassador to Moscow, Sasiwat Wongsinsawat, also appeared to be working positively towards the goal of attracting more Russian tourists to Thailand.
5.5 million affluent Russians targeted by Thailand
Ambassador Sasiwat highlighted that there are 5.5 million Russians who earn more than 100,00 rubles a month and these were the target of the kingdom’s efforts.
He also noted that last year, 6,500 Russians had applied for long term visas to stay in Thailand.
Highlighting Thailand’s neutrality in the conflict, the Tourism Authority of Thailand (TAT) boss in Moscow, Ms Khanittha, drew attention to a recent advisory from the Federal Agency for Tourism in Moscow which advised Russian nationals to holiday abroad in a country that had not sanctioned Russia and named NATO member Turkey, the United Arab Emirates, Egypt and India as examples.
Phuket tourism boss wants to see cryptocurrency options for tourists and links to Russia’s Mir system
In Phuket, the Phuket Tourist Association boss Mr Bhummikitti, meanwhile, called on authorities in Thailand to look into the possibility of using cryptocurrencies to facilitate payments by foreign tourists to the kingdom.
At the beginning of 2022, the Bank of Thailand suggested that, in principle, it stood opposed to allowing the use of cryptocurrencies for payments of goods and services in Thailand and in mid-December 2021 promised a policy and framework to ensure this while further regulating the growing Fintech industry.
Officials are concerned that a rising crypto-asset trend poses a real threat to Thailand’s financial stability
The central bank warned widespread use of cryptocurrency for payment purposes risked destabilising the Thai economy.
Tourism chief has long promoted cryptocurrency projects to prime and extend the country’s earnings
The Governor of the Tourism Authority of Thailand (TAT), Mr Yuthasak, has long promoted the use of cryptocurrencies by foreign tourists to Thailand as a way forward for the kingdom and last year, outlined plans for an ambitious online platform to do so.
Tourism Authority of Thailand (TAT) in pursuit of an online metaverse and cryptocurrency strategy very much divorced from the existing industry
Amid the confusion in Phuket as Russian tourists struggle to make payments, tourism chief Mr Bhummikitti called for Thailand’s financial system to do more to assist Russian holidaymakers whose credit cards had failed because of western sanctions.
Concern that international payment systems for tourists in Thailand are too western-centric at this time following Russian chaos on the beaches
He suggested that Thai financial authorities find a way to access the Russian MIR system, a financial network established in 2017 by the Central Bank of Russia and operated by the Russian National Card payment system.
Such a move would require Thailand to look at its financial payment systems which are still dominated by western networks despite the presence in the kingdom of Chinese payment gateways and facilities which have suddenly found themselves in great demand in Phuket, Pattaya and Ko Samui, in recent days, as Russian tourists try to settle their bills while cash-starved Thai hoteliers and tourism concerns attempt to improve their liquidity.
In the meantime, the war and bloodshed continues in Ukraine with many analysts now suggesting a protracted struggle that could last up to three years as the small nation and its populace fight an all-out war for the country’s right to exist.