The comments come as the Thai baht depreciates against the US dollar and is about to pass the ฿36 to the dollar mark as the kingdom still struggles to recover its lost foreign tourism industry even though momentum is rising. The World Bank estimates that it will be 2026 before a full recovery is achieved in the sector while the Tourism Authority of Thailand (TAT) is only aiming for 50% occupancy this year for reopened hotels and is aiming for just over 50% of former foreign tourist numbers next year with 22 million visitors projected.
As Thai foreign tourist arrivals begin to climb towards one million visitors a month, a recovery in the badly damaged foreign tourism industry is underway which is imperative for an economy and less well-off people, flailing from the impact of rising inflation, the highest in 14 years, Deputy Prime Minister Anutin Charnvirakul has come out to urge Thai tourism operators to hold firm on their prices and not to offer discounts to incoming holidaymakers. Minister Anutin told a trade event on Monday that the kingdom must brand itself as a premium destination worthy of higher prices, comparing the country’s industry to luxury Louis Vuitton handbags.
Deputy Prime Minister and Minister of Public Health Anutin Charnvirakul, speaking at a tourism promotion event at Suvarnabhumi Airport on Monday, urged Thailand’s tourism trade not to offer low cost or competitive prices to foreign tourists now returning to Thailand as the industry begins to show positive signs of improvement following an easing of regulations over the last few months and in particular, the scrapping of the Thailand Pass pre-approval system from July 1st.
These moves have seen foreign tourism numbers jump nearly fivefold in three months as potential travellers, particularly repeat visitors to Thailand, find the more convenient conditions and the country’s attractions which have made it one of the most popular destinations in the world, a potent draw.
Thailand built its hugely successful foreign tourism sector on cheap sun, beer and entertainment over the last sixty years as air travel also expanded
Thailand has always been seen as a low-cost destination despite its long distance from many of its key markets with the country’s weather, entertainment and hospitality sectors being key strengths that have built up the kingdom’s huge appeal over the last six decades.
The country’s rise as a tourism hub coincided with the mass availability and proliferation of air travel and airline routes with 2019’s record year being very much linked to maximising transport and air travel links.
It should be noted that Mr Anutin’s Bhumjaithai Party also controls the Ministry of Transport in the large coalition government, in power since 2019, where the minister is a Bhumjaithai Party and Buriram province favourite, Mr Saksayam Chidchob.
Deputy Prime Minister urges foreign tourism trade to become a Premium offering and to hold firm on prices
However, on Monday, the emphatic advice from minister Anutin, who has been recently credited with Thailand’s controversial move to legalise marijuana and who made a name for himself for his hawkish stance on introducing and later removing pandemic restrictions, was that the key players in the still damaged and challenged industry should try to avoid offering discounts and package deals to incoming foreign tourists from around the world, at this time.
His comments came as Thailand’s tourism industry is still struggling to recover from the closure of the country in 2020 with the Tourism Authority of Thailand (TAT) recently setting a target of achieving just a 50% occupancy rate for the hotels in the kingdom that have reopened this year after the number of foreign tourists plunged in 2021 by nearly 99% to 421,000 out of a figure seen in 2019 of 39.8 million.
Reopened hotels operating on marginal profitability with an occupancy rate target for 2022 of only 50%
A survey, some months ago, by the Thai Hotels Association showed that 45% were still operating on a financial liquidity basis of 3 months’ operating costs.
The same survey showed that only 19% of hotels generated just half of their normal income while a full 49% of hotels were earning just 30%.
This is expected to improve with the growing strength of numbers now arriving in Thailand.
At the same time, the kingdom has yet only seen 2 million arrivals from January to June this year although arrival numbers are growing impressively with an expected arrivals figure, still to be confirmed, of 821,000 from June 1st to July 3rd last.
Full recovery only seen in 2026 says World Bank
Thailand’s foreign tourism agency, the Tourism Authority of Thailand (TAT) is predicting that the kingdom will see a rebound to half its previous levels in 2023 with 22 million visitors with the World Bank forecasting that it will take a further three years or sometime in 2026 before the sector fully recovers from the damage inflicted by the government shutdowns which have deeply scarred the industry leaving many firms and a significant proportion of its former tourism infrastructure permanently closed.
Nevertheless, on Monday, Deputy PM Anutin was adamant that Thai business operators must change their marketing and business model to a premium one aiming to attract well-heeled and high-spending visitors as opposed to foreign tourists looking for cheap holidays in the sun.
‘We cannot let people come to Thailand and stay because it’s cheap,’ Minister Anutin told the trade event to promote foreign tourism. ‘Instead, they should say ‘because it works, it’s reasonable’, that’s where we can increase value.’
Anutin has been a politician since 1996 and is also a highly successful businessman after saving the family construction firm after the 1997 crisis
55-year-old Mr Anutin, a former Thai Rak Thai Party MP who served as Deputy Minister of Public Health and Deputy Commerce Minister in the government of ex-Premier, Thaksin Shinawatra, from 2004 to 2005 before taking on his more senior ministerial role in 2019 after the Bhumjaithai Party, which he leads, came in 5th in the March 2019 General Election with 10.3% of the vote and 51 seats in parliament, was the President of the Sino-Thai Engineering and Construction Plc, a family-run firm which he successfully took from near bankruptcy after the 1997 Financial Crisis to notable success before going into politics.
After the 2006 coup and the demise of the Thai Rak Thai Party, Mr Anutin was banned from politics in Thailand for five years during which he learned to fly his own aeroplane.
In 2012, he piloted a new aircraft from Cannes in France to Thailand in a week-long journey.
‘When in the skies, I can move the plane to the left or right. It’s total freedom,’ he said at the time, although he highlighted how his training as a pilot has impacted his decision-making process. ‘Though I put it on auto-pilot, I always have to think ahead. If this or that happens, what should I do? I have to be prepared.’
Controversy in February and March 2020 in outbursts against western foreigners or tourists to Thailand
However, in March 2020, at that point, a Deputy Prime Minister and Minister of Public Health, he emerged as less than prepared for an intense backlash when he appeared to attack western foreigners in Thailand still in the country as the kingdom struggled to grapple with the then-impending crisis which put the senior minister in the spotlight following a visit to the northern Thai city of Chiang Mai.
Referring to western foreigners who are known in Thailand as ‘farang’, a term linked to 17th-century French visitors to the ancient kingdom of Ayutthaya, his Twitter account emitted an extraordinary outburst.
‘All you see are farangs. They flee their own countries for the safety of Thailand. In Chiang Mai, 90% of Thais are wearing face masks, although none of the farangs are wearing masks,’ Anutin’s account fumed. ‘This is the reason our country is being infected. We should be more careful of the farang than other Asians. At the moment, it is winter in Europe and farangs come to Thailand to hide from the disease. Many farang dress dirtily and don’t shower. All hosts have to be very careful.’
Later, the minister’s Twitter account was deleted and he appeared to issue an apology while also denying that he was responsible for the incident.
This followed another incident at a BTS station in Bangkok after Minister Anutin became outraged when a European man refused his offer of a free face mask in a promotion by the Ministry of Public Health was running on the transport concourse.
At the time, he threatened to contact foreign embassies in Thailand and have foreigners who refused to wear a face mask removed from the kingdom.
Later, a face mask mandate came into force through both national regulations under the Emergency Decree and local bye-laws.
In recent weeks, Thailand has moved to relax these provisions for outdoor use although both Minster Anutin and Prime Minister Prayut Chan ocha urged the public to continue wearing them with the vast majority of the Thai public heeding this signal as a matter of personal choice as well as many foreigners.
The Bhumjaithai Party, which Deputy Prime Minister Anutin leads, also runs the country’s Ministry of Tourism and Sports which is led by Phiphat Ratchakitprakarn.
Goal is to be a premium foreign tourism offering just like expensive Louis Vuitton handbags says Anutin
On Monday, as he advocated that Thailand pursues a premium foreign tourism strategy instead of the cheap sun and booze mass tourism model that has made the kingdom the fourth most visited destination in the world, Minister Anutin compared Thailand to ultra-expensive and luxury handbag firm, Louis Vuitton.
‘Hold your ground. Sell premium. The more expensive, the more customers,’ he explained. ‘Otherwise, Louis Vuitton wouldn’t have any sales.’
Since entering government, the deputy prime minister has seen his Bhumjaithai Party plummet in the polls to just 2.65% in the latest National Institute of Development Administration (NIDA) poll with a 1.52% vote for its leader as a possible prime minister placing him in tenth place behind a large field of more popular candidates.
This was an improvement for his party on a March poll which had the Bhumjaithai Party at 1.88%.
Bhumjaithai support fell due to its 2019 switch from opposition to a party in an unpopular government
Most analysts attribute the fall in support for the party to its participation in what has proven to be an unpopular government.
This is deeply felt, in particular among ordinary people or the less well off.
There is a feeling the country’s swingeing lock down measures from 2020 to 2021 were too severe causing a large proportion of the economy to collapse particularly in the informal sector, much of which has never recovered.
It should also be recalled that in 2019, the Bhumjaithai Party portrayed itself as a party of opposition to the status quo.
There were also hard questions asked of Minister Anutin in 2021 at the height of the crisis in Thailand over the government’s vaccination programme rollout which, at one point, appeared shambolic when supplies failed to match national demand and the planned schedule.
Even as foreign tourism recovery gains ground, there are still millions of people struggling to recover
Even as the kingdom’s foreign tourism industry and economy enter a mild recovery mode with projections last week to the government suggesting that Thailand will see 9.3 million visitors in 2022 or 7.2 million in the latter six months of the year, these figures are well down on the figures seen in 2019 leaving millions of Thai people in the sector still either unemployed or underemployed with figures in the last few months showing that up to 59.8% of those formerly laid off had returned to work.
Good news from airports as arrivals help offset damage from inflation and supply chain blocks caused by war
The emergency period has shown that Thailand is uniquely dependent on foreign tourism which is also the key engine in the latter half of 2022 as the kingdom faces a severe economic challenge from rampant inflation with a 14-year rate high of 7.66% just confirmed for June and a deprecating baht well passed a 15 year low against the US dollar as it approaches the ฿36 to the dollar range this week.
Thailand is the fourth most popular destination in the world and is seen as a place to relax and unwind
In April, the Visa Global Travel Intentions Study confirmed Thailand as the world’s most favoured destination after the United States, the United Kingdom and India for foreign tourists.
The survey also showed that relaxation was the key benefit sought by foreign tourists when visiting Thailand among 73% of those who planned to visit the country.
Respondents to the survey particularly identified Thailand’s massage industry as a key attraction with 48% suggesting that their holiday goal was to find relief from work and life stress while the remaining 25% identified relaxation through adventure activities in Thailand as the key motivation for visiting the country.