Tourism veering from bad to worse

Tourism veering from bad to worse

Airlines, hotels struggle amid crisis

Aircraft of Thai AirAsia and Thai Airways International are parked at Suvarnabhumi airport. The Civil Aviation Authority of Thailand reported that number of domestic passengers stumbled 27.1% year-on-year in the fourth quarter, while international flights dropped by 99.1% during the period. (Photo by Wichan Charoenkiatpakul)
Aircraft of Thai AirAsia and Thai Airways International are parked at Suvarnabhumi airport. The Civil Aviation Authority of Thailand reported that number of domestic passengers stumbled 27.1% year-on-year in the fourth quarter, while international flights dropped by 99.1% during the period. (Photo by Wichan Charoenkiatpakul)

Airlines and hotels dubbed the tourism situation this year as being a worse crisis than the first outbreak of the pandemic, leaving them to cling to the hope of a remedy from the government.

Tassapon Bijleveld, executive chairman of Asia Aviation, the largest shareholder of Thai AirAsia (TAA), said when international tourists return in the future, Thailand might not have enough supply to serve them as most operators have already shut down due to financial problems.

Unlike the hotel business that saw 6 million room nights in the stimulus campaign fully redeemed, the air ticket quota of 2 million seats still has over 1.3 million seats available, even though the government increased the subsidy from 2,000 baht to 3,000 baht in December.

Mr Tassapon said those figures proved that local tourists skipped flying and shifted to destinations within driving distance, particularly after the fresh wave of Covid-19 starting from December.

Combined with lower purchasing power and travel restrictions in some areas, all airlines will see an even more opaque future as the industry already witnesses fewer flights per day at the moment, he said.

The Civil Aviation Authority of Thailand reported that the number of domestic passengers tumbled 27.1% year-on-year in the fourth quarter, while international flights dropped by 99.1% in the period.

TAA is now only operating 20 flights per day on average with just 10 aircraft, down from 40 jets prior to the second outbreak, while it has a total of 62 in the fleet.

"Not only are airlines facing an impact, but half of the restaurants and shops in Don Mueang airport have had to close temporarily which could indicate the lower level of consumption," said Mr Tassapon.

He said all of airlines may have to wait further for the soft loans under the supervision of the Export-Import Bank of Thailand (Exim Bank) as the government is likely to push aside this proposal until the no-confidence debate this week passes.

"We really have no idea about the details of the proposal from Exim Bank and don't know when the cabinet will mull this issue. It's like we're walking with blind eyes during the crisis now," said Mr Tassapon.

TAA suspended 75% of its workforce this month, offering most of them a leave-without-pay option, as it still hopes the situation will improve in the future. But he admitted that it's hard to give any forecast right now.

The tourism outlook for this year faces dimmer prospects again as the National Economic and Social Development Council on Monday predicted that the number of international tourists will plunge by half to 3.2 million compared with 6.7 million last year, down from an earlier estimate of 5 million.

Marisa Sukosol Nunbhakdi, president of the Thai Hotels Association, said the crisis this time is more difficult to deal with as it's hard to predict when business can get back to normal.

"When we seek loans, banks always request our business plan or the period we can earn profit, but under these circumstances, hotels don't really have a clue when will business get back to normal," according to Mrs Marisa.

She said 50% of hotels nationwide have been closed, while remaining hotel operators and their workforce struggle to survive.

Even though some hotels maintain positions for employees, their living standards were poorer as there was no service charge which is considered a mainstream revenue source for the hospitality business.

Some hotels have to offer their properties as shelters for workers as some of them were not able to pay their rent.

"We need support from the government, or else we could see the whole tourism industry collapse before things get back to a better shape," said Mrs Marisa.

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