Tour operators flail amid industry disruption
Tourism veteran urges government support and stimulus during prolonged downturn
The global pandemic marks the most severe crisis in 60 years for Thai tourism as the number of international arrivals bottomed out at 6.7 million last year, compared with nearly 40 million in 2019.
With tight border controls, the outbound market also experienced a nosedive, from 11 million trips in 2019 to only 1 million last year.
Tour operators, a major driver in the local economy, inevitably struggled to maintain business after the virus spread last year, with vaccination unlikely to save tourism until late this year at the earliest.
Thanapol Cheewarattanaporn, a tourism veteran who worked in the industry for more than 30 years supervising a number of tour companies, said everything was razed to the ground after confronting an unprecedented global crisis.
After working as a tour guide for visitors from the mainland for several years, he took a general manager post at Quality Express, a family business established in November 1999, conducting both inbound and outbound tours.
Quality Express is widely known among locals as an outbound tour operator, with a market share of 10-15% to popular destinations such as China, Japan and Vietnam, and a market share of 30% in Eastern Europe.
Back in 1999, the company targeted the mid-scale market with affordable prices to give people overseas travel experiences, he said.
Prior to the outbreak, the outbound market witnessed impressive growth. The company was able to diversify to cruise tours in 2018, such as three-night trips from Bangkok (Laem Chabang port) to Singapore, or river cruises in Europe.
Apart from retail tour packages, Mr Thanapol also set up Go Holiday Tour in March 2006 as a one-stop wholesale travel agent to offer tourism products and services for other tour companies.
Go Holiday was able to capture market shares for outbound and inbound tourism of around 20% and 15%, respectively.
Tangmotour, a domestic and outbound tour company, was established in May 2009 as Mr Thanapol saw opportunities in the domestic market.
He said there was demand from customers who wanted to explore more of the country instead of travelling abroad.
"Local destinations were like dark horses. We had a million tourists fly across the globe to visit our country, but we overlooked these places as we lived too close to them," said Mr Thanapol. "I would like to highlight domestic tourism to locals more."
Tangmotour has an 8% market share. He said the domestic market is the focus to sustain business until borders are reopened.
"Many countries including Thailand face new waves of infections, while vaccine roll-outs and reopening policies remain unclear," said Mr Thanapol, president of Tangmotour. "The only way out is to shift to domestic tourism."
As there is high volatility in local infections, the company has revised its business plan on a daily basis, he said.
Mr Thanapol estimated inbound tourists from Asia will come back by October, while the outbound market is expected to restart early next year in Southeast Asia, followed by Asia in general, if the country can procure more vaccines for mass inoculations.
Most importantly, tourism activity including inbound and outbound travel during the first stages needs to be conducted by tour operators to ensure a high level of safety, allowing for better communication with tourists in case of a virus alert, he said.
"It might take around four years to climb back to the same level of revenue in 2019, assuming tourists don't have to undergo quarantine," said Mr Thanapol.
The number of staff at tourism companies is 20% of levels before the pandemic, down from 200 people to 40 on average, in an effort to streamline costs and secure liquidity, he said.
Go Holiday Tour had to close temporarily.
Mr Thanapol said a recovery in domestic tourism started to take shape during the fourth quarter last year. His company called staff back to work to prepare for more stimulus campaigns, such as the senior travellers' stimulus, which awaits cabinet approval.
Yet the new outbreak may cloud the future of this market until the end of March, as everyone wants to be assured of containment success, he said.
Mr Thanapol said the pandemic is a catalyst for tourism disruption.
Travel companies have to adapt for digital transformation within 3-5 years because of changes in consumer behaviour and the stagnant economy, he said. This means shifting the way they do business from offline to online platforms.
Prior to the outbreak, his companies created an online store, allowing tourists to select tour packages.
Mr Thanapol, who is also president of the Association of Domestic Travel, said the government plays a crucial role in promoting domestic trips by subsidising travel costs.
He urged the government to help tour operators by encouraging state agencies to take more domestic trips because this segment still has purchasing power.
"Over the past year, tourism operators submitted to the government many proposals that could have helped staff and their families, but most of them hit a dead end," said Mr Thanapol.
If the government cannot offer financial aid, it should at least stimulate more demand by introducing new tourism campaigns, he said. This support helps operators generate income while waiting for the country to reopen.
The association cut the goal for domestic trips from 200 million to 150 million this year. Mr Thanapol said the strength of the tourism rebound will largely depend on the pace of vaccinations as well as the confidence of domestic tourists.