Crowded streets, bustling nightlife, and vibrant beach parties: this high season is shaping up well for Thailand, experiencing a surge in international tourists after a three-year hiatus due to the Covid-19 pandemic. Rather than depending heavily on sheer tourist numbers, the pandemic has taught us the importance of slowing down, exploring natural destinations, and allowing environments to recover from reduced capacity, waste, and environmental footprint.
Increasingly, tourists, especially Europeans, are becoming conscious of their impact on the environment and society when they travel.
In 2024, the Tourism Authority of Thailand (TAT) aims to achieve full revenue recovery to 2019 levels while reducing reliance on tourist numbers, focusing instead on "high value" and "sustainable tourism." The goal is to boost tourist spending, ensure fair income distribution within local communities, and maintain a balance between environmental preservation and socio-economic growth.
Amidst the growing demand for responsible tourism, operators have already adapted their products and services to align with this "new normal" agenda.
SHAPING SUPPLIES
"Hotels play a significant role in the sustainable tourism ecosystem, as tourists often need accommodation during their travels," says Udom Srimahachota, Chairman of the Environment at the Thai Hotels Association (THA). "There’s a growing demand among international tourists for environmentally-friendly hotels. Travel agents and destination management companies (DMCs) are creating preferred lists of tourism suppliers who meet these criteria," Udom explains. The Thai Hotels Association has actively worked to advise and encourage hotel operators nationwide to provide environmentally-friendly and sustainable services.
In Thailand, the "Green Hotel" certification, awarded by the Department of Climate Change and Environment (formerly known as the Department of Environmental Quality Promotion), and the "Green Leaf" certification, awarded by the Green Leaf Foundation, are recognised standards. Out of 1,012 THA hotel members, approximately 116 have received the Green Hotel standard, and 176 are certified by the Green Leaf Foundation.
In southern tourism destinations, the Sustainable Tourism Development Foundation was established by private tourism operators in Phuket last year. This foundation serves as a platform for running sustainable projects while promoting tourism. Bhummikitti Ruktaengam, the foundation’s president and advisory chairman of the Phuket Tourist Association, emphasises the need to advance Phuket’s tourism industry through sustainable practices under the ESG concept. The foundation’s "Food Before Waste" project, for example, involves repurposing surplus food from hotels, restaurants, and supermarkets to create organic fertilizer and clean energy. This not only benefits the environment but also promotes food security, supports communities, and bridges social gaps. The foundation aims to establish a kitchen centre for managing surplus food and waste in each Phuket district by the end of the year.
Additionally, the foundation plans to launch the "Phuket Tourism Carbon Centre" by year-end. This centre will serve as a learning facility and platform for tourists to calculate and offset their carbon footprint from their trip to Phuket. Tourists can choose to plant native plants ("green carbon") or seagrass ("blue carbon") at designated sites. The centre will also operate as a carbon credit market platform, generating income for local communities and landowners.
OVERCOMING CHALLENGES
However, awareness of sustainability remains limited, particularly in second-tier cities where there is more reluctance to embrace green practices. Udom points out, "Adapting hotel businesses to sustainability is not overly challenging. It may require significant initial investment, but in the long run, it helps operators reduce costs and benefits the tourism ecosystem."
Typically, hotels need to review their operations and policies. This includes sourcing local community products, implementing energy-efficient equipment, and adopting waste management and recycling policies. Attaining Green Hotel certificates, which Udom considers a fundamental green requirement for Thai hotels, involves collaborating with professional committees and experts who provide guidance to operators.
Since environmental sustainability represents just one facet of overall sustainability, the next step for hotel operators is to earn certifications in other areas. Various certification programmes recognised by the Global Sustainable Tourism Council (GSTC) require operators to consider human rights, child safety, and inclusiveness policies. However, these certifications often entail higher costs, limiting their adoption. Currently, only a few hotels, mainly chain and large hotels, have met these standards, indicating that there is significant room for improvement. Udom mentions that the Green Hotel project will be upgraded to "Green Hotel Plus" next year to measure additional sustainability performance.
"Sustainability is primarily understood among large hotels today. Thailand’s biggest challenge is to encourage small and medium enterprises (SMEs) and businesses in second-tier cities to embrace sustainability," emphasises Udom.
Bhummikitti adds that since the majority of operators in the tourism sector are SMEs, accessible financial programmes are urgently needed. Existing loans offer limited flexibility for small and medium operators, causing many to lag behind global trends. Bhummikitti suggests that enforcing green finance and sustainable programmes will enhance Thailand’s image as a top global destination.
OPPORTUNITIES FOR GREEN FINANCE AND SUSTAINABILITY TRANSFORMATION INSIGHTS
Currently, SMEs in Thailand can access a transformation loan from UOB Thailand to adopt digital technology, invest in green energy, environmental-friendly services, and innovate, all regulated by the Bank of Thailand. The average interest rate does not exceed 5% annually, with a cap of 2% during the first two years.
In alignment with global sustainability principles, UOB Thailand has launched The Finlab Thailand, focusing on incubating SMEs nationwide for digital transformation. Banlang Wongthawatchai, Head of Digital Engagement and FinTech Innovation at UOB Thailand, advises SMEs to reduce operational costs, seek business partnerships to mitigate risks, certify their products for customer confidence, and adopt technology to increase income generation opportunities.
One recent initiative is the Sustainability Innovation Programme (SIP), which provides digital tools, insights, business opportunities, and access to financial support from the government, and green loans from UOB to Thai tourism SMEs aiming for sustainability. Over 150 entrepreneurs from the tourism sector have participated in the programme, receiving sustainability expert guidance, cutting-edge digital tools, and opportunities to network with like-minded businesses.
Variwan Vitayathanagorn, owner and CEO of Neera retreat hotel in Nakhon Pathom, has participated in the programme and emphasises that sustainability is no longer a trend but a necessity that should be ingrained in a business’s DNA. Neera retreat hotel, which is already an "eco-conscious" establishment, learned valuable lessons from other hotel operators during the programme, such as reducing costs through the adoption of organic and locally sourced food products. Networking also opened doors to collaborations with environmental-friendly material suppliers and social enterprise networks.
As a tourism SME, Variwan hopes that the government and authorities will provide more tax incentives for those implementing sustainability programmes, and expand knowledge accessibility initiatives.
UOB Thailand plans to launch the second phase of SIP next year. Keep an eye out for updates from UOB.
This article is part of a 20-part series that explores what it takes to create and secure a sustainable future. In collaboration with UOB. You can view the whole series here.
