Phuket Opens for Business in Push to Save Tourism Industry

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Thailand is pushing ahead with plans to jumpstart its crucial tourism industry by reopening the popular resort island of Phuket to vaccinated travelers, even as the more virulent delta strain of coronavirus sweeps through the region.

Starting Thursday, inoculated tourists from low- and medium-risk countries such as the U.S. and Spain will be allowed to holiday in Phuket without quarantining. If successful, the experiment could lead to a wider reopening of the Thai tourism industry as soon as October.

Phuket Opens for Business in Push to Save Tourism Industry

The stakes couldn’t be higher. Before the pandemic, tourism contributed about 20% of Thailand’s gross domestic product -- about double the global average. On Phuket, tourism accounts for more than 90% of the economy and employment. But with beaches empty and many restaurants, bars and massage parlors shuttered, average income is expected to drop below the poverty line this year.

“It’s the start of the reopening of Thailand’s tourism sector in the new normal,” said Thaneth Tantipiriyakij, president of the Tourism Council of Phuket. “We’ll gradually reopen and continuously learn from it to chart the course for tourism to become one of the country’s key economic engines again.”

Phuket Opens for Business in Push to Save Tourism Industry

Even as the island reopens, expectations are low. Only 100,000 foreign tourists are forecast to arrive in the third quarter, compared to more than 2.5 million a quarter pre-pandemic. Booking data from six airlines shows 426 flights and 8,281 arrivals to Phuket during the first month of the reopening.

“Phuket is on a national mission to pave the way for the country to reopen. The whole country is closely watching. We can’t fail,” Prime Minister Prayuth Chan-Ocha said during a visit to the island on Thursday. “There are risks to public health, but at the same time the economy and businesses still need to move forward.”

While Phuket may be open, travelers from places like China, Singapore and Hong Kong are still required to quarantine when they return home, making travel an unattractive proposition.

Phuket Opens for Business in Push to Save Tourism Industry

And would-be holidaymakers still have some onerous conditions to meet. They have to obtain an entry permit, have proof of vaccination and a negative Covid test within 72 hours of departure, as well as insurance covering Covid-related expenses of at least $100,000. They face a Covid test upon arrival, another after six or seven days, and a third after 12 or 13 days if they stay that long.

“The current restrictions are too strict and should be eased,” said Thirayuth Chirathivat, chief executive officer of Central Plaza Hotel Pcl, which operates seven Centara hotels and resorts on Phuket. “If other countries have fewer restrictions, offering more ease of travel, people would choose to go to those places first and we’ll lose the opportunity.”

European countries are the fastest in adopting quarantine-free entry to vaccinated travelers, according to Bloomberg’s Covid Resilience Ranking. Switzerland and Spain are among the countries most connected to the rest of the world.

Phuket Opens for Business in Push to Save Tourism Industry

Other nations that have sought to reopen for tourists have faced setbacks. Portugal was gearing up for a return of summer tourists before it was abruptly taken off the U.K.’s green list of safe countries to visit, and travel restrictions were placed on Lisbon residents on weekends.

Phuket Opens for Business in Push to Save Tourism Industry

And an attempt last year by Thailand to lure foreign travelers by allowing them to quarantine in luxury resorts before roaming the country for up to nine months attracted just a handful of takers.

All up, the government has forecast half a million visitors this year, a fraction of the 40 million who came in 2019 and the 6.7 million last year -- almost all in the first three months before the pandemic upended global tourism. As more countries relax travel restrictions, 20 million arrivals are expected in 2022, though the tourism industry may not fully recover until 2026.

The shift from more traditional markets -- including China, Thailand’s biggest source of tourists before Covid -- presents an opportunity for businesses to expand their client base. Krystal Prakaikaew Na-Ranong, co-founder of The Slate Phuket, said the resort has received bookings for the reopening from the United Arab Emirates, Qatar and Israel, all new markets.

To facilitate Phuket’s reopening, the government has fast-tracked its vaccination rollout. About 70% of the island’s population, and all hospitality workers, have been inoculated, compared to a national rate of just 7%.

Phuket Opens for Business in Push to Save Tourism Industry

That has some health experts worried the nation isn’t ready to reopen. Thailand recorded 30,608 new infections in the week ending June 30, with a record 57 deaths reported Thursday. Phuket recorded just 17 cases during the same period, though the reopening may be temporarily halted if weekly cases rise to 90.

Phuket Opens for Business in Push to Save Tourism Industry

Despite the limitations and potential risks, for now resorts and tourism operators are looking forward to welcoming back travelers.

“It takes two to tango, but at least one side of the dance has started, and that’s better than nothing,” said Ho Kwon Ping, executive chairman of Banyan Tree Holdings Ltd., which has five properties on the island. “The number of countries that now accept people who have been vaccinated to enter without quarantine is growing by the day. The timing for this is perfect to gear up for the peak season in the final quarter.”

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