Thailand to Extend Travel Subsidies As Outbreak Halts Bookings

(Bloomberg) -- Thailand plans to extend its domestic travel subsidy program next year as a new outbreak of coronavirus cases hits people’s holiday travel plans, dealing a fresh blow to the tourism-dependent economy.

The Thai government, which had until recently managed to keep the spread of the virus under control, has been battling a new outbreak that started after a seafood vendor tested positive for Covid-19 on Dec. 17. The pathogen has since spread from a coastal province to 48 of Thailand’s 77 provinces, prompting stricter social restrictions including the closure of entertainment and sports venues. Samut Sakhon province, the origin of the outbreak, is on lockdown until Jan. 3.

“Domestic tourism has frozen completely,” Tourism Minister Phiphat Ratchakitprakarn said in an interview in Bangkok. “We have recently added 1 million more hotel room bookings into the Travel Together program, but we’re confident there won’t actually be any traveling during this time.”

Prime Minister Prayuth Chan-Ocha has advised people against group gatherings and unnecessary travel, and said in a Facebook post on Tuesday, “This year we may have to ring in the new year at home with a limited circle of people.”

The Travel Together program, which offers subsidies of up to 40% for hotel-room bookings and air tickets, has been a lifeline for the tourism industry. For example, more than 5 million of the 6 million room nights the government is helping cover have been booked, with travelers from Bangkok in particular helping boost occupancies at hotels around the country. The government is now planning to extend the 20 billion baht ($666 million) subsidy program beyond its slated April 30 end date, Phiphat said. So far the government has used 7.63 billion baht of the budget.

The pandemic has devastated Thailand’s tourism industry, which netted more than $60 billion in revenue from about 40 million visitors in 2019 and accounted for about a fifth of the nation’s gross domestic product. Thailand was the first country outside of China to report the presence of Covid-19 in January, and has recorded a total of 6,690 cases.

The government has experimented with different ways to try to restart the tourism industry. On Dec. 16, just one day before the seafood vendor that started the latest outbreak tested positive for Covid-19, Thailand had eased restrictions on foreign tourists from 56 countries. It is still mulling setting up golf or wellness quarantines to attract high-end travelers from South Korea, Japan, Sweden, Germany, and the U.K., Phiphat said. He added that Thailand’s first travel bubble pacts could come in the third quarter of next year as long as the spread of the virus is contained.

“If the government is unable to control this outbreak, I believe all plans in regards to foreign tourism will be forced to stop and be pushed back,” Phiphat said. “Even if we announce a reduction in quarantine days, no one will come.”

©2020 Bloomberg L.P.