The Covid-19 outbreak continues to take a huge toll on human life across the globe, with more than 645,000 fatalities recorded worldwide as of July 26th.
However, it’s fair to say that some countries have suffered more adversely from the socio-economic impact of Covid-19, with Thailand providing a relevant case in point.
After all, while Thailand has only seen 58 deaths as a result of coronavirus, its fast-growing and seminal tourism industry has been decimated by the pandemic at a considerable economic cost.
But just how adversely has the Thai economy been impacted by the global pandemic, and what steps are the nation’s government taking to create a sustainable recovery?
Covid-19 and Tourism in Thailand – The Story so Far
Thailand has become increasingly reliant on tourism over the course of the last few years, as the market has continued to grow at an exponential rate.
A staggering 38.27 million made the trip to Thailand from overseas in 2018, for example, while this number peaked at a record 39.8 million 12 months later. This represents an annual growth rate of 6.66%, following an even healthier increase of 7.5% between 2017 and 2018.
This distinguishes Thailand as the single most popular tourist destination in Asia, with only Malaysia boasting similar numbers in terms of international visitors. This fellow Southeast Asian nation reported a total of 6.69 million tourists in Q1 of 2019, contributing to an annualized total of around 26 million.
Even Singapore could only boast a total of 19.1 million international visitors last year, with this generating a cumulative yield of around $27.1 billion.
This certainly highlights the lucrative nature of the tourism industry in Thailand, while also reinforcing just how reliant the nation has become on domestic and business travelers from overseas.
However, the Bank of Thailand (BoT) has recently said it will take several years for the country to reach the same levels of tourism achieved in 2019, creating a scenario where the national economy may struggle to create the requisite number of jobs in the coming years.
As a result of this, the BoT anticipates that a relatively paltry eight million foreign visitors will cross the borders into Thailand by the end of 2020, creating a staggering annual decline of 80% in the process.
How Can Thailand Recover from the Covid-19 Crisis?
With the tourism sector in Thailand likely to endure a sluggish recovery in the near-term, the national authorities have had to seek out new ways of boosting the economy.
Interestingly, Thailand’s domestic bond market has emerged as a potentially rich source of growth in recent times, providing a sustainability-linked primary paper that’s based around green assets.
This growth has been underlined by the oil and gas major PTT’s innovative plan to prioritize green bonds, while it has come at the ideal time after the Thai baht fell to a one-month low last week following the resignation of the nation’s finance minister and a further round of quantitative easing measures.
This reversed a wider trend for the baht and other Asian currencies, which had made marked gains against the greenback in recent times and enjoyed remarkable growth throughout the second quarter.
Beyond this, the Thai economy may also benefit by following the example of Vietnam and similar Southeast Asian nations, by focusing primarily on domestic tourism in the near-term. In the absence of international travel, this can help to sustain resorts and hotels nationwide, while optimizing the amount of cash reinvested into the economy in the wake of the pandemic.
This may require some level of government investment into public transportation and employee retention schemes within the leisure and tourism sector, but it has the potential to deliver significant social and economic returns throughout 2020 and beyond.