Karon beach looked as majestic as ever. Golden sands warmed just right by the mid-tropics sun, caressed ever so gently by the emerald green waters of the Andaman sea.
But to Danai S.K., something was missing. Even during the lull of previous low seasons, with moody grey skies threatening the cliches of paradise, Karon beach was filled with busy holiday-makers.
But this August, despite the much vaunted ‘Sandbox Model,’ Karon beach stood empty.
“It was a ghost town,” said Danai, a Singapore resident and regular visitor to Phuket. “It was even more shocking on Patong which is just nearby.”
“Usually, I would come at least once a month and even in the lowest season you would see hundreds of Chinese tourists. Now? Nothing.”
Phuket isn’t the only tourist destination Thailand to be devastated by the effects of the Covid-19 pandemic. Throughout the country, famous (and busy) tourist destinations lay shuttered as the country reels from closed borders and Covid-19 restrictions.
All markets affected
The pandemic has left no part of the tourism and hospitality industry unscathed. While downmarket Phuket guesthouses have suffered greatly, so too has upmarket Bangkok Hotel. Rosewood Bangkok, one of the crown jewels of the Bangkok hospitality industry, announced this past week that it would be closing its doors until further notice.
Developed by Rende Development Co, the luxury hotel had only opened in March 2019 to much fanfare and critical acclaim.
“The temporary shutdown of Rosewood Bangkok is meant to re-establish a foothold amid uncertainties,” Paetongtarn “Ing” Shinawatra, Rende’s deputy chief executive said at the time of closing.
Rosewood are not the only hotel to have shuttered its door in the past 18 months. Rumors that many of Thailand’s hotel owners were looking to sell out had been circulating for weeks if not months.
Hmm.. pic.twitter.com/cpVv6kONK7
— ไตร (@tri26) August 31, 2021
Iconic hotels including the Emporium Suites and the Pullman were among those rumored to be on the market.
By the numbers
A quick look at the numbers and it isn’t hard to see why many owners were looking to cut their losses.
In 2019, Thailand saw nearly 40 million tourists visit the country. These visitors spent more than 1.93 trillion baht in the country making the tourism sector one of the key drivers of the economy.
That number has dried up to nearly negligible levels in 2021 and with the country still closed due to the third wave of the virus, the future seems bleak.
The third wave in Thailand, and much of the region, has been caused by the virulent and highly communicable Delta variant of Covid-19. The Delta variant has also spread in many other countries around the world causing a knock-on effect on travel and quarantine.
“I think a lot of my friends are apprehensive to travel to Phuket, even if it is open to tourists, because they have to quarantine when they return to their home countries due to Delta,” said Danai.
Mitigating and diversifying
One of Thailand’s largest hotel operations, Minor International [MINT] has suffered greatly from the lack of tourist but have protected against a loss in revenue by diversifying to other markets.
Their recent purchase of Madrid-based NH Hotels has protected them against losses in South East Asia.
“I had purchased the NH Hotels on hopes and expectations that the Chinese tourism market would continue, that is not the case, but thankfully our diversification has helped as we are able to get other nationalities to be in our hotels,” Minor CEO William Heinecke told Thai Enquirer.
“For the past 2-months we have been profitable,” he said. “Travel in Europe is returning and we are back to near pre-covid levels. In Dubai where we have hotels, the occupancy is back to pre-covid levels while in Maldives both the room rate and occupancies are back to pre-covid levels.”
“What is more interesting is that we have cut a lot of fat and all our operations are now lean operation, which means that the profitability will be achieved faster.”
However, not all hotel operators have been as industrious or financially astute as MINT. Those with portfolios only in South East Asia have suffered greatly from the pandemic.
“The worst performing markets for us has been Thailand, Cambodia, Laos, Vietnam and Indonesia,” Heinecke said.
Missed opportunity
According to Heinecke, much of the heartache caused by the pandemic could have been avoided with better government policy.
Thailand could have been a vaccinated tourist haven, “had we had vaccine diversification, had we purchased vaccines such as mRNA from the start, had we vaccinated our people early enough with vaccines that matter and not Sinovac,” Heinecke said.
Thailand’s government has also not done enough to help the tourism industry, a puzzling move given the industry’s importance to the economy.
“Germany has given us about $30 million in aid, and this is a country which is not our headquarters, we just operate hotels there,” he said but Thailand has not done anything to compensate the hotel business at all.