Thailand launches US$641 million scheme to boost domestic tourism in pandemic’s wake

With tourism accounting for up to 20 per cent of the country’s GDP last year, the ‘land of smiles’ is acutely feeling the lack of international arrivals
But the government is banking on vouchers, plus subsidies for transport and hotels, to entice Thais into travelling and help make up for some of the loss

Coronavirus pandemic: All stories

Vincent Vichit-Vadakan

Published: 9:30am, 10 Jul 2020

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Thailand is set to launch an ambitious 20 billion baht (US$641 million) government stimulus package to encourage domestic tourism, in a bid to plug the gap left by the drop in international arrivals amid the coronavirus pandemic.

Tourism directly or indirectly accounted for as much as 20 per cent of the country’s GDP last year, but that share is projected to fall to just 6 per cent in 2020 – which is where the Rao Thiew Duay Gan (We Travel Together) programme comes in.

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With international arrivals unlikely to resume until the last quarter of this year, the government is counting on its own citizens to pump cash into the ailing tourism industry.

Other nations in the region such as Singapore are relying on the private sector to pick up the slack and offer deals to locals, while Vietnam – widely praised for its coronavirus containment strategy – has increased domestic flight capacity. Even smaller markets like Laos have been pumping money into domestic marketing, resulting in full occupancy in some of the country’s more popular tourist haunts.

Empty chairs are seen on a beach in Thailand’s Phuket which would usually be full of tourists amid the pandemic in March. Photo: Reuters

Thailand is taking similar measures, but the government is also reaching directly into its own coffers to support what is the largest tourism market in Southeast Asia.

Its three-pronged stimulus package covers subsidies on accommodation, transport subsidies – including for domestic flights, long-distance buses, and car rental fees – and e-vouchers that can be used for food and other services. All subsidies are capped at 40 per cent of total expenditure, leaving travellers to pay the balance, with transactions to be handled through the state-owned Krung Thai Bank e-wallet app that is linked to each user’s unique citizen ID card number to reduce the risk of fraud.

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The scheme will run until October 31 and is limited to 5 million room nights and travel allowances for 2 million trips – a fraction of the government’s target of 100 million domestic trips this year. An additional 2.4 billion baht has also been earmarked to provide frontline health care workers with special travel packages.

Online registration for the scheme is already open for businesses planning on taking part, with 36,000 restaurants and 24,000 hotels expected to join. The scheme’s implementation has not been without its issues, however.

Kanyarat Som Thongkhum’s mother Piangphon poses at the family homestay in Samut Sakhon province. Photo: Vincent Vichit-Vadakan

Kanyarat Som Thongkhum, who owns the five-room Baansuan Chamchuen Homestay in Ban Phaeo, Samut Sakhon province, noted that the registration process was easy, but balked at having to choose between accepting bookings through online travel agent Agoda, which charges a substantial commission, or taking credit card payments.

“Our room rate is only 800 baht (US$25.65) per night,” she said. “We try to avoid extra expenses.” Credit card fees will now eat into her already slim margins, but she said she remains hopeful. “We expect it to increase the number of visits to our homestay.”

Although the scheme does not cover permanent residents because of legal issues with extending it to non-citizens, Tourism Authority of Thailand Deputy Governor Tanes Petsuwan said they were negotiating with online travel agents such as Agoda and Booking.com “to produce a special and privileged package for expats” separate from the allocations under the programme.

At a recent “Unlock Sale” held in Bangkok’s popular Central World shopping centre – the first public marketing event organised by the tourism authority since Thailand’s physical distancing rules were introduced – 24 businesses from the popular island of Samui gathered to offer everything from substantially discounted air fares to free shopping vouchers.

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Khaosan Road and other Thai tourist hotspots prepare for business to return after Covid-19 crisis

The government’s hope is that its combined efforts will be enough to generate 900 billion baht (US$28 billion) this year, roughly one-third of the 3 trillion baht that the industry made in 2019.

This is not the first time the government has looked to use handouts to support domestic tourism. Last year, it announced a subsidy scheme to encourage tourists to go to under-visited secondary destinations around the country, before ultimately scrapping the plan amid criticism that it amounted to political pandering. Later in the year, a “Taste, Shop, Spend” scheme was launched to give away 10 million 1,000 baht grants for people to spend on goods and services, though this was plagued with a number of technical difficulties.

What remains to be seen is whether Thais are willing to travel again, with or without incentives. People questioned for this article asked whether the system would be complicated to use, if it was suited to their current travel needs and if spending 4,500 baht to benefit from the maximum room discount of 3,000 baht was really worth the trouble.

But it is the risk of contracting coronavirus that is still the primary concern for many potential travellers. “I like travelling but it’s better if I start again when this situation is resolved,” said Chiang Mai resident Pimpaporn Pimsaran.

This article appeared in the South China Morning Post print edition as: Major stimulus plan aims to boost domestic tourism

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