Is A Forced Closure Order For Phuket Hotels Needed?

On Saturday 9th January a new order from the Phuket governor that requires a 14-day quarantine for arrivals from Thailand’s ‘red zone’ areas has thrust the island’s hotel and tourism sector into unknown territory.

The impact over the past week, post-New Year on travel to the island has methodically ground down airlift to the point of a staggering level of increased cancellations of flights and hotel bookings. Airlines are groaning under the financial strain of mounting losses.

With the Phuket provincial restrictions now in place until the end of January or to a date as necessary, hotels are facing an absolute cash flow crisis. What is apparent is the national message recommending Thais to stay home equates to a virtual shutdown of domestic tourism.

While the latest string of restrictions now put individual provinces in control of travel limitation and protocols, there is a dire need for the national government to address economic measures to assist employers and employees of hotels.

At this point, a closure order for hotels and tourism businesses would be a welcome move by many given that the national social security system could trigger a 50% subsidy for staff pay similar to what transpired mid-last year. It’s a choice now of either interceding or potentially triggering wide-spread permanent closures and job losses.

Perhaps the most important issue hotels are facing is when can they expect the first domestic business to return and secondly international travelers. It’s unlikely the national government will look to reverse its position on asking Thais to stay at home anytime soon and the only real answer to resolving this is broad penetration of the vaccine, which is unlikely until the mid to later part of the year.

On the international front, as many countries now are actively vaccinating, an urgent protocol needs to be put in place that allows travelers who have been vaccinated and tested to enter Thailand. In fact, this may come sooner than the domestic penetration of the vaccine.

For hotels and tourism establishments, the first half of 2021 looks to be our darkest hour and the industry must continue to actively dialogue within the public and private sector for immediate measures and better information to be distributed on implementation and changes to restrictions.