Phuket’s hotel business nearly reaching overall collapse and bankruptcy, urging Thai government’s practical re-opening plan to foreign tourism

PHOTO: Le Méridien Phuket

Phuket –

The Phuket Hotel Association urges the Thai government’s re-opening tourism plan to be implemented by the end of this year as the local hotel industry is nearly reaching its ‘breaking point’, says president Anthony Lark.

The association had disclosed a report of the impact of Covid-19 on hotel development in Phuket yesterday, September 10, indicating that the hotel and tourism business in Phuket is in a critical stage as 69% of hotels are now closed, delayed or suspended due to the pandemic.

86,000 rooms in Phuket hotels that are currently operating also do not reach breakeven or are even sufficient enough to maintain positive cash flow to stimulate the current domestic tourism policy.

Further information from the Airports of Thailand (AOT) also shows that the number of flight arrivals had decreased by 65 percent, compared with the same period of January to July last year.

PHOTO: Travel Daily News

Anthony stated: “About 1,758 licensed accommodation companies on the island and ongoing hotel projects from 58 companies with 16,476 additional rooms were greatly affected since the lockdown in March.”

“If the government does not support re-opening the country or welcoming foreign tourists any time soon, Phuket will face a huge financial loss and at least 50,000 employees working directly in the hotel sector in Phuket will be laid off this year.”

The association has come up with several suggestions, stating that they actively encourage the government’s idea of re-opening the resort island under a safe and practical scheme for foreign tourists.

According to the association statement, more proactive negotiations between the government and private sectors are firstly encouraged. Meanwhile, the Bank of Thailand (BOT) should also be considering short-term loan measures to assist hotels that are seeking urgent financial help in order to cope with economic downfalls and to maintain employment in the business sector.

Bill Barnett, the Managing Director of Asia-based C9 Hotelworks, additionally said that Thailand’s failure to launch the ‘Phuket Model’ has created a dangerous situation for the Phuket hospitality industry – not only for the hotel and tourism sector, but also causing the domino effect in the construction of real estate, retail, tourism and eventually the entire consumer hierarchy. He warned that this issue goes well beyond the tourism and hotel industry and multiple industries could face total collapse.

“The plan for re-opening the city does not only have to be well structured but also has to be approved by Thai people to order to succeed. But the most important issue to be raised at the moment is how long the hotels can continue fighting for their lives in the present state while waiting for the plan to be implemented.” Said Barnett to the associated press.

Various plans for allowing in foreign tourists are set to be further discussed next week at the weekly Thai Cabinet meetings. Prominent Thai residents of Phuket have opposed the plan of re-opening the island, causing friction between business owners claiming the entire economy of the island will collapse and residents, primarily wealthy and self sufficient, who fear the virus.

Sending
User Review
3.5 (4 votes)