PHUKET – The Phuket Sandbox – Thailand’s pilot run for reopening the country’s crucial tourism sector that accounted for about 20% of gross domestic product (GDP) before Covid-19 – has so far been disappointing in terms of numbers but is being hailed as a success in other respects.
The Phuket Sandbox – a pun on Fintech terminology for a safe haven for experimenting with new technologies – was launched on July 1 with a target of attracting at least 100,000 foreign tourists in its first three months.
Actual arrivals were an underwhelming 42,000, generating about 3 billion baht (US$90.8 million) in tourist spending. That’s obviously a far cry from the 14.5 million foreign and domestic tourists who visited the island resort in all of 2019, generating 442 billion baht ($13.4 billion) in revenue.
“We were welcoming about 20,000 tourists a day in 2019, but during the Sandbox we welcomed an average of 460 a day, so if you just look at the numbers it was not a success,” said Phuket deputy governor Piyapong Choowong in an interview with Asia Times.
“But the 3-4 months of the Sandbox gave us many things in terms of preparing the country for reopening on Nov 1,” Piyapong told Asia Times.
Thai Prime Minister Prayut Chan-ocha recently announced that Bangkok and other leading tourist destinations such as Pattaya and Chiang Mai will reopen to fully vaccinated foreign tourists from 46 designated “low-risk” countries, lifting the kingdom’s previous onerous 7-14 day quarantine requirements.
Prayut originally vowed to reopen the country by mid-October but was forced to delay until November 1 in the face of still alarming new infection rates, which are still hovering around 10,000 per day in a country of 69 million, a tardy vaccination rollout and questions about the efficacy of some of the vaccines used, especially the China-made Sinovac.
Those issues will all persist after the reopening and could lead to fresh outbreaks and dire consequences for the government.
For Bangkok, Phuket has proven an important test run. Local Phuket government authorities have been meeting with the Bangkok-based National Security Council three times a week to hash out problems they have confronted in implementing the Sandbox and find solutions, said Piyapong.
“We try to pass on the feedback from the tourists to the government officials,” Piyapong said. Tourists have uniformly complained about the complexities involved with gaining entry to the Sandbox, particularly the difficulties of complying with myriad requirements to secure a Certificate of Entry (COE), the document that was previously required.
As of November 1, the COE requirement will be canceled and replaced with a digital Thailand Pass, which drops certain demands such as pre-payment for two or three Covid-19 swab tests, while lowering the minimum Covid medical insurance requirement from US$100,000 to US$50,000.
But an initial Covid test will still be required at the airport, and an installation of a government mobile phone application known as Rao Chana that helps keep track of newcomers. These procedures have meant tourists arriving at Phuket usually spend two hours at the airport, which would become a lot longer if arrivals were in the thousands.
The Sandbox concept was originally a proposal from Phuket’s private sector represented by the Phuket Tourism Association, Phuket Hotels Association, Phuket Travel Agents Association in collaboration with the local Phuket government and with support from Bangkok’s powers-that-be.
“It is a model that we proposed ourselves, as opposed to coming from the government,” said Bhummikitti Ruktaengam, president of the Phuket Tourism Association.
But while the Sandbox concept was a private sector initiative, many of the conditions came at the behest of Bangkok-based authorities, specifically the “doctor-ocracy” that has been determining much of Thailand’s government policy since the Covid-19 pandemic first struck in early 2020.
Some of the initial requirements were eased as the Sandbox progressed. For instance, on October 1 the requirement that tourists spend 14 days quarantined on the island was reduced to seven. On October 15, the island was re-opened to fully vaccinated domestic visitors and bars were allowed to serve booze and stay open till 10 pm.
To the government’s credit, it has learned something from the Sandbox.
“We learned that the Sandbox would have attracted more people with fewer complications,” Bhummikitti said. “We have made suggestions to the government and the government has taken our advice, and it will benefit the whole country.”
One lesson the pandemic has taught governments in general is that the virus is not predictable. Singapore, which recently reopened its borders to vaccinated tourists from ten select countries, is now experiencing a resurgence in Covid cases that is likely to overshadow any benefits from a trickle of arrivals.
Thailand continues to record about 10,000 new Covid cases daily, with the total caseload since the virus was first detected in March 2020 now reaching 1,859,157 with 1,740,316 recoveries and 18,799 deaths. A recently detected “Delta plus” variant has raised new concerns and fresh questions about the wisdom of reopening to the world when so few Thais have been inoculated.
The government has been relatively slow in rolling out vaccinations, with only 38% of the population fully vaccinated and 55% receiving one dose as of late October. Nearby Malaysia is 75% fully vaccinated Singapore has reached 82%.
Phuket has benefitted from the Sandbox in terms of being prioritized in the national vaccine rollout.
“Phuket has the highest prevalence of vaccinations in Thailand, with 82% of the population (547,584) having received the first dose, and 71% two doses and 46% a booster too,” Kobsak Kookiatkul, Phuket’s health chief, told a recent seminar. “This makes foreigners feel confident.”
Unfortunately for the Sandbox, the Delta variant started to spread on the island in June and July, coinciding with the Sandbox’s opening on July 1. The news no doubt discouraged some tourists from booking trips to the resort island. Since April, Phuket has recorded 14,443 cases and 101 deaths, but the incidence has been on a downward trend since October, as is the situation nationwide.
More importantly, there have been no reported cases of foreign tourists spreading the virus to the local population, according to Kobsak. Of the 53,120 foreign tourists who arrived between July 1 and October 21, some 171 tested positive for Covid-19. When a tourist tests positive, they end up spending their vacation in a local hospital for 10-14 days.
But given the ongoing resurgence of the pandemic in various countries such as Russia, the United Kingdom, the United States and even highly vaccinated Singapore, Phuket’s tourism industry is only cautiously optimistic about the near future.
“There are some external factors which we can’t control,” said Bhummikitti. “We don’t know whether there will be another variant or not, we don’t know if there will be a new outbreak but if things go as we expect, we can hope for numbers reaching 30% of the 4Q19 figures in the last three months.”
That would mean about 1 million tourists, both foreign and domestic, still well short of the 4 million arrivals in the fourth quarter of 2019.
Phuket’s tourism prospects will arguably improve with the reopening of other destinations in Thailand such as Bangkok, and Phuket’s neighboring provinces Krabi, Phang Nga and Samui, which provide tourists with more travel options in the kingdom.
The island could also benefit from the general trend towards re-openings in Southeast Asia.
In recent weeks, Malaysia has announced plans to open Langkawi resort island to vaccinated foreign tourists in mid-November (the island was opened to domestic tourists last month), Indonesia has opened up Bali to vaccinated tourists from 19 countries (but they must spend the first five days quarantined in a hotel) and Vietnam has indicated it will open the island of Phu Quoc, off the southern coast, in late November.
“I believe the Phuket Sandbox was a wake-up call for governments in our region to also launch similar projects in their own backyards,” said Luzi Matzig, chairman of Asian Trails, a travel agency specializing in the European market.
But no one is expecting a dramatic recovery this year or even next. “It will take many months to restart tourist arrivals in the different destinations and if we can achieve 50% of the pre-Covid numbers during 2022 this will already be a positive result,” Matzig said.
The Tourism Authority of Thailand (TAT) expects tourism revenues to reach about 50% of pre-Covid levels in 2022, with at least 13 million foreign tourists and 122 million domestic tourists spending 620 billion baht ($19 billion) and 680 billion baht ($20.5 billion), respectively, according to a recent Bualuang Securities report.
Tourism revenues in 2021 are expected to hit a nadir of around 320 billion baht ($9.6 billion), according to TAT estimates. The country earned about $62 billion from just foreign tourists in 2019, when 40 million tourists paid visits, including 12 million from mainland China.
As long as Beijing maintains its “Covid Zero” policy, no new avalanche of Chinese tourists to Thailand should be expected any time soon, a development which may prove good for the country’s overexploited beaches and environment and the government’s new strategy to promote “higher-value” tourists in the post-Covid era.
The tourism authority is targeting higher-spending foreign tourists in the post-Covid era such as “wealthy global citizens, wealthy pensioners and work-at-home professionals,” Bualuang reports.
It’s a refrain that can also be heard in Phuket, a once-pristine island that has suffered environmental degradation, overbuilding and mounting security problems over the past two decades as a result of mass tourism.
“We don’t want to have 14.5 million anymore,” Bhummikitti said. “We would be happy with 10 million, more responsible tourists.”
As to attracting more “responsible” and “high value” tourists in the future, industry sources opine that Phuket and Thailand will face challenges changing their market mix in the post-Covid period.
“Aiming for high-value visitors in the future sounds good in theory but practically speaking we will end up getting more of the same,” predicted Matzig, a five-decade veteran in Thailand’s tourism industry.