BANGKOK – With Thailand suffering its third and worst wave of the Covid-19 pandemic, hopes for a swift revival of the tourism sector, accounting for as much as 20% of gross domestic product (GDP), have once again been dashed.
For Thailand’s huge inventory of hotels —there are about 50,000 hotels and guest houses nationwide — losses are mounting and an asset price-clearing moment of truth is inevitable, though the question in the industry is when.
To be sure, the kingdom’s hotel sector is no stranger to crisis. The industry was pummeled previously by the 1997-98 Asian financial crisis, which led to a 50% devaluation of the Thai baht and a doubling of debt for hotels that had borrowed in dollars, and then the tsunami of 2004, which destroyed hundreds of hotels in Phuket, Krabi and Phang Nga and killed 8,000 people, mostly foreign tourists.
But today’s Covid-19 crisis, which has seen a surge of some 32,000 cases and 70 deaths in a month, is of a different ilk, say analysts.