Phuket’s reopening delayed by new virus case

by BLOOMBERG

BANGKOK • Thailand’s plan to reopen its tropical island of Phuket to foreign visitors next month has hit a speed bump with the nation ending a 100-day streak of no local community coronavirus transmission last week.

“The government is ready, but there are still concerns from some groups that the reopening will lead to infections,” Deputy Premier and Health Minister Anutin Charnvirakul said yesterday. “It’s been nine months now. We have to learn to fight and live with the pandemic. We can’t be afraid of it.”

The reopening plan faced more scrutiny after authorities confirmed the first local case since May 26 in a 37-year-old male inmate of a Bangkok prison with no recent history of travelling abroad. Reopening to tourists has led to the resurgence of infection in some places like the Caribbean island of Aruba, and governments are fearful of striking the wrong balance between public health and economic help.

Thailand’s hospitality and tourism sectors are counting on the return of international visitors, who contributed to two-thirds of tourism income before the pandemic, to reverse a slump in business and save millions of jobs. The government and businesses are weighing the cost between curbing infection risks and limiting damage to the economy, which is on track for a record contraction of 8.5% this year.

“Thailand’s failure to relaunch overseas tourism creates a dangerously perilous scenario for Phuket’s hospitality industry,” said Bill Barnett, MD at consulting firm C9 Hotelworks Ltd. “The situation is bad, and likely to get worse, as operating hotels incur losses day in and day out.”

Almost 70% of hotels in the development pipeline are now being delayed or put on hold, according to C9 Hotelworks data. Barnett said the financial impact on the hotel development pipeline can lead to the erosion of jobs in construction, real estate, retail and consumer credit defaults.

The Thai government has been trying to promote domestic tourism with a campaign to foot 40% of travellers’ hotel bills, but local spending alone can’t compensate for a loss of foreigners. In Phuket, foreign visitors accounted for two-thirds of overall tourists but contributed to 90% of its tourism receipts. — Bloomberg