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Hotels Boss Uses Foreign Boogeyman to Scare Gov’t Into Restarting ‘Travel Bubble’ Talks

Without foreign tourists, direct gov't aid, Thai hotels will be taken over by foreign investors, Pattaya-region hotels group warns

Thai Hotels Exterior Skyline Aeral

A leading hotel industry executive is using the specter of foreign boogeyman to scare the government into restarting foreign tourism, saying major Thai resorts could be taken over by overseas investors.

Phisut Sae-Khu, president of the Thai Hotels Association Eastern Region, told members and tourism officials at the group’s July 24 annual general meeting at Pattaya’s Cape Dara Resort that a wide range of government assistance is needed before year-end to keep the hospitality industry afloat.

The alternative, he warned, is fthat foreign buyers will scoop up Thai properties on the cheap or hotels will simply go bust, costing tens of thousands of Thai jobs.

In June, it looked like Thailand was ready to pull the trigger on bilateral deals to exchange tourists with countries that have controlled their coronavirus epidemics, including Japan, China and South Korea. But after new outbreaks in those countries, Chula Sukmanop, director-general of the Civil Aviation Authority of Thailand, said on July 8 that he expected negotiations to finalize travel bubbles would be delayed “indefinitely”.

On July 19, Foreign Minister Don Pramudwinai confirmed that foreign tourism would not resume anytime soon, telling the upper house that travel bubbles “can wait”.

Phisut argues that they can’t. He said that while the government has worked hard and spent tens of billions of baht to stoke domestic tourism, hotels and tourist attractions can’t live on Thai travelers alone, as two-thirds of all industry revenue comes from foreign visitors.

Foreign investors already are sniffing around major hotels and resorts in the Eastern Seaboard.

Foreign investors already are sniffing around major hotels and resorts in the Eastern Seaboard, he said, and, without government assistance, Thailand may see much of its hotel industry owned by foreigners in the future.

How much of that is true is debatable. Thailand’s Foreign Business Act restricts foreign ownership of hotels, although majority overseas control is possible.

Most hotel chains avoid having to obtain a Foreign Business License by partnering with a company controlled by Thai nationals or simply licensing a name like Marriott to a local firm, such as Minor International. However, business licenses are granted to foreign-owned companies, usually for larger projects under the Board of Investment, which offers numerous tax breaks for hotels with more than 100 rooms and 500 million baht investment capital.

American-owned firms also can majority-own hotels in Thailand under the Thai-U.S. Treaty of Amity.

Phisut said that, outside of travel bubble deals, the government also has a number of other tools at its disposal to assist the hospitality industry, such as:

  • Organizing government seminars and meetings around the country to boost domestic tourism.
  • Add holidays to the calendar to create more long weekends.
  • Offer the public a tax credit of 15,000 baht for spending on hotels, attractions and restaurants

To not do so would either mean hotels would be sold or simply close, costing tens of thousands of jobs, he warned.

Phisut is not alone in wanting the government to restart travel bubble talks. While the government’s virus hawks continue to cower in fear over the prospect of even a single case of Covid-19 in Thailand, a recent poll showed an overwhelming majority of the public want foreign tourism to resume and even Tourism and Sports Minister Pipat Ratchakitprakan came out in opposition to his government’s overzealous approach to virus control, saying it was time to reopen the borders.

“Although we’re currently encouraging Thais to travel domestically, it’s still a difficult situation for entrepreneurs, since foreign tourists contributed to 2 trillion out of 3 trillion baht of the total revenue,” Pipat told the media July 23. “I will negotiate with PM Prayut Chan-o-cha and the Public Health Ministry to permit more travel into the country.”

A version of this story also appears in the Pattaya Mail, a Bangkok Herald partner.