The tourism sector needs innovation

Thailand relies on the tourism sector, especially international tourism – the industry is one of the three main sources of income for the country.

Given the pandemic restrictions imposed since 2020, international tourism has been frozen for more than two years, which has a devastating impact on tourist destinations, businesses and other related sectors.

The effects were distant. Many tour operators and hotels have been forced to close their doors permanently.

Countless companies in the tourism sector have experienced significant cash flow problems. It goes without saying that tourism businesses, such as tour operators, hotels and airlines, have suffered from this “zero tourism” situation.

This pandemic is hitting not only tourism businesses, but also other related sectors. For example, when tour operators received no tour groups, bus and boat drivers had no jobs while restaurants and eateries also received fewer customers.

The negative effect is not only felt by restaurateurs, but employees and street vendors are also affected. Once consumer demand has been reduced, food producers inevitably feel the indirect impact of the travel suspension.

These are just a few examples of the impact of the pandemic on the tourism sector and the Thai economy.

Rebuilding tourism is a priority

To survive the pandemic, the focus has been on the domestic market to attract local tourists. What we have witnessed is that in the latter part of 2020, the government has gradually lifted travel bans and encouraged domestic tourist travel by providing various incentives related to a variety of tourism businesses, such as tour operators, hotels, airlines and restaurants.

The strategy of encouraging domestic tourism has been employed by many countries to revive tourism activities within their borders and mitigate the impact of the pandemic on jobs and businesses. Even if this does not generate a significant economic impact, compared to international tourism, this stimulus is vital because a country should no longer remain in a situation of “zero tourism”.

A true economic recovery will only be possible when international tourism returns to pre-Covid levels. We are currently trying to bring international tourists back. This month, more tourists have started to return. The Chinese outbound market was once a crucial market source for Thailand due to the high number of tourist arrivals and expenditures. However, this could be an important opportunity to seek new and diversified markets, as it is difficult to predict when the Chinese government will fully open the Chinese border.

That said, government support is essential to help the tourism ecosystem and local economy survive the pandemic as part of the recovery process for the tourism sector. The Organization for Economic Co-operation and Development offers key policies to strengthen this recovery, such as restoring traveler confidence, promoting domestic tourism, supporting the safe return of international tourism, strengthening cooperation within and between countries and building a more resilient and sustainable tourism industry. .

Marketing and communication strategies are essential. The Tourism Authority of Thailand is actively working to promote tourism, both domestically and internationally. Destinations and businesses also need to rethink product and service design and marketing communications to properly appeal to target segments. There are many travel trends tourism businesses should consider to better prepare for and adapt to the tourism resurgence.

We still live in an unpredictable era that demands high levels of contingency planning and comprehensive travel insurance. Fully refundable and free date change reservations are favorable. The short-haul travel market is performing better than the long-haul travel market, as flying around the world is more expensive.

Self-guided tourism has also become more popular during the pandemic as it offers more flexibility, mobility and privacy. Finally, quieter destinations are preferred destinations as people try to avoid going to crowded places.

Tourism recovery plan

According to the latest report from the World Bank, economic activity is expected to return to pre-pandemic levels by the end of this year, with continued progress in vaccinations and the resumption of tourist arrivals supporting the recovery.

The number of international tourists is expected to reach nearly 7 million this year, with a sharp increase in the second half of the year, before rising further to around 20 million arrivals next year, only half the level of 2019.

However, we can see a positive signal in this forecast. Over the past two years, people around the world have increasingly used digital technology.

A World Bank study suggests that adopting digital technologies has the potential to support Thailand’s post-pandemic recovery while improving its long-term competitiveness.

E-commerce is a particularly important outlet for small and medium-sized businesses in Thailand, as it reduces transaction costs and enables entrepreneurs to access new markets.

Various technology-related skills, such as information management, user experience design, embedded systems technology, cloud computing, and the Internet of Things, are in high demand, but the supply is insufficient.

Knowledge of digital technology and improved skills are key to increasing the competitiveness of tourism in Thailand. Collaboration between education and tourism companies to design programs and help align training with industry demand can also have a positive impact.

It is important to identify new and emerging digital skills needed to meet labor supply and demand. The education sector is key to the future supply of skills for the tourism sector as well as the contribution of skills that support the transformations of digitalization in the tourism industry in Thailand.

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