PHUKET: A leading Phuket tourism economy expert has warned that plunging incomes from tourism in the coming months could easily see Phuket’s tourism income per capita pushed below the provincial poverty line.

Assistant Professor Dr Chayanon Phucharoen, Associate Dean for Research and Graduate Studies, Faculty of Hospitality and Tourism, Prince of Songkla University (PSU) Phuket campus, revealed to The Phuket News this week that the dire forewarning was based on the inception report by the university.

The report had determined that the forecasted “tourism revenue per capita” from tourists in the coming six months averaged about B3,711 per month, even with the multiplier effect – the amount the same money generates as income for other people as it passes through the economy.

Meanwhile, the 2019 poverty line of Phuket stands at an income of just B3,068 per month, Dr Chayanon said.

“In our simulation, the main variable was the number of Thai tourists. Our simulations compared the current situation with after the lockdown was lifted the first time [April 2020],” Dr Chayanon said.

“After the first lockdown was lifted there were about 2,000-3,000 people [domestic tourists] coming to Phuket each day, and that increased to 5,000-7,000 per day from September through November.

“We used those numbers to simulate the scenario after this latest lockdown was lifted [following the Samut Sakhon outbreak]. We found that the direct tourism income per registered capita in Phuket even in the best case scenario was about B1,963, which resulted in total tourism income per registered capita of B3,711 [presuming that all of the direct income circulated within the province only],” he said.

“However, if the number of tourists coming within the next six months is lower than the number after the first lockdown was lifted, this will be a difficult situation,” Dr Chayanon warned.

In that case, “Even applying the ‘tourism multiplier’, the income is probably not over B3,000. Officials already knew this information, and they are trying hard to boost tourism,” he said.

HEAVY IMPACT

Dr Chayanon pointed out the severe damage the COVID-19 pandemic had inflicted on Phuket’s economy. 

“Through a simple fact check with statistics from the Ministry of Tourism and Sports, before the pandemic Phuket generated about B440 billion for the country each year, but only generated B108.46bn last year,” he said.

However, about 91% of the income generated last year was realised from January to March, before the COVID-19 pandemic took significant hold. The rest of the year generated the remaining 9%, he explained.

“For example, B1.58bn was generated in December [2020], which was less than 3% of the B56bn generated in the same month the year before [2019],” Dr Chayanon noted.

“This is an inevitable fact: that Phuket’s economy is a purely tourism-led growth economy, so we have low flexibility for this economic shock,” he said plainly.

Dr Chayanon pointed out that the impact on Phuket spread beyond the island’s borders. “Everything has a chain effect. This disruption in tourism revenue does not stop in Phuket, it spreads out to other provinces. From our statistics, we found that every B100 spent in Phuket contributes about B189 to the national economy,” he said.

The tourism industry specifically has an intensive ‘backward linkage’, he noted. For example, hotels and restaurants significantly purchase their raw materials from the agriculture industry. From Feb-Jul every year, the revenue of the agriculture industry derived from Phuket tourism is approximately B10bn. “However, this value for this year is estimated as merely B400mn. When there is damage to this part [tourism], it also affects other parts [of the economy],” he said. Besides, tourism industries in our province is a relatively labour intensive industry, a disruption in the tourism industry would create massive unemployment.

IMMEDIATE FOCUS

“As a short-term solution, we all have to cooperate together to attract domestic tourists to the island, in order to keep our businesses and provincial economy going,” Dr Chayanon urged.

The time for action is now, he said: “because Thai people love to travel to coastal destinations from February to April.”

“We have to promote our unique features to attract people to come, especially the beaches, which are almost indigenous as when Phuket firstly appeared on the tourism map 30 years ago. Through natural rehabilitation over a year, we will become one of the impressive destinations among Thai tourists,” he added.

“At the same time, we also have to help those people who do not have any income. In the first outbreak, we did a very good job on helping local people, such as providing essential goods.

“I would say that this current situation is worse than the first outbreak because people have already spent nearly all of their savings. The ‘Tu Pan Suk’ sharing cabinets project is needed more than the first time, while reducing expenses in each household is also necessary,” he said.

DOWN THE ROAD

As a medium-term solution, Dr Chayanon urged the focus to be on the finding of concrete solutions for allowing international tourists to return to the island.

“We cannot stay still, we have to find a way to reopen and welcome foreign tourists. While finding a way to do this, we need to provide good services to domestic tourists in order to keep our businesses operating. Not only to save our province, but the whole country. If those tourism business operators cannot survive this storm, some competitiveness features [e.g authentic sightseeing, neighborhood nightlife] of Phuket tourism might be at risk.

“We have to find solutions. We have to find a way back to generating cashflow, rather than waiting without hope,” he said.

Dr Chayanon also warned that now is the time to look towards long-term solutions to protecting the island’s economy from future “economic shock”.

“This economic shock, or disruption, reminds and teaches us to look for new economic engines for Phuket, so that our economic structure can be more resilient and more agile to protect against further disruption or external shock,” he said.

“COVID-19 is not going to be the last shock. Private organisations in Phuket developed our ‘GEMMSST’ businesses,” he added.

The ‘GEMMSST’ policy is the government and private industry push to develop Phuket in the fields of Gastronomy, Education, Medical & Wellness, Marina Hub, Sports & Events, Smart City and Tuna  in order to become “hubs” for those industries.

“This kind of economic crisis is unprecedented in Phuket,” Dr Chayanon said.

“A good lesson learned from this pandemic is that we have to think of collective interest rather than self-interest. For example, if I am sick, I have to call off going to the party, as I can become a creator of a new cluster. If I still go to the party, it will affect my friends and the whole provincial economy,” he noted.

“I believe in the attractiveness of Phuket from a tourist’s perspective, as we are gifted with natural resources as we call Phuket the ‘Pearl of the Andaman’,” he said.

“I also believe in the professional skills and hospitality of our service staff across tourism businesses, and I believe in the experience of our provincial health authority in disease control measures. “We have knowledge and statistics about how the disease spreads, particularly on our island, which has already been published in respected international medical journals [See Eclinicalmedicine by The Lancet, Oct 2020],” Dr Chayanon noted.

“I think we can pass through this COVID-19 crisis based on our provincial proprietary hospitality spirit and aforementioned resources,” he said.

 

 

The Phuket News