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Published: Thursday, 02 July 2020

The Covid-19 pandemic, which has badly damaged Thailand’s tourism sector, has provided an opportunity for the country to change its approach away from mass tourism and towards high end tourism, according to Thailand’s Minister for Tourism and Sports, Phiphat Ratchakitprakarn.

In a June 19 interview with Bloomberg News, Phiphat said the sector had become overly reliant on Chinese tour groups and backpackers, and that the pandemic had created the chance to deal with issues such as environmental destruction and overcrowding due to mass tourism. “If we don’t use this chance to create the most benefit for the industry, Thailand will lose out,” he said. “This is an opportunity to reset the entire tourism system.”

Thailand Aims At Upscale Tourism 3

Andy Treadwell, founder of the Singapore Yacht Show, the Thailand Yacht Show, and now the new Hong Kong Yacht Show, welcomes the comments as a positive step. Treadwell says he has been trying to convince Thai government officials of the value of high-end tourism, in particular superyacht visitors, since 2016. Treadwell says though Phipat didn’t specifically refer to yachting in his comments, the focus on high-end leisure was heartening.

“We have been flying that flag to the government for the past four years,” Treadwell says, adding that “governments need to be onside” in such discussions. He estimates that each superyacht charter visit could bring several millions of dollars to local economies, as superyacht charter guests tend to spend money locally, compared to tour groups arranged by middlemen who tend to keep the money in their home countries.

The main reason that the vast majority of superyachts will not visit Thailand – and therefore don’t come to Asia at all – is that they cannot do charter business in the country’s waters, which offsets the cost of moving from the Mediterranean, home to most of the world’s 5,000 plus superyachts. Treadwell says that visiting superyachts currently need to be temporarily imported by a registered Thai company in order to do chartering, paying 7% VAT on the value of the yacht. When the owner decides to leave, the yacht must then be “re-exported” again – a long and unwieldy process – in order to get compensation for the import tax.

This onerous complication has badly limited superyacht tourism in Thailand and in the whole region. For superyachts venturing east from the Mediterranean, the first major stop in an area with cruising and superyacht berths is Phuket, and Treadwell hopes that a push towards high-end tourism will include changes to limitations on superyacht chartering.

Treadwell estimates that less than 1% of the world’s superyachts make their way to Thailand during the winter charter season, despite his impression that many superyacht owners want to make the journey. Most are simply bored of the usual “milk run” between the Mediterranean and the Caribbean every winter, but continue to do so because charter revenues can mitigate up to 50% of the costs of owning a superyacht. Treadwell says that some 200 or 300 superyachts could venture to Thailand and then Southeast Asia, if they could only be sure of earning some charter revenue in these parts and keeping their crews busy and motivated all year round.

On June 30, The Bangkok Post reported that the Ministry of Tourism and Sport indicated that Thailand’s beaches could be open again on a limited basis to international tourists in August. Meanwhile, TTG Asia reported that Thailand’s hoteliers are worried about a move away from mass tourism.

In September 2019, the Thai government said it plans for the tourism sector to contribute 30% of the country's GDP by 2030, up from about 20%.