Tourism on Thailand’s most popular island has bounced back since the pandemic. Now, proposed visitor taxes and uncertainty around cannabis use are placing tourism high on the political agenda.
Almost two years have passed since Thailand’s then Prime Minister Prayut Chan-o-cha personally greeted tourists arriving at Phuket International Airport. On 1 July 2021, during the dark days of Covid-19, he launched the Phuket Sandbox, the first coordinated attempt to rebirth tourism in South East Asia. The surreal event saw the mask-wearing military commander waving, from a measured distance, to 23 vaccinated visitors arriving on a flight from Abu Dhabi. Subsequently, the Prime Minister had to self-isolate for a week after coming into contact with someone who tested positive for Covid-19.
Twenty-three months later, Phuket’s airport is teeming with activity. The departures board features flights to Kuala Lumpur, Ho Chi Minh City, New Delhi, Hong Kong and Krasnoyarsk written in Thai, English and Chinese characters. Gate calls are in English, Mandarin and Russian. Dotted across the tarmac are planes from the UAE (Etihad and Emirates), Qatar, Israel (El Al), Malaysia (Air Asia), Russia (Redwings) and India (IndiGo). Sichuan Airlines and Spring Airlines flights are preparing to leave for Chengdu and Shanghai in China.
Rebuilding Thai Tourism
Tourism is back in Thailand. By the end of June, South East Asia’s most-visited country is likely to surpass its 2022 full-year total of 11.15 million visitors. Phuket is at the forefront. It welcomed more than six million visitors from January-May this year, reaching half of its full-year forecast. Russia, China and India are the top three visitor markets so far in 2023, and travellers from those countries pack the cafes and duty free stores. Facemasks worn by airport staff and a few tourists and a discarded PCR testing cubicle tucked in a corner are the only visible signs of the pandemic.
Airports across Thailand are buoyant and busy, offering dramatic contrasts to the eerily empty departure halls of two years ago. The rebound owes a great deal to the Phuket Sandbox scheme, which was designed to kickstart inbound travel after a 16-month border closure. Thailand was the first nation outside of China to confirm a case of Covid-19 in January 2020. By mid-2021, its vital travel sector had been suffocated. In 2019, Thailand welcomed 39.9 million arrivals, and tourism contributed 12% of GDP. In 2020, 6.7 million visitors arrived in the first three months before the border closed. And then, no more.
Phuket was carefully chosen. A large island with great beaches and tourism infrastructure, it was well positioned to welcome visitors willing to undergo quarantine before travelling onward in Thailand. The Sandbox scheme proved restrictive and complex for tourists to navigate, and timing was an issue. Thailand’s key visitor markets across Asia Pacific either prohibited outbound travel or mandated a quarantine for their citizens upon return. Few flights were available and tickets were costly. The Sandbox lasted three months before it was replaced by a national Test & Go scheme, but Thailand retained some entry restrictions until July 2022.
Chinese Immigration to Phuket
Flying in or out of Phuket on a clear day is delightful. Arching sandy bays set against steep forested hills frame the views. Beach culture is Phuket’s calling card, but the spiritual centre of island tourism has shifted inland. Tourists in search of history, culture and a break from the beach swarm into the newly gentrified Phuket Town. Coffee shops, restaurants, handicraft stores and street food vendors have reinvigorated the pastel-shaded shophouses in the compact centre around Dibuk Road and Krabi Road. Selfie-friendly backdrops are plentiful.
Visitors familiar with South East Asia make comparisons with Penang and Melaka in Malaysia and Singapore – and with good reason. They share similar historical development. The mansions, shophouses, schools and temples in each city were funded and built by immigrant Chinese who had established successful plantation, mining and mercantile businesses.
In Phuket Town, the history of Chinese migration is engagingly told at the Phuket Thai Hua Museum, housed in a former language school. A collection of sepia photographs and historic artefacts documents their arrival to the island from southern China from the late 19th century onwards. As migrant Chinese became more influential, Thai-Chinese Peranakan, or Nyonya, culture developed similarly as in Malaysia and Singapore. Before the pandemic, China was Thailand’s – and Phuket’s – number one visitor market. The country has welcomed over one million Chinese visitors so far in 2023, and Phuket Town is a major drawcard.
Tourism Taxes & Cannabis Politics
The first five months of 2023 have instilled new optimism for Thailand’s recovering tourism sector – but challenges lie up ahead as the rains return and shoulder season commences.
With Thailand expecting to attract at least 60% of its total 2019 visitor arrivals in 2023, some thorny issues await the next Tourism Minister once a new government is formed.
First proposed by the National Tourism Policy Board in January 2021, a controversial THB300 Tourism Tax for all visitors is currently on hold. So is a more recent proposal to introduce a THB1,000 Departure Tax. Both charges are vehemently opposed by the travel industry as disincentives to visit that would likely benefit the tourism economies of neighbouring countries. Tourism in South East Asia is becoming increasingly competitive.
June also marks one year since Thailand decriminalised cannabis, nominally for medical purposes. It sparked 12 months of frenetic innovation in the multi-billion-baht “cannabis economy.” Cannabis tourism is everywhere in Phuket, where marijuana cafés, edibles and drinkables are ubiquitous. Some spas transparently offer “weed massage.”
Leading up to Thailand’s national election on 14 May, concerns were growing about the slow progress to create a legal framework around cannabis. Travel industry figures voiced concerns that tourists could be vulnerable to different interpretations by police and courts across the country. Moreover, with Chinese tourists returning in large numbers, research by Chulalongkorn University showed the issue of cannabis availability trended negatively in the Chinese media. On the other hand, many tourists from around the world are attracted by the open availability of cannabis, which has set Thailand apart from other countries in Asia.
The future of cannabis in Thailand is a white-hot topic. Following the May general election, a coalition of eight parties seeking to form the next government – led by the youthful Move Forward, which garnered the most votes – intends to reclassify cannabis as a narcotic drug. Combined with uncertainty about visitor taxes and fees, this will ensure that tourism remains a hot political issue in Phuket, the birthplace of Thailand’s post-Covid renaissance.
- Asia Media Centre