BANGKOK, 20 January 2020: Thailand’s National Tourism Policy Board says a proposal to tax tourists THB300 when they enter the country will be used to rebuild tourism confidence.

Travel companies disagree. They believe the timing is way off when the tourism industry is on its knees and amid a second Covid-19 surge that has stalled domestic travel; the only remaining source of revenue.

One travel company’s CEO emailed TTR Weekly asking: “Have they finally lost their marbles?” Others confided that it was the worst possible time to extract additional cash from the few international tourists who might venture to Thailand.

“It plays into the hands of competitive destinations that will obviously benefit if they can demonstrate empathy with cash-strapped travellers,” another tour operator suggested.   

To be fair the THB300 travel tax has been stewing on the board’s stove for years, six to be exact, and despite it gaining the green light last week there remain serious obstacles to negotiate before final approval. One is the collection process that has left the architects of the proposed tax in a constant muddle.

Would airlines add the travel tax to other fees and taxes included in the airfare? The answer is no unless there was a hefty commission on offer to make it worthwhile. Or would airports have to provide airport counters and queue channels for the thousands of tourists who in normal times jam Thailand’s gateway airports?

Local media latched on to the board’s announcement noting that it would take effect once the Royal Gazette publishes details of the ruling possibly later this month.

Arguments favouring taxing travellers suggest that a portion of the cash payment (The Bangkok Post claimed THB34) would cover a basic insurance package to cover medical emergencies incurred by tourists. Some of them abscond without settling their hospital bills. The remainder of the tax would support tourism marketing, management and development including the restoration of heritage sites.

Based on the latest Tourism Authority of Thailand forecast for 2021, the country could welcome at the most 10 million visitors up from around 6 million in 2020. The 2019 peak year, pre-Covid-19, registered just short of 40 million tourists. When you multiply the 2019 total by THB300 you have an enormous war chest for the government to tap, but Covid-19 changed all that. Today the arithmetic is not so compelling. Although THB3,000,000,000 should not be sneezed at, there is the risk that it could be perceived as the proverbial straw that broke the camel’s back in the minds of cost-conscious tourists. They would shuffle off to other shores.

It’s a pity the board made the decision this month. It might hint of a mercenary mentality at play or a sneaky manoeuvre to get yet another tourism-related tax through the net while the industry is preoccupied. It is grappling with a financial crisis, mass closures of resorts and travel companies and a virtual travel lockdown in eight Thai provinces.

In four to five years from now when tourism is back in the driver’s seat support for a tourist tax might be forthcoming from travel trade circles. But until the watchword, “overtourism” returns to haunt us the national tourism board should put the pot back on the stove to stew for a few more years.

As as it stands the process of approval continues with a visit to the Office of the Permanent Secretary for Tourism and Sports where fee rules, collection and other administration matters require further scrutiny before the project goes to the Thai Cabinet for the final stamp of approval.

There is still, time for industry associations to lobby for sanity regarding all travel tax plans that might hinder recovery.

 

 

 

TTR Weekly