Mass unemployment in Thai tourism sector looming

The United Nation (UN)’s International Labour Organisation in a recent assessment is painting a bleak picture for Thailand’s tourism industry which has been struck particularly hard by the coronavirus pandemic, estimating that a total of up to six million people are about to lose their jobs in the sector this year, not counting informal workers in the sector.

The University of the Thai Chamber of Commerce likewise estimated that up to six million people in the sector would end up unemployed in case Thailand lost, as feared, over 30 million tourists this year. The chamber’s forecast says Thailand may only see 8.5 million tourist arrivals in 2020, a far cry from the 39.8 million visitors in 2019. The number of unemployed people in tourism could even rise to ten million if the pandemic does not subside by the end of June, the chamber warned.

Ten million jobless people would be almost a quarter of the current official workforce of close to 38 million employed in Thailand. All tourism workers out of jobs would cause the country’s traditionally low unemployment rate to spiral.

Overreliance on tourism strikes back

This would be a massive blow for Thailand’s economy which in the past decades didn’t worry much about its overreliance on tourism which used to officially account – directly and indirectly – for about a quarter of the country’s GDP, but informally even more. In comparison, tourism in Cambodia contributes just 6.7 per cent to the country’s GDP, and 6.9 per cent in Vietnam, according to the UN.

“Thailand’s tourism sector has overcome many past shocks, including natural disasters and political instability, but there may be new emerging sources of risks that may need to be considered,” the UN report said.

“The magnitude of the current socio-economic shocks that come from the health and economic effects tied to the current Covid-19 pandemic are unprecedented in recent history,” it added, noting that “the Covid-19 crisis has come out of nowhere and completely short-circuited the demand and supply parts of the entire tourism economy.”

Tourism sector won’t survive without state intervention: UN

The main issue for the Thai tourism industry is the collapse of inbound tourism. International tourist arrivals in January and February dropped to 5.9 million, compared with 7.3 million in the same months last year. A shutdown of Thailand main international airport in Bangkok in April brought tourism arrival numbers basically to zero from that month onwards, and the reopening for arriving international flights is still not on the cards.

The UN warned that Thailand’s tourism sector would not survive the pandemic’s repercussions without assistance from the government.

“The millions of workers that earn their livelihoods from the sector will not be able to support themselves and their families for long through wage cuts, or worse, job losses, without government assistance,” the report said.

As immediate relief, the Thai government is offering up to 100 billion baht ($3.1 billion) in soft loans for tourism operators and will also return deposits for tourism licenses to help improve working capital levels for tourism companies.



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The United Nation (UN)’s International Labour Organisation in a recent assessment is painting a bleak picture for Thailand’s tourism industry which has been struck particularly hard by the coronavirus pandemic, estimating that a total of up to six million people are about to lose their jobs in the sector this year, not counting informal workers in the sector. The University of the Thai Chamber of Commerce likewise estimated that up to six million people in the sector would end up unemployed in case Thailand lost, as feared, over 30 million tourists this year. The chamber’s forecast says Thailand may only...

The United Nation (UN)’s International Labour Organisation in a recent assessment is painting a bleak picture for Thailand’s tourism industry which has been struck particularly hard by the coronavirus pandemic, estimating that a total of up to six million people are about to lose their jobs in the sector this year, not counting informal workers in the sector.

The University of the Thai Chamber of Commerce likewise estimated that up to six million people in the sector would end up unemployed in case Thailand lost, as feared, over 30 million tourists this year. The chamber’s forecast says Thailand may only see 8.5 million tourist arrivals in 2020, a far cry from the 39.8 million visitors in 2019. The number of unemployed people in tourism could even rise to ten million if the pandemic does not subside by the end of June, the chamber warned.

Ten million jobless people would be almost a quarter of the current official workforce of close to 38 million employed in Thailand. All tourism workers out of jobs would cause the country’s traditionally low unemployment rate to spiral.

Overreliance on tourism strikes back

This would be a massive blow for Thailand’s economy which in the past decades didn’t worry much about its overreliance on tourism which used to officially account – directly and indirectly – for about a quarter of the country’s GDP, but informally even more. In comparison, tourism in Cambodia contributes just 6.7 per cent to the country’s GDP, and 6.9 per cent in Vietnam, according to the UN.

“Thailand’s tourism sector has overcome many past shocks, including natural disasters and political instability, but there may be new emerging sources of risks that may need to be considered,” the UN report said.

“The magnitude of the current socio-economic shocks that come from the health and economic effects tied to the current Covid-19 pandemic are unprecedented in recent history,” it added, noting that “the Covid-19 crisis has come out of nowhere and completely short-circuited the demand and supply parts of the entire tourism economy.”

Tourism sector won’t survive without state intervention: UN

The main issue for the Thai tourism industry is the collapse of inbound tourism. International tourist arrivals in January and February dropped to 5.9 million, compared with 7.3 million in the same months last year. A shutdown of Thailand main international airport in Bangkok in April brought tourism arrival numbers basically to zero from that month onwards, and the reopening for arriving international flights is still not on the cards.

The UN warned that Thailand’s tourism sector would not survive the pandemic’s repercussions without assistance from the government.

“The millions of workers that earn their livelihoods from the sector will not be able to support themselves and their families for long through wage cuts, or worse, job losses, without government assistance,” the report said.

As immediate relief, the Thai government is offering up to 100 billion baht ($3.1 billion) in soft loans for tourism operators and will also return deposits for tourism licenses to help improve working capital levels for tourism companies.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

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Donation Total: $10.00

 

 

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