Thailand is in trouble. Protestors are on the street, the economy is shrinking, unemployment is rising and tourism is crumbling. In the past seven months, foreign visitor arrivals have dropped almost 75%, shaving 1.6 trillion baht (US$53 billion) or 10% off of GDP. The once teeming resort destinations of Phuket, Pattaya and Samui are now ghost towns.
Against this backdrop, Thai authorities are desperately scrambling to develop a recovery plan to kickstart its moribund tourism industry. While authorities talk about of attracting ‘high-value tourists’, the reality is Thai tourism has always been a churn and burn, volume-based game of scale over sustainability.
The current Special Tourist Visa (STV) scheme is an attempt to slowly repopulate the tourism funnel, but it’s really a Rube Goldberg contraption that is both confusing and expensive. Having just gone through the re-entry experience myself, I describe it as paying business class prices to be hermetically sealed in a room for 14 days breathing stale air and eating bad food.
The government has allowed a few small groups of Chinese tourists into the country under the STV scheme and there is talk of more to follow, but it’s hard to see how the authorities can scale this in a meaningful way. While back in the real world, many thousands of long-stay expats, who hold valid visas and are willing to quarantine, cannot return to their homes and families here in Thailand.
To be fair, Covid-19 presents a massive challenge for governments around the world and puts authorities in a no-win situation. Open the borders and risk widespread infection, or keep them closed and suffer economic strangulation. Thailand has done a great job battling the spread of the virus, but it is losing the war in lost jobs and wages. The longer this Mexican standoff between live and livelihoods continues, the harder it will be to resuscitate the economy back to health.
Thailand is already home to around 70,000 middle-to-high income seniors from high wealth source markets like the US, Germany, Switzerland and Japan. Photo Credit: Getty Images/Rawpixel
One area where Thailand can focus attention is retirement living. No country in Asia is better positioned to attract seniors looking for a first or second home. The 50-plus market represents a multi-billion dollar opportunity in virtually every sector of the economy and demographics ensure that it will be a growth market for many years to come.
According to a 2018 Kasikorn Bank report on aging, Thailand is already home to around 70,000 middle-to-high income seniors from high wealth source markets like the US, Germany, Switzerland and Japan. These long-stay seniors bank, invest, buy property, play golf, and use medical and nursing services — all high-value activities that boost foreign direct investment and support key industries.
Thailand has everything it needs to become the retirement capital of Asia; yet, it is woefully incapable of developing a coherent product that is customer and market friendly. Arcane immigration policies, restrictive property ownership rules and convoluted banking regulations are just some of the many disincentives that make long-stay living in Thailand onerous and investing in the country a gamble. As a permanent resident in Thailand, I know all too well the frustrations that expats face getting visas and mortgages.
Covid-19 presents the country’s leaders with a once-in-a-decade opportunity to pivot its strategy on retirement living, like it did with medical tourism in 2003. I know this first-hand, because I was the marketing director for Bumrungrad International Hospital from 2001 to 2007, and part of the country’s transformation from a local healthcare player to an international heavyweight.
Health tourism is a perfect example of how Thailand can turn lemons into lemonade and create long-term opportunity in a disrupted marketplace. The country’s success in this high-value segment is a by-product of three crisis events – the 1997 baht devaluation, the 2001 World Trade Center attack and the 2005 SARS pandemic. In each instance, Thailand’s hospitals and health resorts gained market share and cemented brand positioning by being the fast mover into new markets with differentiated products supported by proactive government policies.
Today, Thailand is a world leader in health tourism, a segment that attracts over three million international tourists annually and contributes 45 billion baht to the economy, because it delivered the right product at the right time to the right audience.
The moral of this story: timing is everything, and Thailand can and should use this crisis to develop new strategies that speed its transformation from a nice place to visit to a great place to live for retirees. As the saying goes, “Never let a crisis go to waste”.
Ruben Toral is a principal with Intermedika Consulting and specialises in branding, business strategy and medical tourism for hospitals, health resorts, governments and investors worldwide.