25.05.2022 Author: Dmitry Bokarev

Thailand’s Tourism Industry and Russia’s Vacation Season Amid International Sanctions

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The COVID-19 pandemic, which swept the world in 2020, hit all sectors of the economy, but tourism was possibly hit the hardest. Tourism was the first to suffer from quarantine restrictions, as it is directly dependent on the freedom of international communication and yet is not a strategically important industry for most states. However, there are countries for which the flow of foreign tourists is a key source of income, and the decline in tourism due to border closures has dealt a serious blow to their economies.

For example, the Kingdom of Thailand, home to some of Southeast Asia’s most popular resorts, is one such country. In 2019, tourists brought in more than $62 billion to Thailand, or about 20% of the country’s GDP. It is worth noting that out of about 40 million foreigners visiting Thailand in 2019, more than 1.4 million came from Russia, thus making Russia fourth on the list of tourist-sending countries to Thailand. This country is one of the favorite destinations for Russians.

In 2020, the pandemic broke out, people stopped travelling to Thailand and Thailand stopped receiving visitors, and from April to September 2020, the country’s level of foreign tourism revenue was at close to zero. An economic crisis developed in the country and mass protests erupted.

Realizing that the country cannot do without tourism, in late 2020 the Thai government allowed foreign holidaymakers willing to undergo a lengthy quarantine to enter the country.

During 2021, restrictions were gradually lifted: by the end of the year, vaccinated nationals of certain countries were allowed to visit Thailand without quarantine. Of course, in 2021, tourism has not yet brought as much money to the country as it did before the pandemic, but the flow of tourists has started to grow, including from Russia.

In January 2022, the Russian Federation ranked first in terms of tourist traffic to Thailand for a while. A total of 23,000 Russians visited the country in January – about 20% of the total monthly tourist flow. In February, 17,500 Russians visited Thailand.

At the end of February 2022, Russia’s military special operation in Ukraine began and unprecedented Western economic sanctions. This included delays at airports around the world for aircraft leased by Russian airlines. Consequently, some Russian airlines have started refusing to fly abroad.

Many Russian tourists who were stranded abroad during the February events found themselves trapped in host countries for long periods of time waiting for special flights to be organized to bring them home.

The fluctuation of the ruble, the disconnection of a number of Russian banks from the SWIFT international payment system and the suspension of Visa and Mastercard cards issued in Russia abroad have created additional difficulties, leaving many Russians abroad strapped for cash.

As a result of all this, several thousand Russians were also “trapped” in Thailand at the beginning of March 2022. The Thai authorities decided to support their country’s guests by providing free visa extensions, lowering hotel rates, and offering Russians the Chinese UnionPay payment system for financial transactions.

Despite the fact that Thailand is one of the main south-east Asian allies of the US, the main initiator of the Russian sanctions pursuit, Bangkok has not imposed sanctions against Russia that could spoil Russian-Thai relations and has not yet been added to the list of Russia-unfriendly countries, which starting in March 2022 now includes 48 states. The Thai leadership justified its position by arguing that an escalation of the conflict could have unpleasant consequences for the entire world, which is still recovering from the coronavirus pandemic, and therefore the conflict over Ukraine should be resolved through diplomatic means.

The situation is now gradually stabilizing: the ruble has levelled out, and Russian airlines with a non-leased fleet are flying abroad. In general, the Russian Federation is resisting sanctions in such a way that Russians have not even stopped vacationing at Thai resorts yet. For example, flights from Russia to Thailand are operated by Thai own planes as well as by Arab companies. Flights from Moscow to Phuket via Dubai (UAE) or Doha (Qatar) are available every day. Therefore, despite the sanctions, numerous Russian tourists are once again preparing to fly to Thailand and Thailand is preparing to welcome them. Moreover, it is preparing for a significant increase in Russian tourist arrivals.

At the end of April 2022, there was a meeting between representatives of the Russian tourism business and representatives of the Tourism Authority of Thailand (TAT) in Moscow. The meeting focused on the Thai leadership’s decision to reduce quarantine restrictions on entry to the country as much as possible, bringing conditions closer to what they were before the pandemic. Speaking at the event, TAT Deputy Director Ravivan Sangchan said her country was looking forward to Russian tourists and would welcome every guest. TAT representatives also said that talks were already underway between Thailand and Russia to allow Russian MIR cards to be used for payments in Thailand. Participants at the event expressed the hope that the flow of tourists from Russia to Thailand will soon reach the level of 2019.

On May 1, 2022, the above-mentioned changes to Thailand’s quarantine restrictions came into force. Vaccinated persons now only need to present a certificate of vaccination to enter, while unvaccinated persons need to present the result of a PCR test, and neither need to undergo quarantine.

Several conclusions can be drawn from the information above. First, the large-scale economic sanctions imposed on Russia by the collective West have not yet produced the effect that their authors hoped for: to reduce the standard of living of the population enough to create maximum social tension in Russia, up to and including an internal political crisis, mass unrest and the destruction of the state. Judging by the number of Russian holidaymakers heading to Thailand’s resorts, this level of social tension in Russia is still a long way off. Second, creating total isolation for the Russian Federation and once again fencing it off from the world with an “iron curtain” proved to be too difficult: in today’s multipolar world, Russia was able to find ways to maintain communication with the regions it was interested in. Third, the influence of the West, primarily the US, even on its Asian allies, is no longer unlimited either: as mentioned above, Thailand is one of the main US allies in Southeast Asia. However, Bangkok did not go against its national interests for the sake of Washington: Thailand needs to urgently rebuild its economy after the coronavirus crisis, and it cannot do so without a revival of the tourism industry. And as long as Russia provides Thailand with a large inflow of tourists, the country is unlikely to join sanctions even under pressure from Washington, setting an example for other states to follow.

Dmitry Bokarev, political observer, exclusively for the online magazine “New Eastern Outlook”.

 


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