22 July 2009
For the past two years, Thailand's tourism industry has been plagued by a number of afflictions including political instability, the global economic crisis and recently the Influenza A (H1N1), all of which have wreaked havoc on the once flourishing industry.
In response, both the Ministry of Tourism and Sports ("MOTS") and the private sector submitted a draft National Tourism Agenda to the Cabinet which consists of several strategies and measures to run from 2009 to 2012. The draft focuses on several areas geared to stimulate tourism: infrastructure, destination development, quality tourism for sustainability, safety and security, human resource development and tourism marketing.
Click here for a summary of the full draft National Tourism Agenda.
Although the full draft is awaiting Cabinet approval, a number of measures have already been implemented given the urgency of the situation. In particular, the Thai Government has approved considerable resources to offer financial and other support to many tourism businesses adversely affected by the recent political and economic problems. The timeframe for some of these measures may be extended depending on the situation.
Cash Flow and Financial Problems
The Cabinet has allowed the Small and Medium Enterprise Development Bank of Thailand ("SME Bank") to offer loans totalling THB5 billion to smaller tourism operators whose businesses do not exceed THB200 million. The maximum lending period is five years with the first year as a grace period. The interest rate for the second year will be the Minimum Lending Rate minus three percent (MLR-3 percent). In the case of prospective borrowers who have no property to put as collateral, the Small Business Credit Guarantee Corporation ("SBCG") will act as a guarantor, charging a fee of 0.25 percent. The loan applications must be submitted by 31 July 2009.
To attract international tourists, visa fees have been waived for tourists from all countries.
The Department of Civil Aviation has cut the landing and parking fees for all airports under its supervision by 50 percent for chartered flights and 20 percent for scheduled flights. The reduction will be effective through September 2009. Meanwhile, the Airports of Thailand PCL have reduced the landing and parking fees for scheduled flights under its supervision by 20 percent until September 2009. As for chartered flights at the Chiang Mai, Chiang Rai, Hat Yai and Don Muang Airports, the landing and parking fees have been cut by 50 percent through October 2010.
During the period of 16 February 2009 to 15 May 2009, the Department of National Parks, Wildlife and Flora cut entrance fees for national parks across the country by 50 percent for both Thai and international tourists.
Tax and Insurance
The Cabinet has approved double tax deductions for expenses incurred for organising seminars and training in the country in order to stimulate tourism spending.
Also, the Thai Government is covering insurance risks for foreign tourists visiting Thailand at US$10,000 each, subject to life assurance companies selected by the Government.
Reprieve for Hotel Operators
The Ministry of Interior is drafting a ministerial regulation to waive hotel operation fees for 2010.
The Metropolitan Electricity Authority and the Provincial Electricity Authority have reduced the electrical guarantee for hotel business operators who have a good record of payment.
The benefits of a thriving tourism industry are many: higher employment opportunities, enhanced money circulation, improved living conditions, boosted infrastructure development, better technology and an enriched cultural milieu in the country. If Cabinet approval is granted, the joint initiative of the Thai Government and private sector to revamp the tourism industry will be a crucial step in getting Thailand's economy back on track.
We will provide further updates upon receipt of the Cabinet's decision.
For inquiries related to this Client Alert, please contact:
Anurag Ramanat (
Swangchit Tricharoenwiwat (
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