Thailand Plans Open Borders for High-Spenders on Private Planes

(Bloomberg) -- Thailand's plan to target high-spending foreigners to kick-start its travel sector has a green light after winning Cabinet approval and additional support from the nation's aviation regulator.

The Southeast Asian nation lifted on July 1 a near-total ban on foreign travelers. The majority of arrivals in the initial phase will be foreigners with direct ties to Thailand -- such as those with businesses, major investments or family in the country. The Civil Aviation Authority of Thailand added a clause to also allow those who have “special arrangements” with the government.

“Many in the high-spending, high-income groups avoided direct impact from the pandemic, but couldn't come here because of travel restrictions,” Chula Sukmanop, director general of the CAAT, said in an interview Tuesday. “I've spoken with private aircraft operators who said they have plenty of potential customers looking to charter a plane to here.”

The “special arrangement” group widens the market for “big spenders,” whose applications could be treated on a “fast-track basis that requires case-by-case approval,” Chula said. The biggest proportion of visitors in the initial phase will qualify through one of the travel-bubble agreements Thailand makes with other nations, he said.

“There will be a lot of competition from other tourism-dependent countries for the ultra-luxury segment,” Somprawin Manprasert, chief economist at Bank of Ayudhya Pcl, said in a phone interview. “This won't do much to help the many small hotel operators in the country,” he said, adding that “it's not enough to compensate for overall revenue lost.”

In its meeting Tuesday, the Cabinet as expected approved a plan to allow in Hong Kong, Singapore, South Korea and Japan passport holders starting this month, provided they can prove that they will deliver economic benefits or investments. People from some Chinese provinces will also be given clearance.

More countries will be added to the bubble list as early as next month, depending on the risk situation in each territory, Chula said.

A national curfew, tight border controls and near-universal adoption of face masks has enabled Thailand to limit its coronavirus tally to just over 3,100, with 58 fatalities. No local transmissions have been reported for more than a month, prompting the Cabinet to remove most business restrictions effective July 1, on top of easing the border lockdown.

“Any risk now is from abroad,” Chula said. “We've been free of local infections for over 35 days now, so what's scaring people is the infection-growth rates in other countries. Some Thais have asked us not to open up the country and bring in risks, but we have to do it for the economy.”

The central bank's latest forecast is for 8 million foreign arrivals this year -- one-quarter of the 2019 tally -- and barely half of its previous estimate. The tourism ministry estimates total revenue from the travel sector of 1.23 trillion baht ($39.7 billion) in 2020, down 59% from last year. Thailand's economy is expected to contract as much as 8.1% this year.

©2020 Bloomberg L.P.