Over 3 million jobs have been lost in the hospitality & tourism sector in Thailand since the outbreak of Covid-19 in March 2019.
A lot of the people who have lost their jobs have either entered into new industries, moved back with family to assist with the family business, or just decided enough is enough and started their own business.
With demand expected to reach pre-Covid levels by 2024, we have decided to look further into whether Thailand, as so many other countries, will face a skills shortage in the hospitality & tourism industry; an industry that contributed over 20% to Thai GDP in 2019.
How did we get here?
In 2019, pre-Covid, hospitality & tourism contributed 21.9% to the Thai GDP, there were just shy of 40 million international visitors, and there were 6.27 million employed in the industry. Everything was great.
That all came crashing down very quickly in 2020, as we know, with the industry drastically reducing its contribution to GDP to 6.78%, with only 6.7 million international visitors and nearly 2 million losing their jobs, cutting the labour force by 30% to 4.37 million.
2021 has not been much better. A lot of establishments kept their staff on board for as long as possible, even with furlough and government help. But when the third wave came in April, those establishments did not have the cashflow, reserves nor leverage any longer to keep their staff and had to close for good. According to the Tourism Council of Thailand, 36% of all hospitality businesses closed with an estimated 550,000 jobs lost during quarter 2 in 2021. It has been estimated that just over 1 million jobs have been lost in 2021, decreasing the labour force by a further 25%, to 3.34 million.
Given that Thailand’s GDP relies significantly on foreign tourism income, the domestic tourism market alone is not sufficient to bring the tourism revenue back to 2019 figures; the industry’s recovery depends on a resurgence in international travel.
Have we bottomed out in 2021?
Recovery appears to be on the horizon for Thailand’s hospitality & tourism industry. After a successful “sandbox” approach in Phuket, the Thai government commenced a phased reopening of the country, on 1 November, allowing fully vaccinated tourists from over 60 low-risk countries to visit with one day of quarantine, provided they pass a COVID-19 test upon arrival.
Assuming virus recurrence, slow long-term growth, muted world recovery, and minimal changes to global tourism strategies, Thailand’s hospitality & tourism sector could potentially recover to pre-Covid levels by 2024.
The demand is slowly coming back
I asked Jay Tindall, the Co-founder & COO of Remote Lands, a luxury tour operator, whether there was demand coming for 2022 and beyond.
“A ton of demand is coming for next year and we are very busy with requests. Not pre-Covid levels yet, but about halfway there. It all looks very encouraging even though some of our biggest markets aren’t even open yet, like Japan.”
The reopening has welcomed tourists globally, with top visitors coming from Thailand’s key source markets—the United States, Germany, and the United Kingdom. However, of the nearly 40 million international tourist arrivals in 2019, China was one of the main contributors to Thailand’s tourism income, accounting for more than 27% of 2019 revenues with 10.99 million Visitors.
Given the current approach of the Chinese government toward international travel, the road of return for Chinese visitors to Thailand may be a long one. However, the situation may change rapidly, particularly in these volatile times.
The Fiscal Policy Office predicts that 2022 will bring 6 million international visitors, with the Director-General Pornchai Thiraveja pointing out that if Chinese nationals are permitted to travel again, that number will increase to 7 million.
The outlook for 2023 is even more bullish, with Siam Commercial Bank quoting that over 25 million international visitors will enter Thailand.
Staff shortage abroad
If Thailand is expecting the same number of visitors by 2024 as in 2019, over 3 million people need to be entered back into the hospitality & tourism labour force. However, the US and UK they are having a large crisis finding people to re-enter the hospitality industry after the Covid pandemic.
In a recent poll of 13,000 job seekers in the US, more than half of hospitality workers said they wouldn’t go back to their jobs. Over a third said they were not even considering re-entering the industry. Meanwhile, the UK's hospitality industry is experiencing rising worker shortages, with job vacancies at their highest levels since records began. Industry bodies say one in five workers has left the sector since Covid.
Some in the industry say a major contributor to the staffing problem could be the hospitality industry itself, with its perceived culture of very long working-hours and low wages putting applicants off, and driving people away.
Many hospitality teams now feel they were viewed as a number, a mere cog in the wheel. Those who thought they were crucial to the establishment were often let go with what felt like ease.
The individuals the industry relies on for success are leaving in droves as the industry they have given much of their lives to has failed them. The industry stopped investing in them, and they have now stopped padding its investments. Some companies eliminated training and continued to drive low wages, yet they asked more of employees. More establishments are looking towards robotics and artificial intelligence (AI) for solutions.
Robotics and artificial intelligence
If Thailand is to hit pre-Covid levels again by 2024, it must on-board just over 3 million people into the industry. That seems difficult and ambitious, but Robotics and AI will help with this over the coming years. However, the jobs that will be displaced will be mundane and repetitive tasks. Cleaning floors & rooms, cutting and preparing basic foods, washing dishes and room service, to mention a few. Some establishments will turn to self-service as a method to cut down on labour needed.
The core of hospitality is the human element, to be of service to others. The human element will be very difficult to replicate, but understanding the dynamics of technology, we cannot dismiss that robotics may in the future be able to take on a larger range of job tasks. However, for now, that is still many years away – whether we like it or not, robotics and AI are here to stay.
What is needed?
What is needed is a better skilled labour force. The days are gone where managers hire just to hire and have two or more staff performing similar job tasks. Better trained personnel, who are up-skilled, re-skilled and cross-trained, not only in hard skills such as English language and services skills but also soft skills.
Soft skills such as empathy, attentiveness, communication, and self-management, among others, are what is now required from the future hospitality worker. Furthermore, they are to be trained in how to work alongside robotics and artificial Intelligence, as these will be tools used to help improve the overall guest experience of the establishment.
About the Author: Michael F.J. Clarke is CEO & Co-founder of Kingsmen Hospitality Services. For further information please contact mclarke@kingsmenhospitality.com
Series Editor: Christopher F. Bruton, Executive Director, Dataconsult Ltd, chris@dataconsult.co.th Dataconsult’s Thailand Regional Forum at Sasin provides seminars and extensive documentation to update business on future trends in Thailand and in the Mekong Region.
