Thai government to turn off tourism aid after cases of fraud

BANGKOK — Thailand’s tourism industry faces another blow after the government shut the door on more domestic travel subsidies following revelations that many hotel operators had abused the system.

The Thai cabinet earlier this week turned down a proposal by the Tourism Authority of Thailand to extend the subsidy scheme called “We Travel Together” after many hotels and guesthouses were found to have defrauded authorities.

“We badly need the subsidy and the government should extend it as soon as possible, otherwise the tourism sector cannot be revived,” Wassana Srikanchana, president of Hua Hin-Cha am Tourist Association told Nikkei Asia.

Under the “We Travel Together” scheme due to expire at the end of April, the government will pay for up to 40% of a hotel’s room rate, to a maximum of 3,000 baht ($98), per night for six million Thais who have registered for the discount. The scheme was aimed at spurring domestic tourism to help offset the loss of foreign arrivals.

However, Thai authorities have found more than 500 cases of fraud. Some hotel operators and workers registered themselves on the scheme to get government funds for their property, without actual stays. Other hotels marked up their room rates to get the maximum subsidy. Some registered more rooms than they actually had — in one case, a guesthouse with only 12 rooms registered itself as having 100 rooms.

“Such cheating tactics forced the government to not extend the project and order the TAT to instead come up with other strategies to help the tourism sector and close any loopholes that can be exploited,” Anucha Burapachaisri, the government spokesperson, told reporters.

The tourism industry accounts for around 20% of the country’s gross domestic product and generated around 3 trillion baht of revenue in 2019. Two-thirds of that total came from foreign tourists. However, the pandemic led countries to close their borders, causing a sharp drop in the number of foreign tourists in 2020 and forcing businesses to turn to domestic travelers.

But even the government’s subsidies failed to inspire domestic tourists.

In the first 11 months of 2020, data from TAT showed that domestic tourists generated 428 billion baht in revenue, down 56% from the same period a year ago.

Wassana of the Hua Hin-Cha am Tourist Association said the government should focus on reducing the economic impact of the pandemic and seek ways to prevent fraud. “If there are cheating people, the government should find a way to tackle them and punish them. But do not slash a program that can benefit all of us,” Wassana said.

Vorasit Pongkumpunt, a former president of the Tourism Association of Koh Samui, a popular island in the south, said the cabinet’s decision to not extend the project made the situation even harder for hoteliers.

“It is around the time that hoteliers are planning to offer promotions to attract tourists,” said Vorasit. “But the decision not to extend the scheme has thrown everyone, as tourists would rethink if they should travel now that prices are higher with no subsidy.”

The industry is also calling for the country to reopen its doors to foreign tourists. Tourism and hospitality leaders, including chief executives of major hotel chains, have sent a petition to the government asking for the country to open up from July 1 to vaccinated travelers without quarantine requirements.

“As Thailand is starting to vaccinate its most vulnerable and its health care workers, we believe that now is the time to announce a firm and irreversible date to reopen its borders. This will give confidence to international travelers and encourage them to book a trip to Thailand,” said the open letter.

Additional reporting by Masayuki Yuda

Source: Thai government to turn off tourism aid after cases of fraud

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