“Today, nearly all hotels on the island have bank loans. There are only a few hotels that do not have loans with the banks. This leaves many businesses on the island exposed to critical risk from not being able to make loan repayments during the current economic situation,” said Mr Bhurritt, who also owns and operates the Patong Resort Hotel as the General Manager.
“Some hotels may still be able to re-negotiate their loans or restructure them if they still have assets that they can use as collateral, but many hotels have been closed for a long time without any form of revenue, so it makes no sense for banks to be foreclosing on unpaid loans and seizing a property that will not make any money,” he added.
“We need the government to make a deal with the banks in order to help hotels and other tourism-related businesses on the island. If this does not happen, many hotels and tourism businesses are likely to go bankrupt,” he warned.
“Worse, once these businesses close permanently, [beyond Phuket] hundreds and thousands of employees will be laid off, and that will aggravate the economy even further,” he said.
Mr Bhuritt also called for serious representation be sent from Bangkok to assess the actual economic impact the COVID crisis is having on Phuket.
“In this situation, we need a proactive person to come to see Phuket as fast as possible,” he added.
Mr Bhurritt warned that lack of government intervention on bank loans could push enough tourism-related businesses into bankruptcy to cause a downward spiral for the industry that would take years to recover from.
His concerns echoed those of TCT President Chairat Trirattanajarasporn, who late last month warned that the industry as at a “tipping point”, with 30% of tourism-related businesses believed to have already “exited the market” in the first half of this year, a trend that could spell heavy long-term damage to the industry as a whole.
Many related businesses were terminating their operations or selling off assets, choosing not to wait for an uncertain recovery, with those most heavily affected being tour operators, bus services with small vehicle fleets, restaurants, souvenir shops and hotels that used to focus on foreign tour groups, especially the Chinese market, Mr Chairat explained.
Phuket Chamber of Commerce (PCC) President Thanusak Phungdet agreed that the industry was now at a critical juncture, especially now with businesses under threat from bank loan repayments.
“The tipping point is all the businesses now facing problems making repayments to banks, because hotels and other businesses simply do not have the money to pay back the loans,” he said.
“This will of course directly affect all the staff at these businesses who will become unemployed,” he added.
Mr Thansuak also called for a top-level representative from Bangkok to come to Phuket to assess the true situation on the island, someone “who can help us in practical terms”, he said.
“I don’t care who it is, but it must be someone the Prime Minister listens to and trusts,” he said, without acknowledging that Deputy Prime Minister Jurin Laksanawisit was on the island for exactly that purpose less than two weeks ago.
“We also ask that the Bank of Thailand send someone to Phuket along with the CEO of each bank to hear firsthand the problems owners of hotels and other businesses are facing right now,” he added.
“Third, we expect the Centre for COVID-19 Situation Administration [CCSA] to choose Phuket to be the first province to receive tourists from abroad, then the CCSA can use Phuket as the model for other provinces to use in receiving international tourists,” Mr Thanusak said.
Bhummikitti Ruktaengam, President of the Phuket Tourist Association, has already called for Phuket airport to be allowed to receive direct international flights, stating with chartered f lights and private jets, saying the province already has three hotels accredited as “Alternative State Quarantine” (ASQ) venues.
At present, Phuket has three ASQ facilities. Another 16 hotels are awaiting approval.
Mr Bhummikitti said tourists in ASQ will help drive the industry and are likely to stay longer than the 14-day quarantine period, while tourists under travel bubbles may have a shorter length of stay, he told the Bangkok Post.
The province is preparing capacity for up to 20,000 tourists a day with 50 ICU beds equipped for coronavirus cases, he added.
The plan to open the province to chartered flights and become an ASQ destination was discussed with the Phuket Governor Narong Woonciew late last month. The idea of welcoming private jets from Malaysia, Hong Kong and Singapore will be discussed later, he said.
“If Phuket cannot get international flights until the end of the year, then the province will have only B80 billion in tourism inf low, compared with B440bn last year,” Mr Bhummikitti said.