The Thais are now fully prepared to seize the tourist market with their SMILES strategy. What about us?

China’s “dynamic zero Covid” policy should have paid off, or the country would not have announced to relax entry requirements for visitors from 125 countries beginning July 2, including Malaysia.

China’s anti-virus policy has been extremely rigid for the past two years, and as such, the sudden announcement to relax travel restrictions must have been made with some political factors in mind.

Indeed, the main purpose of president Xi Jinping’s visit to Hong Kong in conjunction with the city’s 25th anniversary of handover to China a couple of days ago has been to restore the confidence of foreign investors as well as local consumers in Hong Kong towards Mainland China.

A survey conducted shortly before Xi’s visit showed that most foreign businesses in the territory have hoped for further relaxation of entry requirements.

The Chinese government has done just that, because it knows it must be more open if it wishes to maintain at least 5.5% of GDP growth this year, as it cannot wholly count on domestic investments.

In 2019, China registered 145 million inbound tourists but the number plunged 81.3% to only 27.2 million the following year, while the number of outbound tourists was a mere 20.23 million, down 86.9% year-on-year.

Here in Malaysia, the number of inbound tourists slumped 83.4% y-o-y in 2020, and the travel-related industry suffered over RM100 billion loss. In the same year, the entire world’s tourism sector saw a whopping US$1.3 trillion loss ($3.5 trillion throughout the pandemic). Asia was the hardest hit, with tourist arrivals plummeting 84%.

Most countries in the world have gradually relaxed their travel restrictions. Now that even China has jumped into the bandwagon, can we anticipate a massive wave of “revenge travel” very soon?

Well, this should have been the case if not for the war between Russia and Ukraine which has sent energy prices soaring, and triggered an acute food shortage and the resultant inflation worldwide.

So, for the time being, “revenge travel” is only for the filthy rich, not for the middle class or the poor.

The fast depreciating ringgit exchange rate has significantly increased the cost of traveling overseas. As a consequence, many can only opt for cuti-cuti Malaysia instead. However, we can still pin our hopes on steady recovery of the local tourist industry with an anticipated influx of tourists from countries with more robust currencies such as Singapore, Greater China and the West, boosting the revenues of local aviation companies, hotels, F&B as well as retail outlets.

Among our regional competitors, Indonesia, Thailand and Vietnam boast much more competitive and diverse tourist resources than us, and they are also much more aggressive in their marketing strategies.

Thai prime minister Prayut Chan-o-cha said confidently while officiating a recent tourism convention in Phuket that Thailand will very soon emerge once again as the world’s most popular destination.

Tourism has always been the mainstay of the Thai economy, and the government has been working very hard to develop high quality travel products catering to foreign tourists.

They have unveiled the SMILES (Sustainability, Manpower, Inclusive economy, Localization, Ecosystem and Social innovation) strategy to enhance the country’s tourist industry sustainably while adapting to the ever changing world.

Speaking at the tourism convention with his mask off, Prayut asked the participants: Are you ready? And the audience replied in unison: Yes!

The entire country is prepared to revive their tourist industry. We cannot deny that the Thais are a very creative lot. They are now fully prepared to seize the tourist market with their SMILES strategy. What about us?

We have set up way too many task forces. It’s now time to start our own SMILES task force!