Thailand is facing a labor shortage in the hospitality and tourism industry


By Richard Mehr

Labor shortage in the hospitality and tourism industry is not a new problem, this situation has been ongoing for several years but the pandemic has made it far worse.

Following weak operations in 2020 and 2021, the hospitality and tourism industry will continue to see depressed conditions through 2022.

The first shoots of recovery may start to break through from the end of this year and throughout 2023 and 2024, but it could take at least 2-3 years for foreign tourist arrivals to return to pre-COVID level, according to Krungsri Bank Outlook Report 2021-2023.

With global travel crashing by a record-breaking rate of 74% from 2019 level. The hardest-hit were the Asia-Pacific region (-84%), with severe drops in arrivals in Singapore (-85.1%), Thailand (-83.2%), South Korea (-85.6%) and Japan (almost -90%).

In Q4 of 2021, TAT announced in November 2021 that Thailand would welcome between 400,000 to 700,000 foreign visitors for the year, it is a long way from the 40 million tourists pre-Covid, in 2019.

In response to this unprecedented situation, hoteliers had no other options but to adapt to this situation by overhauling their operations.

For example, they had slashed room rates, change the range of services they offer, switched focus to domestic tourists, cut overheads, and sought alternative sources of revenue in related areas.

According to the Thai labor department, a little over 3 million jobs have been lost in the hospitality & tourism sector since the outbreak of Covid-19 in March 2019.

Many workers who have lost their jobs have either entered into new industries, moved back with family to assist with the family business or started their own business.

Despite a lot of efforts, many 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 2021, those establishments did not have the cashflow, reserves nor leverage any longer to keep their staff and had to close temporarily or 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 over 1 million jobs were lost in 2021 only, decreasing the labor force by a further 25%, to 3.34 million from the 6.27 million in 2019.

Although there were some glimpses of recovery for end of 2021 and 2022, the latest cancellation of the Test&Go, will slow down drastically foreign arrivals to the Kingdom affecting the tourism industry and ancillary services.

The shortage of employees in the hotel and travel industry is not only in Thailand, everywhere around the world, there is a labor crisis. Hoteliers are yet to face their biggest challenge, finding qualified employees if not employees at all.

Many workers in the hotel industry do not wish to return working in the sector, a major contributor to the staffing problem is its perceived culture of very long working-hours, work overload and low wages driving people away. Many hospitality employees feel they are viewed as a number, disrespected and were let go too easily.

These individuals, the industry relies on for success, are leaving in masses as they feel the industry which they have given so much of their lives, and made sacrifices, has failed them.

Some companies have even stopped investing in their employees, eliminated training, staff recognition, awards and rewards and continue to drive low wages, yet they asked more of their employees.

It should not come as a surprise as to why many hotel employees are reluctant to return to the industry and new comers walking away.

If Thailand is expecting the same number of visitors by 2024-2025 (in 2019 the hospitality and tourism sector represented 21% of Thailand’s GDP), maybe it is time for the Thai Government to create professional schools, teaching and preparing the new generation the tricks of the trade, rather than rely on hotels and qualified hotel staff to train new employees.

Maybe time has also come for the hospitality & tourism industry to review and improve their working environments, starting with their human resource department, changes are taking place as we are now entering a new era and there is no room for conservatism.