BANGKOK (BLOOMBERG) - Thailand suspended its domestic travel subsidy programme ahead of the peak holiday season to investigate allegations of irregularities in the government-funded programme meant to help the pandemic-hit tourism industry.
The authorities are looking into complaints of corruption and bribery in the "We Travel Together" programme, which offers up to 40 per cent subsidies for hotel room rentals and air tickets, according to Tourism Authority of Thailand governor Yuthasak Supasorn.
The online platform, which allows people to register for the programme, may be back next week at the earliest, or after the new year, he said.
The travel subsidy programme has been successful in boosting occupancy rates at local hotels hit by the global halt to travel due to the coronavirus pandemic.
It helped boost average occupancy rates to 34 per cent in October, up from a single digit in April, according to Mr Yuthasak.
The plan to offer an additional one million rooms at subsidised rates to travellers has been delayed, he said.
Local holidaymakers were earlier offered five million rooms under the programme that started on July 18.
Without the subsidy programme, Thai hotels may have to offer heavy discounts to lure holidaymakers, which may worsen their financial conditions, according to Ms Marisa Sukosol Nunbhakdi, president of the Thai Hotels Association, who appealed to the government to reinstate the programme.
"Since the government launched the campaign in July, hotels have come to depend heavily on it," Ms Marisa said on Wednesday (Dec 16). "Almost all our customers have made their bookings through 'We Travel Together' campaign. We're afraid that without this campaign, the bookings will disappear."
Thailand is betting on a revival in its tourism industry to exit a recession, with the central bank forecasting it may take at least two years for South-east Asia's second-largest economy to return to the pre-pandemic growth levels.
Foreign tourist arrivals generated more than US$60 billion (S$80 billion) in revenue from about 40 million visitors in 2019.
While Thailand has eased some restrictions on entry of foreign tourists, the industry has struggled to draw visitors as the authorities have retained a mandatory 14-day quarantine on arrival amid a surge in confirmed infections worldwide.
While Thailand has relaxed most of its coronavirus measures to allow businesses to fully reopen, it has retained a nationwide state of emergency to prevent a resurgence in the outbreak.
"Domestic tourism looks very strong, but there's no way that it could make up for the shortfall in international travel," said Mr John Brown, chief executive officer of Agoda. "For the time being, through the winter and through the first to second quarter, international travel will remain at a much lower level."