Russian exodus puts Thailand’s tourism rebirth at risk as Asia longs for absent visitors

[Hamartia Antidote]

Can Asia’s tourism rebirth happen without the Russians?

The exodus of Russian tourists amid the war in Ukraine has put Thailand’s much-trailed tourism reboot on the line – as it bursts other Asian nation’s dreams of a swift rebound from the pandemic.

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In the first six weeks of 2022, more than 40,000 Russians poured into Thailand – tourists craving a sun-kissed shore far away from the harsh winter of home.

They were beckoned back to the beaches of Phuket, Koh Samui and Pattaya by a welcoming nation whose deflated economy was desperate for an economic lift, having felt the sting of billions of lost tourist dollars amid the pandemic.
But then Vladimir Putin ordered the invasion of Ukraine, and hopes of a quick tourist recovery for Thailand evaporated.

International sanctions have torn into Russia’s economy, slashing the value of the rouble, casting Russian banks adrift from global payments networks and marooning thousands of Russian tourists overseas.

By the start of last week the number of Russians arriving in Thailand had collapsed to just a few hundred. Thai authorities estimate 8,000 are currently stranded across the country’s resorts, some fast running out of cash as money exchanges refuse to trade Russia’s currency – “RUB 0:000” is listed in exchange windows – and scrambling to get around blocked credit cards with cryptocurrency payments.

From Sri Lanka and Thailand to Bali and Vietnam, the economic impact of events far away is forcing Asia’s tourism-reliant businesses, from resorts to tour operators and jet ski renters to trinket stores, to scramble for new markets, just as they had reopened to old ones.

Sergey Malinin, a Russian tour operator based in the Thai resort town of Pattaya, saw a glimmer of light at the end of the tunnel when the pandemic began to ease in Thailand. But then the war came to extinguish what optimism he had been able to muster.

“Now with conflict, international sanctions, the fall of the rouble, I don’t know what to expect next,” he said.

Since July last year, when Thailand began taking its first tentative steps towards reopening with the Phuket “sandbox” scheme (whereby vaccinated foreign travellers do not have to undergo quarantine) and a “Test & Go” plan to ease travel for vaccinated visitors, the kingdom has had more tourists from Russia than any other country.

Phuket’s immigration department said more than 55,000 Russians arrived on the island between November 1 and March 6 alone.

But since the invasion of Ukraine sparked punishing sanctions against Russia, arrivals have dried up with countless anecdotes on Thai social media of hotels, hospitals and restaurants unable to process payments by Russian guests.


“They can’t use MIR (the Russian payments system) because Thai financial institutions don’t support it yet and they can’t use cryptocurrency either,” said Bhummikitti Ruktaengam, president of the Phuket Tourist Association, adding that China’s UnionPay may offer a way around the cash crunch “but many Russians do not have that system”.

He said regional airline Thai Smile Airways was looking at ways to help about 20 per cent of the trapped Russians return to their ports of origin in Siberia on the cheap.

“The most important thing right now is to help these stranded Russian tourists home,” he said. “Our business recovery can wait.”

Of course, Russian tourists spend in other nations too and their absence is even more acutely felt as much of the world remains closed to Chinese travellers, who for two years have been unable to leave China without a long quarantine period on their return.

Vietnam plans to open its borders to foreign visitors on March 15 in a bid to revive its estimated US$30 billion a year tourist sector. Some 646,000 Russian tourists arrived in 2019, according to state media, a sign of increasingly cordial ties between the two countries and changing tastes for adventure.

But the war in Ukraine has also burst Vietnam’s dreams of a swift tourist rebound. Hoteliers in Khanh Hoa, home to beach town Nha Trang, have warned in state media that the reopening is likely to fall flat without peak season Russian spenders at their resorts.

‘Survival mode’​

Russians on Indonesia’s resort island of Bali have also face financial issues. When tourist Konstantin Ivanov, 27, tried to withdraw money from his home bank account at a cash machine, the transaction was blocked. “We have been left completely stripped of our finances, it’s like they have been completely frozen,” he said.

Tens of thousands of other Russians call the island home. Nina Ryckewaert, there for seven years, said she was on a “roller coaster of emotions” pondering her family’s situation in Moscow and her Bali friends’ financial troubles. Her mum was supposed to visit recently but had to postpone the trip to ensure that “when she leaves, her finances are secure”.

“Imagine you work your whole life and you lose everything because money devalues so much. I don’t have investments in Russia but I work closely with people who are struggling [with sanctions],” said the 33 year-old entrepreneur.

“It was like this too, with the last economic crisis. I’m worried about my mum. We’re in survival mode now.”

Ryckewaert was born in Russia but raised in Belgium, entitling her to a Belgian passport and bank account. She has also opened an Indonesian bank account, which many of her compatriots in Bali are now also attempting to do.
She said many have visited local banks “and waited for hours, even days to open an account to transfer money from Russia”.

Bali is a popular tourism destination in part because it offers tourists value for money, as it is generally cheap to live well on the Hindu-majority island.

More than 158,000 Russians flocked to Bali in 2019, each spending around US$2,000 per two-week visit, according to the government’s data.
Ryckewaert said Bali was a popular destination for online influencers. “Most [well-known Russian] bloggers go, it’s a privilege to have the resources to live in Bali. It [offers] nice visuals, contents … it’s a nice, Instagrammable place. A lot of [Russian] business managers or cryptocurrency people, too.”

Ryckewaert said she knows of a couple of Russians who have returned home “because they’re afraid that they will be here without money”. But she also said tho who “understand how they can move their money” will probably try to leave Russia now and go elsewhere, including Bali.
Russian-owned businesses catering to their compatriots have cropped up in recent years in Canggu, Ubud and other parts of the island. These places, however, might lose potential earnings from Ukrainians like Marianna Ciereszynska.

“Russians here create their own communities, it’s a close-knit community. A lot of them don’t speak English and they don’t have friends from other countries,” she said. “They go to different restaurants. They have their own school. It’s all Russian services - I think it’s a problem.”
Ciereszynska said financial troubles had also hit “a lot of Russians here who stay quiet and have anything to do with their own government”, adding that she now asks Russians business owners what they think of the war in Ukraine before spending money with them.
“Now I ask, ‘Do you support it or not?’ If they support it, I won’t give them my money,” said the 34 year-old mother of one.

Trouble ahead​

For Alexander, a stranded Russian tourist in Phuket, the clock is ticking. He plans to leave Thailand on March 17 but his cash is running out and he is uncertain which airline will take him home.
“I hope I have enough to last until I get to Moscow,” he said, giving only his first name. “We’re waiting for the flight home to be arranged by airlines or the government.”

Russian tourists have been caught out before.
The value of the rouble collapsed in 2014 amid a domestic economic crisis, decimating Russian tourists’ package tours and promoting a fire sale of investment properties across Southeast Asia.

Many operators then pivoted to families or FITs (free, independent travellers) offering new experiences away from the mass tours which focused on Pattaya on Thailand’s eastern seaboard.

By 2019 – just before the pandemic struck – the numbers of Russians visiting the country had rebounded to 1.5 million, who spent around US$3.3 billion, according to Thai authorities.

In total, a record number of foreign tourists spent a combined US$63 billion in Thailand that year.

The exodus of Russian tourists puts the much-trailed tourism reboot at risk, worsened by the flaring Covid-19 outbreak in Hong Kong and a US travel advisory cautioning against visiting Thailand because of spiking Omicron cases.

For Russians who may seek an escape from their own imploding economy, there are currently no direct flights to Thailand, although routes through the Middle East with Emirates, Qatar and Turkish Airlines are operating.

“But the prices for tickets have sharply increased. It’ll lead to very big trouble in terms of demand,” said Andrey Snetkov, general manager for Southeast Asia of TEZ Tour, one of the biggest tour operators in Russia.

A collapsed rouble “will also tremendously affect the buying power of Russian-speaking travellers – not just from Russia – but their neighbours … Kazakhstan and Belarus as well,” he said.

With the year barely under way, Thai tourism authorities are now pivoting to Indian, Middle Eastern and Australian visitors with targeted campaigns.

The pandemic has been brutal on the country’s tourist-reliant areas, but Bhummikitti of the Phuket Tourist Association, said nothing now comes as a shock after two ruinous years.
“In Phuket we’ve learned to be resilient, there’s never going to be a smooth ride,” he said. “What will be, will be.”