Opinion | Fleeing Russians bring tourist dollar and development to Asia-Pacific region

By Augustus K. Yeung

INTRODUCTION

One feature of globalization is that you see people moving or migrating from one country or even continent to another. In a way it's good; in a way it's tragic, depending on the circumstances of life.

If globalization of goods and foods such as in the case of China promoting trades among the world's countries, this is good as it leads to economic prosperity; however, in the context of the Russia-Ukraine conflict, this is sad as it leads to people leaving their homes not of their own free will, but being forced by circumstances like wars or catastrophic natural calamities.

Whoever's perspective you adopt, the case of conflict in Ukraine is a modern-day tragedy. And so, we witness young Russians seeking refuge because of war in Thailand.

This social change has brought meager income for Thais like Palawat who can renovate his hotel and turn it into apartment buildings for rent. If the war in Eastern Europe gets protracted, there may be more rich and poor Russians coming.

Perhaps, we should now make a change of scene; switch to Thailand, where Palawat is managing the situation to all parties' advantage.

Through the Eyes of Thais, Business Opportunities May Be on the Rise

Palawat (name withheld) has owned a hotel on Phuket's Patong beach for 20 years. It was closed for much of the pandemic, but the business got back on its feet again months ago thanks to Russians arriving on the Thai resort island.

"I have no funds to renovate my hotel, so I turned it into an apartment building instead," he said of his 20-room property. "Now 90 percent of the customers are young Russians."

Palawat thinks Phuket will see a bigger influx of Russians in the months ahead. He recently doubled the rental to 10,000 baht (HK$2,231) a month to take advantage of the island's popularity among Russians.

For decades, the island's peak season between November and April serves those escaping the winter for some tropical sun, but this year, those fleeing Russia's invasion of Ukraine have found Thailand a place of respite, Palawat said.

"Many young Russians I spoke to have come to Southeast Asia to avoid difficulties, like the military draft, at home. They chose Thailand for the sense of freedom it gives, financially and lifestyle-wise," Palawat said.

"They have a limited budget, but they can stay for as long as six months."

While international sanctions on the rouble in February saw Russians either stranded or scrambling to leave Thailand as their credit cards or cash became invalidated.

By the end of the year, the Thai government expects about 310,000 Russians to have visited, with most of them landing in Phuket, Pattaya and Bangkok.

A few airlines now operate direct flights from Russia to Thailand. Emirates flies from Phuket to both St Petersburg and Moscow. Azur Air operates charter flights between Novosibirsk and flights between Novosibirsk and U-tapao airport, near Pattaya. Ikar Airlines and Aeroflot have also resumed flights to Thailand.

In January this year 23, 760 Russians visited Thailand, the highest among all foreign visitors. More than 55,000 Russians visited Phuket in November, more than double those from India at 26,525, and much more than the few thousand Thais heading to Phuket in the past months.

Malaysians are the biggest group of visitors to Thailand at 1.5 million, followed by Indians at 856,000 and Singaporeans at just under half a million as of early December.

Observers Predicted that Tourism Could Be Thailand's Economic Engine

Observers said tourism, which accounts for about 15 percent of the GDP, could remain Thailand's sole economic engine for the coming months as exports are hit by global economic uncertainty.

Thailand reached its goal of 10 million visitors this year on December 10 but think tank Kasikorn Research Centre said the country could see as many as 24 million visitors next year, exceeding a government target of 20 million for 2023, or about half of the pre-Covid figures. The official international tourism revenue target is 1.5 trillion baht or 80 per cent of the record figure in 2019.

Kasikorn, however, warned that tourists' spending would be curbed by the looming global recess and cost of living crisis. A possible new wave of Covid-19 policy eases could also further delay trips made by Chinese mainlanders.

Despite the challenges, Russians keep pouring money into not only tourism but also Phuket's property sector.

According to Nasupha Suwansri, a property agent in Phuket, Russians have sustained the industry in the absence of Chinese tourists, who are usually the top spenders.

"Since the third quarter, there's been a surge in Russians choosing to make long-term property deals of between six months and one year in the villa rental market," she said.

Most of her customers are families who are willing to spend between 80,000 and 200,000 baht a month for the one-year rent of a three-bedroom pool villa.

"We expect Chinese visitors to return by the second quarter next year," Nasupha said. "But in terms of spending volume, as opposed to unit volume, the Russians are the top property spenders in Phuket currently." (Source: SCMP)

CONCLUSION

Today we see Thais coping with economic hardship by converting dilapidated hotels into apartment buildings for the financial benefit of both the young Russian guests and the Thais. If this war continues, will the influx of "refugees" seep into other ASEAN member states such as the Philippines, Malaysia, and Indonesia, etc.?

If this situation continues, will there be significant changes in the economic system and/or ecosystem of these host countries? Theoretically, any change of this kind will bring about corresponding changes of some kind. For example, as Russians come and go, Malaysian Muslims will be exposed to these foreigners, and more social interaction will bring about cultural change in the future.

How will this change impact the region? Given ASEAN stability, Russian oligarch's wealth may further fuel economic prosperity.

 

The author is a freelance writer; formerly Adjunct Lecturer, taught MBA Philosophy of Management, and International Strategy, and online columnist of 3-D Corner (HKU SPACE), University of Hong Kong.

The views do not necessarily reflect those of DotDotNews.

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