The country has several plus points for longer-term visitors who also plan to work, according to tourism minister Phipat Ratchakitprakarn. “The Internet in Bangkok and in many big cities is fast,” he said, while Thailand also offers “service and atmosphere” and a relatively low cost of living.
And, he added, “we don’t tax digital nomads. Their income is generated overseas.”
The next round of tax changes can’t come soon enough for the country’s still-struggling hospitality industry.
“I am sure we can compete in terms of fundamentals but the problem is policy implementation,” said Bhummikitti Ruktaengam, president of the Phuket Tourist Association. He argues that a simple visa application process is needed to attract working travelers.
“They won’t come if they need to fill up a pile of paperwork,” he said.
Longer-term visitors may bring economic benefits, but they can also create problems for the local population, a Migration Policy Institute report points out. Wealthy visitors bring with them rising costs of living, increasing competition for resources and associated tensions “as evidenced in existing hotspots such as Goa and Bali.”
While governments face a hefty set of challenges in marrying a tourism revival with ease of doing business, companies have their own list of concerns.
At established firms, chief financial officers often have little appetite for Airbnb-style worker freedom because of tax issues and other liabilities, according to Simon Hayes, director of the Asia CFO Network.
Yet many business leaders are accepting what their human resources departments already know: Most employers will be forced to keep up with the times.
Business-leisure travelers aside, tight labor markets around the world are giving workers the power to demand more flexibility. Over the next three to six months, Hayes expects more companies to set up remote-work options for those employees who are trusted to get their jobs done on the beach or elsewhere.
There’s a clear willingness to at least consider looser policies around remote work, according to an Asia CFO Network survey of 31 multinational companies across the Asia-Pacific region. But there are also significant concerns, with tax issues and “corporate culture dilution” at the top of the list.
“One issue is navigating the tax, social security, and employment and labor provisions of both countries to ensure compliance in both locations,” said MPI’s Hooper. Another is the risk of triggering permanent establishment rules that may incur corporate tax obligations, she said.
While business-leisure travel isn’t about to overtake other types of travel, it’s still an opportunity for tourism-heavy economies.
“It’s a growing segment but will remain a ‘niche’ segment,” said Margaux Constantin, a partner at McKinsey & Co. who leads the firm’s work in tourism. The potential for high spending on longer-than-average trips makes business-leisure travelers an attractive market, she said.
“It’s not surprising to see that some destinations are actively prioritizing this segment as part of their tourism strategy.”
This article was provided by Bloomberg News.