Hotels in Bangkok and Pattaya are laying off staff in an attempt to cut labor costs as the novel coronavirus takes its toll on Thailand’s tourism sector. According to figures from the Thai Hotels Association, about 50 percent of the average hotel’s staff are on temporary contracts, and these will be the first to leave when demand falls.

Hoteliers in both cities have reported a drastic drop in the number of arrivals from China, which has severely affected those hotels that rely heavily on Chinese tourism. In some Bangkok hotels, Chinese tour groups make up 80 percent of occupancy but have now plunged to zero, and in Pattaya, where Chinese guests account for about half of all international arrivals, the figure has fallen to five percent. With China’s ban on outbound tour groups still active, the numbers are not expected to return to normal for at least another month.

As a result, hotels are letting temporary staff go, relocating permanent staff to other sites that still have good occupancy rates, or asking staff to take leave. But because of the sheer number of hotels in Bangkok and especially in Pattaya, and the fact that the first quarter of the year is considered the peak season—meaning that hotels will have already hired their temporary staff well before the coronavirus epidemic broke out, in preparation for the tourist influx—thousands of jobs may now be at risk.

The THA estimates that there are over 50,000 hotel rooms in Bangkok and 100,000 in Pattaya. At an approximate headcount of 200 staff per 250 rooms, that means the industry employs 60,000 temporary staff, many of whom may now be let go.

Supawan Tanomkieatipume, president of the THA, said that while some hotels still have a sustainable occupancy rate now, the layoffs may really kick in next month. “Normally hotels will hire short-term staff during high seasons, but when the market is soft they'll shrink workforces to comply with weaker demand,” she said.

The World Travel and Tourism Organization has expressed fears that the novel coronavirus will inflict serious and lasting damage on the industry, despite the quick action of the Chinese government to mitigate its spread. Gloria Guevara, the president and CEO of the WTTO, said last month that previous outbreaks had already shown that actions such as closing borders and cancelling flights often have a more severe economic impact than the outbreak itself. The hoteliers in Bangkok and Pattaya, and the thousands of temporary staff whose jobs are now at risk, would probably agree.