Disruption buster:
The pandemic has upended the economy, leaving everyone guessing as to what the next steps are, write Post reporters
‘‘ Standards will be raised across the board to ensure customers can have confidence in us. WUTTIKIAT TECHAMONGKLAPIWAT President, Robinson
This year AAV will definitely end on a loss.
TASSAPON BIJLEVELD
Executive chairman, AAV
Dusit will adopt technology to create virtual tours on the website and applications.
SUPHAJEE SUTHUMPUN
Group chief executive, Dusit International
‘‘ Within the cycle, a customer may have as many as 3-4 packages for debt restructuring.
PITI TANTAKASEM
Chief executive, TMB-Thanachart Bank
What the real new normal in this sector will be is still unclear.
SOMCHAI LERTSUTIWONG
Chief executive, AIS
We expect many businesses will be disrupted by the pandemic.
KRIANGKRAI TIANNUKUL
Vice-chairman, FTI
As more businesses get ready to reopen on May 17, whether businesses are equipped to handle the relaxed conditions remains a question, along with what is in store for them as the virus wreaks havoc worldwide.
After the first round of relaxation and reopening of small premises last week, the second round, the opening of shopping malls and large retail outlets selling construction materials, is set for Sunday.
China and South Korea will also be the first countries to be removed from a list of the government’s dangerous communicable disease zones.
The return to normal is not likely to happen overnight (or ever, according to some) as restrictions are gradually dropped amid speculation about what the new normal will entail.
TWO OR THREE QUARTERS?
Wuttikiat Techamongklapiwat, president of Robinson, the SET-listed department store operator under Central Group, said that once the pandemic is over, the top priority for almost all retailers is to ensure that health precautions for employees are in place to provide services to shoppers. This comes along with a large number of preventive and protective measures at complexes, be they social distancing, hygiene, extra screening and cleaning, or full cooperation and support when dealing with health authorities.
“Standards will be raised across the board to ensure customers can have confidence in us, as they are believed to have become more careful,” Mr Wuttikiat said. “Safety measures will tighten beyond customers’ expectations.”
Innovative marketing campaigns and new marketing events are expected to be rolled out in droves.
“We believe that in the early reopening stage for retail malls, the majority of people will stay home because the overall economy remains bearish and all businesses have yet to recover from being gutted by the pandemic,” Mr Wuttikiat said. “We can expect 6-8 months to go by before we see a gradual improvement in the retail business.”
FLICKER OF GROWING DEMAND
Tassapon Bijleveld, executive chairman of Asia Aviation (AAV), the majority shareholder of Thai AirAsia (TAA), said the hospitality sector was the front-liner knocked out by the pandemic and will be the last to recover, even though many countries, including Thailand, are easing restrictions.
But travel activity will slowly regain momentum within 3-4 months, he said, and the trend will start in wisps from the domestic market.
Mr Tassapon said international markets will take longer time to come back. In the best-case scenario, international flights may resuscitate during the fourth quarter when Southeast Asia travellers start to shuffle about the region again.
But the airline does not anticipate business recovering 100% by January 2021, as the toll of the impact will carry on for at least one year.
“This year AAV will definitely end on a loss,” Mr Tassapon said. “We have to tighten our belt because the soft loan we are poised to receive from Export-Import Bank will be enough for partial payroll support, not the whole operation.”
At present, TAA has 62 aircraft, vastly outnumbering competitors, and it remains committed to this scale, even though many airlines are downsizing fleets to streamline operating costs.
“But if the situation gets worse, we may have to lease our aircraft, so layoffs are the last option,” Mr Tassapon said. “Hopefully we don’t have to do that.”
While every airline is trying to stop bleeding, TAA cannot carry any additional burden that would fall to airlines, such as the previous policy that required passengers to show health certificates before boarding.
Mr Tassapon said travel sentiment will become apparent once the business restrictions in every country are lifted. Signs of this can be witnessed at many of TAA’s destinations, mainly in China.
“We can trace a glimpse of growing demand from advance hotel bookings as guests from China, Hong Kong, Singapore and Malaysia are starting to look for holidays in November and December,” he said. “But for European guests, it’s still quiet.”
When taking off again, TAA will try to maintain healthy and balanced guest portfolios, of which Chinese markets make up 30%.
TRIPLE-A SERVICE
Suphajee Suthumpun, group chief executive of Dusit International, said the company has already prepared short- and long-term plans to resume business. While hotels cannot yet open their doors to guests, Dusit is using the opportunity to train staff in new service standards that will apply to all hotels and to renovate hotel facilities such as lobbies and swimming pools.
To raise standards in the long run, the company will run the Dusit New Normal scheme, which consists of five key changes to services in the aftermath of the virus.
The innovation will focus on technology introduced before the outbreak to help gather and analyse data and enhance the customer service experience.
Hotel platforms will have features that engage with customers at every stage, from pre-arrival and during the stay to the poststay period.
Ms Suphajee said Dusit will adopt technology to create virtual tours on the website and applications that allow guests to check services and facilities to help them make decisions.
Dusit also plans to offer Triple-A services that allows guests to request anything, anywhere at any time, such as flexible checkin and check-out times, as well as 24-hour room service.
In addition, customers will receive the Triple-P package or personal protection pack, consisting of hand sanitiser, alcohol spray, face mask, gloves and special shoes as an additional welcome gift.
RESKILLING
Piti Tantakasem, chief executive of TMB-Thanachart Bank, said the debt-relief package will remain banks’ priority during the outbreak and after the pandemic, but they need to prepare an infrastructure base, IT systems and human resources to handle the exit of companies, SMEs and individuals from debt relief measures after the country’s partial lockdown is lifted.
Business activities are expected to pick up after the government relaxes the lockdown in phases. Debtors with improved debt-servicing ability may want to pay more or exit the bailout, Mr Piti said.
Banks’ workload after the pandemic could be higher than when customers entered into debt deferment, which has been the blanket measure set by lenders. After the pandemic, banks must offer tailor-made solutions to match each debtor’s demand and debt payment capability, Mr Piti said.
“For instance, a borrower who has participated in the debt relief measures could be recruited or earn high income, so he or she will want to honour more debt,” he said. “Within the cycle, a customer may have as many as 3-4 packages for debt restructuring.”
The bank has found that taxes are another problem creating higher costs for customers when they exit the debt restructuring process for some loan products.
This issue must be discussed with the regulatory bodies, Mr Piti said.
Although the pandemic appears to be a catalyst for online banking that could lead to more branch closures and layoffs in the future, Mr Piti believes banks need a larger workforce to deal with debt restructuring after the pandemic.
Bank staff remain necessary but will need to be reskilled to fit new jobs, he said, adding that the pandemic will speed up reskilling and upskilling of employees at banks and in other business sectors.
REAL NEW NORMAL?
Digital transformation is being sped up by the coronavirus outbreak, and the trend has permeated all aspects of work and people’s daily lives.
Somchai Lertsutiwong, chief executive of Advanced Info Service (AIS), the country’s top mobile operator by subscribers, said the new normal is being formed through work and business approaches in the wake of the pandemic. How the real new normal will manifest remains to be seen when the dust settles, he said.
“What the real new normal in this sector will be is still unclear,” Mr Somchai said. “But we have to monitor it closely.”
For the telecom sector, data consumption continues to surge in line with new economic development, despite the fact that telecom operators’ results have been slightly restrained by the outbreak.
The pandemic and rapid digitalisation in the overall economy is creating two critical issues in the industry.
Firstly, AIS is facing both opportunity and challenges as to how to ride the wave of rapid digital transformation.
In 2020, the company aims to embark on a new paradigm of operational management in line with the digitally driven era, Mr Somchai said.
The company will have three focal points: engaging in more partnerships, creating digital platforms driven by data analytics and cloud technology, and generating increasingly sustainable development for society and the environment.
The challenge is in seeing what approaches should be taken in dealing with the new normal going forward, Mr Somchai said.
Second, this is the time to restructure AIS’s operational management and reskill all staff to be more efficient in the face of the new business landscape. Workforces need to be prepared for future challenges.
“The new normal requires a new arrangement of all resources of the company to ensure efficient management,” Mr Somchai said.
Kriangkrai Tiannukul, vice-chairman of the Federation of Thai Industries, said that after the pandemic all businesses are expected to adjust and change their business strategies to keep up with the new norm.
“We expect many businesses will be disrupted by the pandemic, but this will also create new opportunities and new businesses,” he said. “High technology and innovation will be increasingly adopted by the business sector to support and facilitate operations.”
According to Mr Kriangkrai, digital channels will be the main driver for business after the crisis, and the trend is global due to social distancing practices.
He predicts e-commerce will flourish, forcing retailers to quickly roll out their omnichannel selling approach.
“Overall retail business, in particular, is expected to hasten changing its business model after the pandemic because people prefer shopping online and home delivery services,” he said. “This will ignite growth for e-payment channels.
“Everyone is worried about the contagion, so they are opting to apply more technology to protect themselves from the pandemic.”
Likewise, healthcare and medical service businesses are apt to use more robotics and automated systems to support their operations to protect medical staff from the very contagious virus.