Hotels Feeling The Squeeze

[sbk]

Hotels feeling the squeeze

Occupancy rates fall as operators blame politics and currency

Published on September 6, 2007

Hotels feeling the squeeze

With hotels nationwide reporting a drop in occupancy rates, a Chiang Rai vendor takes a snooze as tourists, his main target, grow ever more scarce.

Hotel operators around the country are reporting declining average occupancy rates and blaming the country's political problems and currency fluctuations.

Thai Hotels Association (THA) vice president Prakit Chinamourpong said hotels in most regions were running at lower occupancy rates than in the same period last year.

However, Tourism Authority of Thailand (TAT) governor Phornsiri Manoharn has reported a 3.3-per-cent increase in tourist arrivals in the first half of the year and says the lower hotel-occupancy rates are due to the fact that there are more hotels and not fewer tourists.

THA figures show that the average occupancy rate for small hotels in Bangkok last month was 70 per cent, down from 78 per cent in August 2006. For big hotels, last month's rate was 71 per cent, down from 77 per cent last year.

The occupancy rate for hotels in Hua Hin and Cha-am fell from 50 per cent in August 2006 to 45 per cent last month. In the Northeast, the figure dropped 20 per cent from 50-60-per-cent occupancy in August 2006.

At Pattaya's hotels, the average occupancy rate last month was 56 per cent, down from 68 per cent in August 2006. However, hotels in Phuket and Khao Lak showed an increase of 10-20 per cent to reach 40 per cent last month, due mainly to the recovery of tourism along the Andaman Coast.

The THA said listed political unrest, currency fluctuations and fears of more bombs in Bangkok and other major tourist destinations as the main factors contributing to the decline. In reporting the figures to the TAT yesterday, the association urged the authority to rebuild the industry.TAT's Phornsiri responded by saying tourist arrivals in the first half of the year totalled 6.9 million, up 3.3 per cent year on year. She said the number of visitors had been increasing gradually and that TAT expected to reach this year's target of 14.8 million arrivals."The average hotel-occupancy rate is decreasing because more hotels are opening," Phornsiri said.

In order to boost the number of inbound tourists, the TAT is increasing its international trade shows and foreign roadshows from three or four events a year to eight to 10.

The latest event involved promoting Thailand's tourism products in southeastern China. Phornsiri said the TAT hoped to attract close to 1 million Chinese tourists this year, especially "high-end" travellers.

The Amazing Thailand campaign is being pushed in China by billboards proclaiming "Amazing Thai Gau," Phornsiri said. The agency plans to work with Visa Card in China during the 2008 Beijing Olympics, offering lucky draws. Its promotions at the Olympics will also target tourists from third countries, especially those from Europe, who are in China for the games.

She said TAT would promote the formation of I Love Thailand Clubs in more countries, including Japan and South Korea. The first club was recently set up in Fukuoka, Japan.

"The tourism sector is expected to improve in the final quarter of this year, due to the clearer political picture from the general election," she said.

Suchat Sritama

The Nation

[xbusman]

Well, that story just does not add up.

Tourist arrivals up 3.3% but hotel occupancy down anywhere from 10 to 20%. It could be an increase in rooms but that would mean around 18% increase in rooms year on year. I dont track hotel construction but that just does not feel right. If available rooms grew at all, I would guess a few percentage points. That means someone is being less than accurate, could be the THA but I doubt it. Their main job would be to tell everyone how great the hotel business is and expand membership, sounds like they are complaining about too much capacity in this article.

I always get the feeling that there is something strange in the TAT numbers. For ten years, I have watched each season "look" thinner and thinner but the numbers continue to march off into the stratosphere. I always put it down to my visiting touristy places less and less but when I do it looks like a ghost town compared to just three years ago. Interestingly enough, when I used to visit Cambodia 10 years ago, it really was a ghost town. I am always amazed when I go back now how increasingly busy and almost fourth world it is. Up in Siem Reap they cant build hotels fast enough and the place is loaded with tourists. Perhaps BKK is really becoming a hub of travel for SE asia and tourists are simply transiting. Maybe the new Thai destination of choice is Roi Et and we just are not seeing them in the all the usual places. My friends who own retail or tourism based businesses in Bangkok and Pattaya all are reporting the worst tourism season ever (at least in the past 7 or so years) but businesses love to cry during the slow season so nothing new there, but still this seems to be exceptionally slow.

I would love to get to the bottom of TATs numbers, they just dont add up for me but then again, its hard to judge.

[soundman]

Well, that story just does not add up.

Tourist arrivals up 3.3% but hotel occupancy down anywhere from 10 to 20%. It could be an increase in rooms but that would mean around 18% increase in rooms year on year. I dont track hotel construction but that just does not feel right. If available rooms grew at all, I would guess a few percentage points. That means someone is being less than accurate, could be the THA but I doubt it. Their main job would be to tell everyone how great the hotel business is and expand membership, sounds like they are complaining about too much capacity in this article.

I always get the feeling that there is something strange in the TAT numbers. For ten years, I have watched each season "look" thinner and thinner but the numbers continue to march off into the stratosphere. I always put it down to my visiting touristy places less and less but when I do it looks like a ghost town compared to just three years ago. Interestingly enough, when I used to visit Cambodia 10 years ago, it really was a ghost town. I am always amazed when I go back now how increasingly busy and almost fourth world it is. Up in Siem Reap they cant build hotels fast enough and the place is loaded with tourists. Perhaps BKK is really becoming a hub of travel for SE asia and tourists are simply transiting. Maybe the new Thai destination of choice is Roi Et and we just are not seeing them in the all the usual places. My friends who own retail or tourism based businesses in Bangkok and Pattaya all are reporting the worst tourism season ever (at least in the past 7 or so years) but businesses love to cry during the slow season so nothing new there, but still this seems to be exceptionally slow.

I would love to get to the bottom of TATs numbers, they just dont add up for me but then again, its hard to judge.

I am with you xbusman.

Not at all hard to judge or add up. The easy answer is the TAT numbers are complete fabrication to justify budget increases & goodness knows what other concessions.

TAT absolute rort & completely FOS!

Soundman.

[chinthee]

I've never understood these great numbers. I know many Thai people with businesses in Phuket, for example, and they are all moaning of very bad business. Now granted, that always happens during low season, but this year the collective complaining is more than I've ever seen, even after the Tsunami.

I'm not sure what to think about all this. Massive disinformation or Thai Whinging??

Edited September 9, 2007 by chinthee