Dec. 20, 2004 - Bangkok's leading deluxe hotels, particularly those catering to business travellers, plan to raise room tariffs for corporate clients next year by as much 8-10 percent to make up for rising costs as well as boost yields.

For many hotels in the capital's central business district, this will be the first increase in so-called "corporate contract prices" since 2002.

Rates have remained flat as hotels were reluctant to raise prices in the face of the poor economic environment caused by such factors as the Sars outbreak of early last year.

Specifically, major players such as The Sukhothai on South Sathon Road and the Four Seasons Hotel Bangkok on Rajadamri Road are poised to raise their corporate rates by 8-10 percent and 5-6 percent, respectively, next month.

George Benney, general manager of The Sukhothai, said the increase would give Bangkok's deluxe hotels the opportunity to improve their yields, which have been restricted in the last few years, now that the market seemed more prepared to accept the rates.

As many as 80 percent of The Sukhothai's guests are corporate clients while 70 percent of the Four Seasons Bangkok's guests are business travellers.

Corporate rates at deluxe Bangkok hotel rooms vary according to the types of clients and deals, from $80 to $150 a night, excluding applicable tax and 10 percent service charge, according to a hotel executive.

Meanwhile, the hotels have opted not to hike their published tariff rates for general guests -- now in the range of US$280 for a standard room per night plus tax and service charges, though discounts of up to 30 percent are generally given to the most preferred guests.

The Oriental Hotel Bangkok boosted its published and corporate rates in October by 5 percent. The timing was described as its annual tariff adjustment.

The corporate room rate for the most standard accomodations at The Oriental is roughly in the range of $160-180 per night plus-plus, compared to the $330 published rate.

In spite of the hike in corporate rates, the average price for a night's stay in a Bangkok deluxe hotel is still very attractive in this region, some 25 percent lower than Singapore's.

The American Express Global Business Travel Forecast for 2005 indicated that room rates for mid-range and upper-range properties would rise by 1-3 percent next year, but rates in Asia-Pacific would rise by 3-4 percent, spurred by economic growth, particularly in India and China, are driving occupancies, said Matthew Davis, director for Global Consulting Services at American Express.

"Supply will be limited for the short-term due to the lengthy building process. In particular, the fastest-growing economies and those most severely affected by the shocks of the past few years will be under the heaviest pricing pressure in 2005," he said.

The global economic recovery is fuelling heightened business travel demand around the world, with particularly strong demand between Europe and North America, South America and across the Pacific, said Mr Davis.

American Express also forecast that next year average airfares for economy seats will increase by up to 3 percent, and international business fares by 2-5 percent.

For the Asia and Pacific region, economy airfares on domestic flights will rise by 3-4 percent, while fares for international flights and business-class seats will increase by 4-5 percent.

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(c) 2004, Bangkok Post, Thailand. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail [email protected]. AXP,