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The Volatile Political Situation, Hotel Oversupply and Heavy Competition
 Emerge as Major Concerns for Thailand's Hotel Industry
By Chadamas Chinmaneevong, Bangkok Post, ThailandMcClatchy-Tribune Regional News

Oct. 13, 2008 - PATTAYA -- Tourism-related operators in Pattaya are suffering a double blow from local political problems and the world economic slowdown.

They expect average hotel occupancies in 2008 to drop by 20 percentage points from last year.

During the first nine months of this year, the occupancy rate declined to 50 percent, when compared to 70 percent during the same period last year. Since the clash between the People's Alliance for Democracy and riot police last Tuesday, the rates have plummeted to 30 percent.

Alisa Phanthusak, assistant to the managing director of Tiffany Show Pattaya, said the company had to suspend its new investment plans for the popular attraction.

"This is the greatest crisis for tourism businesses in Pattaya since I have been in business for more than 10 years. We are facing a lot of negative factors, both locally and globally," Ms Alisa said.

Many foreign companies in the Eastern Seaboard have already moved their plants and investments to neighbouring countries such as Vietnam.

Meanwhile, South Koreans have delayed their travel due to the local political situation while the number of tourists from Europe and the United States is gradually decreasing after an increasing number of banks and financial companies have gone bankrupt.

"I dont know how to cope with these problems next year. I only know that I have to work harder and harder," she said.

For Tiffany Show, the number of guests has dropped by 50 percent and that of Korean tourists, its main customers, has plunged 90 percent, said Sahassawat Cholsawat, the assistant sales manager of the company.

Russians represent the only group of customers that still have some potential because they are not very sensitive to political problems, he added.

To draw back tourists, the company has to create new shows.

Rungthip Suksrikarn, the vice-president of Sunbeam Hotel in Pattaya, said foreign tourists were changing their trips to other countries such as Singapore, Vietnam, Malaysia, and Hong Kong.

"We are losing out because of our internal conflicts. Everybody here feels hopeless and we expect an even harder time in the second quarter of next year when the world economic recession bottoms out," she said.

With a 20 percent occupancy rate this month, Sunbeam has to launch promotional campaigns every month to attract customers, according to Ms Rungthip.

In face of the hardships, the hotel oversupply and heavy competition have emerged as major concerns for the industry, Prakit Chinamourpong, president of the Thai Hotels Association, said at the Federation of Thai Tourism Associations meeting in Pattaya.

Some 20,000 hotel rooms -- 8,000 in Bangkok and the rest in resort destinations such as Samui, Phuket, and Chiang Mai -- will be added to the market of 400,000 rooms by 2012, he added.

Besides, the new law that allows licensed apartments to serve tourists would add pressure to hotels, he said.

He said some small hotels, particularly those catering primarily to Chinese and Korean tourists had already resorted to layoffs and pay cuts.


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