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Hotel Occupancy Set to Plunge 10-30 Points Across Thailand;
Record Number of 65 New Hotels Entering the National Market

By Chadamas Chinmaneevong, Bangkok Post, ThailandMcClatchy-Tribune Regional News

January 24, 2009 - Hotel occupancy will decrease by between 10 and 30 percentage points in all regions of the country this year, according to the Thai Hotels Association (THA).

Echoing the hoteliers' gloomy outlook for the hospitality sector, the Association of Thai Travel Agents (ATTA) has predicted 12 million tourist arrivals this year, 14 percent fewer than the Tourism Authority of Thailand's forecast of 14 million.

The THA expects hotels in Bangkok to see occupancy rates slide by as much as 27 percentage points, the South by 15-20 points, the North 20 points, the Northeast and East 10 points each.

In the first quarter, advance reservations at five-star hotels in the capital are 50 percent, down from 78 percent a year earlier. Other top destinations show a similar trend. In Phuket occupancy has sunk to 48 percent from 82 percent, in Samui to 45 percent from 67 percent, and in Krabi to 18 percent from 34 percent.

THA president Prakit Chinamourphong said tourism would be harmed this year by many ongoing negative factors such as local and global economic slowdowns and concerns about the longevity of the new government.

"In the first quarter of this year, the hotel business faces a very hard time. Above all, we cannot predict the situation in the rest of the year because we believe that some political uncertainty still remains," he said.

Around 65 new hotels with a total of 11,150 rooms will enter the national market this year. Bangkok openings will set a record, having been planned a few years ago when the economy was strong, and a price war looks inevitable.

The association said hotel operators in the North would focus on the local market -- especially the meeting, incentive, convention and exhibition (Mice) segment -- and hope for government support. Hotel operators in the South said international tourists were still concerned about possible airport closures and the government must restore their confidence as soon as possible.

The ATTA expects international tourist arrivals to drop, causing the TAT to miss its target of 14 million arrivals this year. But president Apichart Sankary sees potential for a boost from the Asean Summit next month in Hua Hin. "The Asean Summit is our last hope. If everything goes well, the country's tourism image should improve indirectly," he said.

The steepest declines among international tourists are expected from the US, the UK, Germany and Japan. Arrivals from Scandinavia, France and the Netherlands are expected to hold up better.

China, India, Russia, the Middle East and Korea have high potential, but the ATTA expects only 800,000 Chinese tourists this year, lower than the TAT's forecast of 1.2 million. Chinese arrivals in January are down by 60 percent so far.


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