March 30, 2011--Thai hotels enjoyed the highest occupancy rate in three years in the first two months of this year after local political conflicts had eased, according to the Thai Hotels Association (THA).

Advance hotel reservations for April are also at a record level in three years, said Prakit Chinamourphong, the THA president.

In January and February, the THA reported the average occupancy rate for hotels nationwide was 75-80%, up from 65-70% in the same period last year. Occupancy in Pattaya and Phuket was about 80-85%, Chiang Mai 70-75%, and Bangkok 75-80%.

For advance reservations during Songkran, hotels in tourist destinations such as Pattaya and Phuket are almost fully booked, while the figure is about 70% in Chiang Mai, up from 40-50% last year. In Bangkok, the occupancy rate during the festival will be 50%, compared to only 20% last year.

"This is the first time in three years that we have seen such a bright prospect in the hotel business," said Mr Prakit. "If the trend continues until the end of the year, we strongly believe that the 2011 projection of international tourist arrivals at 16.8 million won't be hard to achieve. In January alone, tourist arrivals increased by 11% to 1.79 million."

Mr Prakit added that local politics remained a key concern for hoteliers. If the election in late June or early July goes smoothly, the overall industry should clearly improve in the latter half of the year.

With this positive sign, the THA projected a ongoing price war in the hotel industry would gradually ease. Many hotels will maintain their room rates to remain competitive. However, some would increase rates by 3-5% at most.

Normally, hoteliers increase their room rates by around 5-8% per year. But Thai hotels have cut or maintained their room rates since the end of 2008 due to the impact of political and economic problems.

"Hotels in Phuket and Pattaya will increase room rates by around 5-8%, depending on areas. Bangkok hotels, especially in the Ratchaprasong area, can see their rates pick up while those in other areas cannot because of oversupply," he said.

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