Apr. 18, 2003 - The troubled Thai hotel industry would have to lay off a significant number of its employees if the financial woes triggered by the Sars epidemic are not resolved in the next three to four months, an industry executive has warned. 

Prakit Chinamornpong, secretary-general of the 400-member Thai Hotels Association (THA), said "quite a few" hotel jobs would be axed as a result of the downturn caused by travel fears. 

He said the growing alarm of the Severe Acute Respiratory Syndrome had caused significant damage to the hotel industry, with occupancy rates dropping to a mere 30-40 percent. 

Some THA hotel members were now encouraging their staff to "take vacations" while taking extra steps to save electricity and water, he said. "Some hotels now turn off the lights on some unoccupied floors." 

A staff member of a large hotel chain said he was encouraged by the management to take leave without pay for the summer. 

Despite the end of the war in Iraq, Mr Prakit said there was no sign that the industry would benefit substantially, but it could rebound by the end of the year if Sars was contained and there were no post-war terrorist acts. 

To stay afloat, hotels and travel agents are focussing on local tourists by launching several "irresistible" campaigns. 

Top hotels including The Oriental Bangkok and the Grand Hyatt Erawan have introduced special packages while more than 100 hotels nationwide are offering record-low room rates. 

Charoen Wangananont, president of the Association of Domestic Travel which organised the programme, called the campaign the "second bullet" after the launch of 500-baht-per-night room rates at 10 hotels, including the Rama Gardens in Bangkok and the Imperial Phu Kaew in Phetchabun, last week to spur the domestic tourism. 

He said the promotion offered a 30 percent discount from the rates offered to travel agents, making them the lowest ever given to the public. The campaign will run from May 15 to Oct 31. 

Participating hotels include the Phuket Arcadia, Imperial Mae Ping, and Krabi Meritime. 

"This is the worst time for the hotel industry ever. Never have such offers been made," Mr Charoen said. 

However, people interested in the offers have to make reservations at the Consumer Fair, to be held from May 1-4. All Thai airlines will also offer attractive fares at the event. 

In addition to more modest hotels upcountry, world-class properties such as The Oriental have joined the fray. Its "One night at The Oriental" package, from now until September, is aimed at local residents and costs 9,999 baht net for single occupancy and 12,999 baht net for double occupancy. It includes a superior room for one night with breakfast, one set dinner for two at Lord Jim's or the Barbecue terrace, one Oriental Massage for two and welcome amenities. 

Meanwhile, the Grand Hyatt Erawan is wooing the local market with its "Hyattractions" campaign until June 30. The programme was unprecedented for the five-star hotel, said Pajaree Bhatayanond, the hotel's marketing communications manager. 

She said that for every 1,200 baht spent at any of the Grand Hyatt Erawan's restaurants and bars, customers would receive one certificate. Ten certificates can be exchanged for a two-night stay at the hotel. 

The combined effect of the war and the Sars will affect hotels' balance sheets. 

William Heinecke, chairman of SET-listed Royal Garden Resort Plc, said he expected the Sars impact would be short-lived and the industry should recover soon. Besides, he said, investors in the hotel's shares were looking for a long-term investment. 

Thanomsri Fongarunrung, an analyst at Merrill Lynch, said the drop in occupancy rates would surely affect the performances of listed hotels. However, she was not sure whether it would significantly affect share prices, as hotel shares were not very liquid. 

In another development, the Tourism Authority of Thailand will launch a tourism festival called the "Thaksin Travel Mart" in Krabi to stimulate the market in the South. 

Some 160 tourism and hotel operators from 14 southern provinces will participate, offering services to more than 500 tour agents nationwide. 

In related news, AFP reported the government had shortened an obligatory home quarantine for residents returning from Sars-affected countries from 14 days to 10, but maintained other emergency measures to contain the virus. 

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(c) 2003, Bangkok Post, Thailand. Distributed by Knight Ridder/Tribune Business News.