Thailand’s 5-Star hotels squeeze small operators with discounts

In this file photo taken on September 30, 2020 a lone customer walks past a swimming pool at the Vijitt Resort in Phuket, which has seen a lack of tourists due to ongoing restrictions relating to the l coronavirus. - AFP

BANGKOK, March 9 (Bloomberg): A stunning plunge in international visitors during the pandemic has been a disaster for Thailand’s tourism industry, decimating the ranks of small operators and leaving the landscape dominated by luxury hotels.

"Most hotels in key tourist destinations, such as Phuket and Samui, have been hit hardest, with some 80% of those hotels remaining closed since the first lockdown last year,” Marisa Sukosol Nunbhakdi, president of the Thai Hotels Association, told Bloomberg TV on Tuesday.

About half of workers in the economically critical sector have lost their jobs, she said.

Thai hotels have been forced to compete on price to capture the domestic market as restrictions such as a mandatory two-week quarantine deter deeper-pocketed foreigners.

Tourist arrivals to Thailand slumped to 6.7 million in 2020 -- their lowest level in at least a dozen years, down from nearly 40 million in 2019 -- and could fall as low as 3.2 million this year, according to the government’s economic planning agency.

Tourism accounts for about 20% of Thailand’s economy -- among the highest levels in the world, according to the World Travel and Tourism Council -- with foreign visitors providing more than $60 billion in revenue in 2019. Now, luxury hotels are slashing prices and offering other perks in a desperate attempt to stay afloat.

A 20-billion baht (US$649 million) government campaign to support domestic tourism through subsidies on hotel rooms and airfare has helped boost occupancy rates.

However, smaller operators with 2- or 3-star ratings can’t compete with the packages on offer from luxury chains, and would just lose money if they opened in this environment, Marisa said in a separate telephone interview. Many of these smaller hotels will go out of business if foreign holidaymakers don’t return soon, she said.

"Not being able to welcome tourists for over a year now, we’re urgently requesting the government to reduce the lockdown days,” she told BTV.

The Bank of Thailand cites uncertainty about foreign tourist arrivals as a "major risk” to the economic outlook.

"Thailand’s tourism industry is dependent on the foreign travel market,” Bangkok Airways Pcl Chief Executive Officer Puttipong Prasarttong-Osoth said Monday in his capacity as president of the Thai Airlines Association. "While money from the domestic market can help sustain some operations, the scrapping of all quarantines remain the most helpful way to support the travel industry.” - Boomberg
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3

Next In Aseanplus News

Asean News Headlines as at 9pm on Tuesday (April 13)
Indonesia keeps Sinovac, says best shot is one that’s available as Covid-19 total goes above 1.577 million
Soaring pandemic issues for Thailand as country records more than 900 cases for third day in a row
Philippines' Duterte says will 'waive' Covid-19 vaccine; DOH reports 8,571 new cases, total at 884,783
More than 59,000 Vietnamese people vaccinated; nine new Covid-19 cases reported on Tuesday (April 13)
Singapore: Four student pass holders arriving from India among 14 imported cases on Tuesday (April 13)
K-Research slashes tourism revenue estimates for first half of 2021 by Baht130 billion
Indonesian police arrest six suspected terrorists linked to Makassar Cathedral bombing; Cyclone Seroja death toll now 148; 47 still missing
Vietnam: Vingroup eyeing whopping US$60bil valuation for car unit in potential IPO in US
China-India border dispute: latest round of talks fail to ease tensions

Stories You'll Enjoy