Economic Slowdown Hitting Hoteliers in Pattaya, Phuket and Chiangmai

Hotel businesses in Pattaya, Phuket, Chiangmai are all beginning to feel the pinch of the strong baht and also the global trade wars and the start of the global economic recession, as many are reporting extremely low occupancy rates despite the fact that government agencies are saying that tourism number are booming. No one is sure who is spreading the fake news, the hoteliers or the government agencies.


Empty Hotels, A Common Sight

Typically, most hotels in the popular beach cities and also in mountainous Chiang Mai would be fully booked during the high season, but this year the overall occupancy rate is 69% according to many hoteliers.

The surging local currency has made foreign travellers more price-conscious. They are very fewer Europeans who spend more. All that Thailand is getting these days are lower end Britains, Russians, Chinese and Indians who all do not spend much, and worst most are coming here to either find work or even engage in businesses (both legal and illicit).

Pattaya is normally a first-night stay for many foreigners visiting Thailand, according to a study. They then choose to stay the other nights on Koh Samet in Rayong or in Bangkok before flying home. But these days, Pattaya seems quiet.

The slowdown in hotel business also stems from changes in behaviour, especially by Chinese tourists, who tend to travel independently in small groups instead of buying tour packages.

These budget travellers prefer walk-in booking when they arrive at a destination, or they use a sharing-economy platform to enjoy lower costs for accommodation.

According to the authorities, Pattaya continues to attract some 450,000 visitors daily. The top three tourist groups this year are Chinese, Indians and Russians.

One local tourism spokesperson told Thailand Hotel News that the Indian market has shown strong potential, with visitors still travelling in groups of 20-30 people, particularly for incentives, bachelor parties and weddings. Bollywood productions use Pattaya as a shooting location, inspiring Indians to visit Thailand. Average spending for Indian tourists is 10,000 baht per person per day, compared with 5,000 baht for Chinese visitors.

For Chiang Mai, the hotels there are even in a worst state as occupancy levels for the high season is only about 58%. Most of the Chinese travellers there prefer to stay illegally in short term rentals of condos and houses by private owners.
Phuket is no different, though the tourists areas on the island are slightly busy at night, the hoteliers are complaining of the worst ever high season they have ever witnessed.

Meanwhile TAT governor Yuthasak Supasorn has announced that responsible tourism will be the flagship project next year. The agency aims to cut plastic waste from the tourism industry in half in 2020. There was no mentioned about strategies to boost tourism arrivals besides cutting down plastic waste.