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Source: Thailand Medical News  Jan 06, 2020

Thailand’s Hotel Industry In For Bad Times In 2020

Thailand’s Hotel Industry In For Bad Times In 2020
Source: Thailand Medical News  Jan 06, 2020
Thailand’ Hotel Industry is in for a tougher time in 2020 due to a variety of factors starting with the strong baht that is deterring many travellers from coming to Thailand (in this article we are not considering any fake tourism figures that is constantly being spewed by various agencies) coupled with the start of the global recession. Other contributing factors include the ongoing US-China Trade war and also the start of tensions between US and Iran, projected oil prices increases, Brexit, and also the start of local political tensions, all bode bad signs for the local hospitality industry. Both China and India domestic economies are also being affected which will have an impact on Thailand’s tourism.



According to THN research, there are about 943,000 hotel rooms in Thailand as of 2019 (including illegal hotels and hostels but not including illegally rented out daily residential units ie condos or apartments thru portals like AirBNB etc.) It is estimated that another 157 hotels are expected open within the next 18 months adding another 23,800 rooms.

According to sources (not confirmed and verified), the actual number of tourism arrivals in Thailand is only about 26.2 million ie if one was to remove figures like arrivals from Myanmar, Cambodia, Vietnam, expats coming in and out, long term stays who have their own rented apartments or condos etc.

Average Occupancy rates for 2019 was about 71.3 % with projections that it will fall to about 66% in 2020. Average Daily Rates (ADR) fell by about -3.2% to about US$94.7 in 2019 while Revenue per available room (RevPAR): also fell by -1.9% to US$70.3 (Sources: THN or Thailand Hotel News research)

The OTAs are expected to even lower room rates in 2020 and 2021  as price wars heats up both online and also among hotels.

Many hotels are witnessing a loss of revenue from food and beverage sales and most hotel restaurants are performing badly.

Besides blaming many external factors, many hotel management companies and also hotel owners have to reflect internally as many are still employing dinosaurs as GMs or Heads of departments or having hotel consultants from the same extinct period.

The Thailand hotel industry has greatly changed and consumer behaviour has also changed but many old hoteliers are still stuck in a doing things the old ways. The same goes for Food and Beverage Heads and Marketing and Communications personnel.

Many in Thailand totally lack creativity, innovation skills and are not proactive. It is really hard to find real good Marketing, PR and Communications Heads who can help drive Food and Beverage revenue by motivating FB Heads with creative new ideas. The same goes for the numerous external PR agencies that hotels are using ie literally ‘brain dead’ individuals. What is worst is that many hotels think that online marketing involving facebook or instagram or line is going to help them increase F and B revenue while some even literally ‘commit suicide’ by using the services of online discount or coupon services platforms which eventually tarnishes their brand image and also their reputation while only attracting cheap customers with no sense of taste with will eventually bring down the outlet’s offerings and quality and image.

2020 will mark the start of the downfall of many hotel and hotel management companies in Thailand and unless hoteliers and hotel owners are willing to invest in better proactive and creative staff or external agencies, they will see their revenue going down.

Already many real estate brokerage firms are reporting the most number of hotel properties available for sale in the market compared to past years.

Spheres Marketing and PR  is open to working with hotel groups and hotel owners in a variety of new creative platforms and approaches to help them boost room, F & B and also meeting room revenues. Interested parties are advised to email our teams at drnikhil@prexpress.net for an initial casual chat.
 
 

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