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Published on January 31, 2008

Hotel and tour operators foresee a tough time this year from several uncontrollable factors, including a global economic slowdown reducing tourist arrivals as the number of hotel rooms increases.

The Thai Hotels Association (THA) said big new hotels featuring more than 30,000 rooms were being developed nationwide and would open between now and 2010. Of these, about 12,000 rooms are scheduled to become available this year.

President Chanin Donavanik said at least 19 big hotels consisting of more than 250 rooms are set to open in Bangkok this year, totalling about 5,000 rooms. The rest will be in major tourist destinations like Phuket, Pattaya, Krabi, Chiang Mai and Phang Nga.

Meanwhile, many serviced apartments will soon turn their premises into hotels following a new hotel law that will take effect soon.

Chanin said the large number of hotels would harm the economy, because many would run into financial problems in view of the effects of the US sub-prime crisis. Moreover, increasing oil prices and negative reports about Suvarnabhumi Airport are threatening the tourism industry's growth.

"It will be a difficult year for the tourism industry," said Chanin.

The THA yesterday briefed hundreds of its members on the latest situation and urged business operators to prepare contingency strategies ahead of fiercer competition.

The association will meet with the new tourism and sports minister as soon as possible about current issues and intends to pressure the new government to come up with contingency plans.

Vice president Prakit Chinamourpong said the average hotel occupancy rate last year was 69.8 per cent, down 7.8 per cent from earlier years that saw an average of 75.7 per cent. This year, the occupancy rate is expected to rebound to only 70 per cent, due to the supply of new hotel rooms.

Amid the bleak conditions, Phuket, Krabi and Phang Nga are expected to stand out.

The THA's southern region reported more than 15,000 rooms from small and big operators alike would be added in Phuket alone this year and that the number of international tourist arrivals would be close to 5 million, or the level seen before the December 2004 tsunami. Still, with environmental concerns and other problems, particularly traffic, most hoteliers there agree the number of chartered flights to the island province should be maintained at the current level.

While the tourism industry in Phuket is expected to do well, due to its worldwide reputation, hotels in nearby provinces like Krabi and Phang Nga, which have seen low occupancy rates in the past few years, are expected to welcome more tourists.

Elsewhere, tough times lie ahead.

The average occupancy rate for hotels in Chiang Mai has already decreased, from 64 per cent in 2006 to 62 per cent last year, while the average room rate increased only slightly.

About 1,200 rooms are planned to open in Chiang Mai this year.

Meanwhile, the occupancy rate for five-star hotels in Hua Hin and Cha-am dropped from 65 per cent in 2006 to 60 per cent last year. The room rate also fell from Bt1,670 a night in 2006 to Bt1,600 last year.

The THA's eastern region said advanced hotel bookings for Pattaya during this year's first quarter had already dropped, because foreigners had postponed their trips to Thailand, especially tourists from Japan and other Asian nations.

Due to several negative factors, the THA planned to hold five trade trips abroad this year in a bid to attract international tourists.

The strong baht has been cited as one cause for the drop. International tourists, especially Japanese, are avoiding Thailand due to the 50-per-cent increase in travelling costs caused by the weakening yen against the stronger baht.

Association of Thai Travel Agents president Apichart Sankary said that was one of the uncontrollable factors that would stifle the growth in international tourist arrivals this year.

Tour operators are calling on the government to lift the number of arrivals by promoting more destinations and tourism products and providing security measures, he said.

Suchat Sritama

The Nation