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Thai tourism feeling the strain
Andrew Wood
Up to August 2008, eight months into the year the Chaophya Park
Hotel, a four hundred room 4 star deluxe hotel in Bangkok was exactly on
budget and on target to achieve its Gross Operating Profit (GOP) for the
year 2008. The YTD occupancy was 79% and total hotel revenue from all
revenue streams was 8% ahead of last year. And then came September 2008.
 A
scenic view at Koh Samui.
During this month political demonstrations broke out into the street and
Government House came under siege (as it is today, some 2 months later).
Bloody clashes with the police led to 2 deaths and 400 demonstrators
were injured. Newspapers and the TV carried headlines and pictures for
the entire world to see. Calls for the PM to step down by the opposition
parties and the demonstrating People’s Alliance for Democracy (PAD) were
reinforced by the four highest ranking generals of the army, air force,
navy and police appearing together on TV asking the PM to step down.
The newspapers called it a ‘coup by TV’. The PM refused to step
down.
There is daily talk in Bangkok that the generals will do something, but
most people are uncertain what they can do to resolve the political
deadlock. How they will run the country is also unclear, after an
earlier coup in 2006 to oust then PM Thaksin Shinawatra showed that the
military were inept at successfully running the country and the armed
forces are frankly VERY reluctant to take that course of action once
again so soon.
The likely outcome is the PM will eventually step down and either the
house will be dissolved followed by a general election, or more simply
that a new PM will be put in place that might be more politically
acceptable.
The Thai tourism industry has taken great pains to stress that the
political activities in a small area of Bangkok has little effect on the
day to day lives of ordinary Thai’s and tourists are still safe to
travel freely in Thailand.
All of the above coupled with the global economic meltdown and plunging
stock markets provides what one travel publication called ‘the
perfect storm’ for Thailand’s hospitality sector. Occupancy at the
Chaophya Park Hotel in September 08 was 56%, LY 73% and October 08 will
close with 55%, LY this figure was 80%. Revenue in Sept and Oct will be
behind LY by 11% and 18% off from the budget.
The forecast for Nov 08 room occupancy is 60% with LY 81%, although
functions and weddings will be strong until the end of the year.
Currency exchange rates have also shown a weakening baht against the
dollar with some analysts predicting Bt38 to the dollar next year from
its present Bt34, a further 12% decline. The Yen is very strong and at a
13-year high at the time of writing. Recently the baht against the pound
and the Euro is strong as these currencies weaken globally, the baht
gaining close to 20%.
However with exports and tourism receipts set to fall, the baht is also
likely to follow.
During 12-19 November 2008, there will be 7 days of mourning and the
final Buddhist preparations that will lead to the Royal cremation of the
late Princess Galyani, the King’s sister. People have been asked to show
respect and to wear black and white. All parties and functions have been
cancelled or postponed to avoid a period when the whole country will
mourn her passing.
The outcome for the next 4 months, taking us into 2009, is looking
‘soft’. I believe however that the decline in tourism receipts will slow
as we move into our traditional high season. From mid January onwards it
will be a testing time and may well set the stage for much of 2009.
I am cautiously optimistic that despite the growing economic turmoil,
people will still travel; they will continue to visit our restaurants
and they will continue to have meetings and celebrations. The change, I
believe, will happen with a growing dependence on the domestic traveller
and local MICE market. It will be a difficult year for Thailand’s
traditional long haul markets and many will be reflecting this in their
company’s marketing plans for 2009.
Note: Andrew J Wood is the General Manager, Chaophya Park
Hotel & Resorts, President-Skål Int’l Bangkok, Skål Int’l
Councillor-Thailand and Skål Asian Area-Director of Development.
Thai trade extends
low season deals
Sirima Eamtako (TTG)
Political stability will be key for Thailand to restore
traveller confidence as incoming bookings continue to plummet amid
mounting political tensions. But for now the Thai trade is extending low
season deals well into the high season to stimulate new bookings for the
next three to six months.
Amari Hotels and Resorts sales and marketing vice-president, Duncan
Webb, said the Thai group offered low season specials at most of its
properties such as one night free for every two or three nights booked,
room upgrades and spa discounts until mid-April 2009. He said there were
going to be a lot of offers and “we need to be out there”.
Thai beach resort destinations are reported to be the hardest hit.
Phuket, in particular, which last high season enjoyed healthy
occupancies to being overbooked, is now seeing hotels rushing to extend
low season specials to drive business. Dusit International has launched
a five-nights- plus-two-free-nights offer for wholesalers at its resorts
from November to March 2009, but bookings must be confirmed before
November 30. This follows Dusit’s two-nights-plus-one offer for October.
Dusit global sales director, Simon Burgess, said there was a need to
remain competitive by giving the market a little push, “but at the same
time keeping the offer at a tactical level rather than just dropping
rates”.
Jetstar postpones Bangkok, Siem Reap services
Vietnam’s low-cost carrier (LCC), Jetstar Pacific, has postponed the launch of
its international flights to Thailand and Cambodia from October 31 to December
19.
The flights include a daily Ho Chi Minh City-Bangkok service and a daily Ho Chi
Minh City-Siem Reap service.
Chief commercial officer, Nguyen Thi Thuy Binh, said in a press statement: “The
airline regrets the seven-week postponement, but Jetstar Pacific remains
committed to commencing the new daily services to the popular international
tourist destinations by year-end.”
The LCC is promoting the routes with its everyday low fares, starting from US$12
for the Ho Chi Minh City-Bangkok service and US$40 for Ho Chi Minh City-Siem
Reap service, excluding surcharges, fees and taxes. (TTG)
TUI Nordic to launch summer flights to Thailand
TUI Nordic plans to launch charter flights from Scandinavia to Thailand in the
summer months for the first time between April and October next year.
TUI Nordic CEO and managing director, Christian Clemens, said the flights, to be
operated by TUI Fly using a 282-seat Boeing 767 aircraft, would leave Stockholm
every week, Oslo and Copenhagen every two weeks, and Helsinki every other week.
Destinations for the flights in Thailand will include Bangkok, Phuket, Krabi and
Surat Thani (Koh Samui). However, at press time, specific routes are unclear.
Clemens said the average package rate for summer holidays would be priced at
about 25 per cent lower than the winter holiday packages.
TUI Nordic expects the summer charter flights to attract around 11,000 to 16,000
trips by Scandinavian tourists. Meanwhile, the company expects to send a total
of 140,000 tourists into the kingdom next year. (TTG)
SIA trims fuel surcharges
Singapore Airlines will be lowering its fuel surcharges for the second time
since September, in line with the recent fall in jet fuel.
The new surcharges will apply from November 7 for travellers in business and
economy classes, across all routes.
The surcharge levels will factor in the length of journey as well as class of
travel. For instance, between Singapore and South-east Asia, the new surcharge
for first, business and economy classes will be US$36, US$32 and US$28
respectively. (TTG)
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