40% of hotels struggling to achieve pre-Covid revenues

Despite the rapid recovery of the tourism industry, around 40% of hotel operators nationwide are still unable to generate the same level of revenue as before the Covid-19 pandemic, the Thai Hotels Association (THA) said on Thursday.

The THA reported that a survey conducted in collaboration with the Bank of Thailand in August, showed that 60% of 106 hotel operators nationwide had already achieved pre-Covid earnings. Most of the respondents in this group are four-star hotels or higher located in the Central, Eastern, and Southern regions.

However, some 40% of respondents, most of them 3-star or lower, said they have been unable to achieve the pre-Covid revenue milestone.

“Hotels struggling to meet the pre-Covid revenue target are either located in highly competitive areas or targeting customer groups that are sensitive to price increases,” THA president Thienprasit Chaiyapatranun said.

He said the latter factor has forced operators to keep their room prices unchanged despite operational costs having increased.

Establishments with 3-stars and lower often could not afford to upgrade their rooms and services to attract visitors, or run extensive marketing campaigns to help boost sales, he added.

The THA estimated that more operators will achieve the pre-Covid revenue milestone in the second quarter of 2025, while about 7% of hotels, most of which are 3-star and lower, would never earn what they used to again.

The survey also found that hotel operators estimated the occupation rate in September at 50%, decreasing from 62% in August due to unfavourable weather conditions and the low season.

In addition, 40% of hotel operators reported that ongoing labour shortages were now affecting service quality. Most of the hotels that are short-staffed are located in the Central region, the survey found.

In a bid to maintain the upward trend of the tourism industry, Thienprasit urged the government to consider extending the visa waiver policy to foreign visitors in targeted markets, as well as postpone the “landing tax” on foreign arrivals for at least two years.

The highly controversial tourist tax called “Kha Yeap Pan Din” (fee for stepping on Thai soil), also known as a “landing fee”, was approved in principle by the Cabinet in February last year. It aims to levy 300 baht ($8.47) on foreigners arriving by air and 150 baht ($4.37) on those arriving by land or sea.

The money earned would be used to buy insurance for foreigners and the remainder added to the Tourism Development Fund.