Thailand’s festive spirit is reviving but hoteliers remain on edge

They are relieved the pandemic is over, but restless about other challenges: shifting patterns in domestic tourism, insufficient flights, the PM2.5 crisis, higher power costs, and labour shortages.

Travel fever is returning, but hotel owners – especially those outside the luxury segment – are still breaking out in cold sweats.

The numbers being touted about the recovery of tourism hide the reality of an industry still struggling to regain its footing, executives say.

Songkran will see between 17 million and 20 million tourists this year, the Tourism Authority of Thailand estimates, while the Thai Chamber of Commerce projects that about 125 billion baht will be spent nationwide during the festival.

Shifting trends
However, hotel booking trends indicate that both tourists and their money will be distributed less evenly than before.

Marisa Sukosol Nunbhakdi, president of the Thai Hotel Association, said resort areas close to Bangkok – primarily Pattaya and Hua Hin – have high occupancy rates, but elsewhere empty rooms abound.

Domestic tourists are sticking close to home to cut expenses, and many are choosing one-day getaways to avoid paying for a hotel room, she said.

Suksit Suvanditkul, CEO of Ramada Phuket Deevana and a representative of the southern chapter of the association, agrees.

Foreign tourists have returned to Phuket, but Thais are travelling closer to home, Suksit said.

Domestic tourists visit the island gem from areas nearby for day trips, he said.

The recovery in tourism is strongest at the luxury level, according to the hotel association’s latest survey. Five-star hotels are seeing a quick return of guests, including during Songkran, but those with fewer stars continue to dream of pre-pandemic levels, the survey found.

Bad air
The PM2.5 crisis is wreaking havoc on the tourism industry in the North.

Songkran is usually peak tourism season in Chiang Mai, Chiang Rai, Mae Hong Son, and Nan, but this year is seeing less than expected demand and a surge in cancellations due, hotel executives say, the dangerous levels of PM 2.5 in the region.

Daily alerts about toxic air in the North are having their expected results on both domestic and international tourists.

Bookings at hotels in the North have to be evaluated on a daily basis, Phunut Thanalaopanich, president of the northern chapter of the Thai Hotel Association, told The Nation earlier this week.

Reservations were excellent until the PM 2.5 crisis, but now many guests are cancelling reservations or reduced the length of their stay, he said.

He’s hoping air quality will improve enough by Songkran that an influx of tourists can occur.

Hotel owners in the North are doing what they can – some are giving guests masks as well as lists of times when it is okay to go outdoors.

"We will do everything we can to keep them [tourists] safe while they are here. But we understand if they do not show up," Phunut said, adding: "Everyone wants to spend their vacation in a beautiful place, not a troublesome one."

Yuthasak Supasorn, governor of the Thailand Authority of Thailand, said the kingdom has many safe and stunning locations where tourists can have once-in-a-lifetime experiences.

However, poor air quality remains a concern.

He pointed out that the government is now urgently working with neighbouring countries to find a long-term plan to end the seasonal PM 2.5 pollution, which is caused to a large extent by farmers burning their fields.

All emergency plans – daily air-quality monitoring and alerts, and spraying water into the air to cleanse it of dust, for example – have already been implemented, Yuthasak said.

 

Still hazy
The worst of the PM2.5 season is likely over – most farming fields have already been burnt – but the outlook for the Thai hotel industry remains hazy, Marisa, president of the hotel association, said.

It's great to hear that more and more tourists are travelling to the country, but because flights remain limited, it will take some time before inbound tourist numbers return to pre-pandemic levels, she said.

Yuthasak says the tourism sector will generate up to 2.4 trillion baht in revenue this year – about 80% of revenues in 2019, the year before the pandemic. About 880 billion will flow from domestic tourism and the rest from foreign arrivals.

However, airlines have yet to reach their pre-pandemic capacity. Domestic flights have returned to 85%, while foreign flights are only at 56% of their pre-pandemic level, Yuthasak said.

Large hotels will get the lion’s share of tourists, but the smaller one will have to wait a bit longer, Marisa said, adding a question: How long can they hang on?

The cost of operating a business keeps rising, particularly the price of electricity, which accounts for up to one-fifth of operational costs, she said.

Hotels also face higher staff wages because there is competition to attract a dwindling supply of workers.

Suksit, the CEO of Ramada Phuket Deevana, said the need for workers is more acute at the operational level, not the management level.

Staff account for about 30% of the total cost of running a hotel, he said.

Both he and Marisa say part-time workers might be a solution. Still, they both said government assistance will be required for many hotels to remain in business.

The Thai Hotel Association is working with vocational schools to place students as trainees in hotels, Marisa said.

Still, the government needs to make it easier for migrants to work in Thailand, she said.

She also wants the government to make it easier for hotel owners to participate in government schemes to help business. Tax cuts, low-interest loans, and subsidies, are also required, she said.

Business owners are eager to work with the government to find the best way forward, Marisa said.

Still, she’s hopeful Songkran will be a celebration for both tourists and those who serve them.