With a backdrop of hotel occupancy in Bangkok down more than one-third for Q1 2014, more than 400 travel and tourism industry executives attended the third Thailand Tourism Forum last week and most were optimistic that Thailand would show its renowned resilience in shaking off the early-2014 protests that shutdown most of Bangkok.
The Bangkok forum organized by the American Chamber of Thailand and C9 Hotelworks, concluded Thailand’s comeback would be fuelled by exponentially rising demand from China, as well as India, Brazil, Russia and Turkey, set against a big picture of strong regional growth and a global travel industry increasingly dominated by Asia.
The impact of the shutdown on Bangkok had been swift and dramatic, according to keynote speaker Jesper Palmqvist of STR Global as international tourist arrivals to Thailand declined by 4.1% in February (year-on-year) and 9.39% in March. This contrasted with a positive regional trend, which saw Thailand’s neighbors all experience gains of around 2% to 5% in occupancy for the first two months of 2014 – with Singapore, Malaysia, Indonesia and Vietnam all beneficiaries.
History suggested Bangkok’s bounce back from the brink would be equally impressive, Palmqvist said. Bangkok hotel occupancies in January declined 26% in year-on-year performance and worsened to 37% in February as the protests escalated, choking key city intersections and prompting many embassies to issue travel warnings. This had not flowed on to a commensurate drop in room rates, Palmqvist revealed, with a drop in rates of less than 2% across Thailand. Nor had it affected Thailand’s other resort destinations and gateway cities, with a drop of just 2% for the first two months of the year, offset by a 2.7% increase in ADR.
“Thailand’s resilience is legendary,” Palmqvist said. “The big question is how many times it can be relied upon after the latest self-inflicted crisis before Thailand finally loses its bounce.”
JJL Senior Vice President, Investment Sales Asia, Nihat Ercan, offered an even bleaker view of the shaky start to 2014 in Thailand, and particularly in Bangkok, putting the drop in occupancies in the capital as high as 35%. In addition, Dusit International Chief Operating Officer David Shackleton revealed at a pre-forum press briefing that the group’s flagship Dusit Thani hotel had seen occupancy drop, but “never into single figures” during the shutdown. He added that occupancy had now bounced back to the mid-40% range for April and barring more protests, the rate would continue to climb sharply.
Across-the-board belt-tightening, temporary restaurant closures and reassignment of expatriate staff were amongst the tactics Dusit was forced to adopt to ride out the crisis. Shackleton also called for the industry to reach out in a united front to key embassies and diplomats to ensure travel warnings were commensurate with the level of risk to travellers. “In the latest crisis, we had Hong Kong issuing a black warning for Thailand, instantly voiding travel insurance and no doubt resulting in mass cancellations and changes in plan, putting us in the same company as Syria,” he said.
Bill Barnett of hospitality consulting firm C9 Hotelworks said Thailand’s regional hospitality hotspots had benefitted from a sustained build-up of direct airlift over the past five years. “Travellers have the option to bypass Bangkok and their confidence in ‘Brand Thailand’ remains generally positive,” he saidt. “We saw a similar trend demonstrated during the previous crisis in 2011, with primarily resort markets retaining strong international trading.”