TRAVEL & TOURISM
HEADLINES [click on headline to view story]:

Thailand’s Hotels - mid year Blues?

Thailand proposed ASEAN to support Maejo University for new tourism curriculum

Thailand’s Hotels - mid year Blues?

Andrew J Wood General Manager
Chaophya Park Hotels & Resorts, Thailand

With Thai tourism’s “piece de resistance of the 2006 Grand Celebration promotion behind them, the royal visitors returned home and the royal barges back in dry dock, hotel executive’s report they are facing a mixed future half way through the year.

Once again it would appear that the four star market is fairing better at filling rooms in the nations capital than the top end five star products, but they are experiencing lower food and beverage revenues than last year. The five star hotel’s lower occupancies are however balanced by higher yields; known in the industry as RevPar (revenues per available room). This might suggest price resistance in the luxury end, or over supply?
Industry observers had long predicted that 2006 would be a better vintage than 2005, but few realized the extent of the quadruple combination of the World Cup; rising oil prices; a strong baht and the continuing political stalemate. Most believe that the southern unrest is not considered an international problem, receiving only a cursory glance by tourism influencers. The far south has received little in the way of long haul international tourists historically and is therefore seen to have minimum affect on tourist arrivals.
The five star market is describing July as “sluggish”, with occupancies under-performing in comparison to last year by 15-20%, although many of the 5-star hotels have increased rates over last year.
Observers also commented that top hotels, like the Peninsula and The Oriental, are once again offering summer packages so bargains are to be found if you know where to look. Peninsula have also offered special incentives such as 3 for 2 offers quietly in the market place, whilst a room in the Oriental can be had for just over $239 excluding tax and service but including breakfast, during this year’s “green” (low) season.
Hotels in the Sukhumvit corridor and CBD (central business district) have been aggressively pricing their wholesale rates for next season, with 30-40% increases and removing inclusive breakfast. The Grand Hyatt and the Sheraton Grande were identified as early initiators of this new pricing structure, with many others on the central Sukhumvit Skytrain route and side streets, following suit. The results so far have been that buyers have accepted these rate increases for next season; the real test will be to see if they use them.
Couple this with restricting access to local (cheaper) rates, being offered by Bangkok based agents, to the international market via the internet. These are often marked up in price and offered to third parties. Many hotels have in the past tried to police this practice with restrictive contracts, but most have been ignored and thus proven to be unworkable. The result is that the more confident hotels (usually preferred, first choice, branded hotels) have stopped working with local agent’s altogether, or offered only regular corporate rates, a practice normally aimed at small to medium volume producers.
The dilemma faced by the industry, is that whilst these centrally located hotels continue to push up the yield, the divide between 4 and 5 star hotels is widening. Good news for buyers if they are prepared to locate 10 minutes further away from the CBD, and by dropping one star only in quality, they can usually secure a nightly rate three to four times lower than the CBD hotel’s.
Results for the first quarter suggests that the supply is still surplus to demand, particular in Thailand’s north and central regions. The Thai Hotel Association (THA), in its recent report also said occupancies in Chiang Mai were down by 50% during the Songkran holidays and from 76% last year to 68% this year in the central region. Strong recovery in the south however has seen occupancies double from the 25% lows of last year.
But is all well for the future in an industry well used to the ups and downs of demand? Commenting Mr. Ross Cunningham, Director of Sales and Marketing of the Conrad Hotel said, “As long as there is no future civil unrest, we should have a good second half in 2006”.
Many agree that 2006 is Thailand’s “Grand” Year and we should achieve our target of 14.4 million foreign tourist arrivals. But there are others that believe it will be difficult. THA President Chanin Donavanik is less optimistic about the industry this year, he said, “Thailand’s tourism industry might be losing international tourists to other destinations. When compared to other countries in the region, we lack new tourism magnets.”
Hong Kong’s impressive Disney World and Singapore’s launch into Resort Casinos are cited as Thailand’s missed opportunity by industry commentators.
So is Thailand’s hotel industry set for a major correction between the four and five star hotels on rates? I still believe not. Location is the key, along with competition in the immediate vicinity and within the competitor set. The River hotels and five star hotels, with their control of the luxury leisure, corporate and MICE market will do what they do and the four star properties will be mainly driven by what their neighbors are doing.


Thailand proposed ASEAN to support Maejo University for new tourism curriculum

Chiangmai Mail Reporter
According to the tourism staff conference and ASEAN tourism organizations conference at Sheraton Hotel on July 6-7, ASEAN proposes the personnel exchange to be trained at Asia Pacific Training Institute, supported by Australia which sends ASEAN personnel to be trained for tourism, hotel management, ecotourism, and getting on board. Also, they emphasize on language improvement to personnel. Initially, Thailand has discussed with Korea to provide Korean personnel to teach Korean language to Thai people. Also, Thailand has proposed ASEAN to use Phuket being the place for ship construction and reparation. Moreover, Thailand proposes ASEAN to support Maejo University, Silpakorn University, and Phuket University having role to do research and tourism training program, especially at Maejo University to add tourism curriculum that Maejo University has potential. Also, it is to give opportunity for ASEAN countries to study and to be trained for tourism courses.