Agents and hoteliers are rushing to switch back to
quoting in baht due to its stronger position against the US dollar and as
Thailand drops some of its value-for-money luster.
The baht’s sudden surge against the dollar over the
past six months caught agencies and hotels – which switched to quoting in
dollars after the 1997 financial crisis – off guard. Agents and hoteliers
are now desperately trying to revert back to baht so that overseas operators
are stuck with the risk.
Destination Asia CEO and group managing director, James
Reed, said: "Any company that has quoted a high percentage of services
in US dollars would have been exposed over the last six months as the baht
How much business Thailand has lost as a result of the
strengthening baht is uncertain, but according to Association of Thai Travel
Agents figures, visitor arrivals in the first two months of the year were
down 11 per cent on the year. The fall has largely been attributed to the
current political uncertainty gripping the country, but members of the trade
polled by TTG Asia said they believed the stronger baht (now hovering around
35 to the dollar) had impacted on arrivals as well.
Asian Trails managing director, Roger Haumueller, said
the company had been stung by the baht’s appreciation. He said: "We’re
trying to convince the ones who currently pay in US dollars to change to
Thai baht whenever possible. It’s very uncertain. We have to do quotations
for the next year-and-a-half for incentives. So where will the US dollar be
in October 2008?"
Asian Trails released its one-year rates last October and
had already revised the rates twice as a result of the stronger baht, he
Mr Haumueller said: "We have had to adjust rates for
clients for quotations done in US dollars and they were not happy. If there
is a fluctuation of 10 per cent, we have to change it. There is no way we
can absorb it."
Italian operators, who had based brochure rates on Asian
Trails’ dollar rates, were causing the company the most grief, he said.
Turismo Asia managing director and CEO, Nino
Jotikasthira, said he was trying to persuade clients to pay in baht, but
admitted many were reluctant to do so.
He said: "For some tour operators in some countries,
it’s quite difficult to buy baht – it’s easier to buy dollars. We
shall see where we will compromise."
Marriott Hotels & Resorts marketing director
Thailand, Meg Evans, said Marriott began quoting entirely in baht in
December. "Every five-star hotel in Bangkok, with the exception of the
InterContinental, is quoting in baht," she said.
Ms Evans said the Marriott had not had to amend contracts
as a result of the currency switch because the contracting process was being
carried out when the company converted to baht.
Starwood Hotels Thailand, Vietnam and Cambodia vice-president, Wayne
Buckingham, said existing contracts quoted in dollars would remain the same,
but the company was pushing for all new contracts to be quoted in baht. He
said: "We have sent instructions out for everyone to quote in baht
unless a customer specifically asks to quote in US dollars. In those cases,
we’ll consider utilizing a clause that protects us from any major movement
in the currency." TTG