The ongoing global pandemic, together with the current outbreak in Thailand and continued uncertainty is causing many hotels throughout Thailand to become more pessimistic about their future.
Nearly half of all hotels in Thailand could close for good in the next three months according to a survey for The Nation Thailand which says that 47% only have enough cash for the next three months at the longest.
The current outbreak in Thailand has raised increasing doubts over the plans to reopen areas without the need for quarantine. The governor of Phuket has already raised concerns that if cases continue at the current level then the provinces planned Sandbox launch on on 1st July will have to be delayed.
The survey spoke to 188 hotels nationwide from small family-owned business’ to large, well-known hotels and resorts. 30 of the hotels are currently official Alternative State Quarantine facilities (ASQ) used by travellers for their compulsory quarantine.
Although just 13% of the hotels were temporarily completely closed, others were struggling due to the restrictions around travel due to the current Covid-19 outbreak. Most of the hotels closed were in the south of Thailand and focused on international tourism.
The report stated that most of the hotels surveyed were not planning to reopen until the fourth quarter when it is hoped increasing numbers of international tourists will head to the country as areas relax quarantine rules under the Sandbox programme.
Occupancy rates for open hotels who were not ASQ facilities averaged 18%, much lower than would be expected at the end of April.
Occupancy in the north was as low as 4.1% although southern hotels fared better with rates as high as 23.2%, still very low. There are predictions that average occupancy could fall to just 9% in May if the outbreak continues.
Average occupancy in 2020 was just 29.5% and hotel revenues fell by 60-70% on 2019.
One of the main issues for the industry is the continued uncertainty over restrictions.
Thailand has been more forthcoming than many countries in setting out its plans to remove or reduce restrictions through the Sandbox programme.
The Sandbox will see provinces allowing vaccinated travellers into their area without the need for quarantine.
Phuket province is due to be the first area from 1st October and will allow travellers to travel throughout the province. Other areas are due to join the Sandbox from October but many will only allow travellers into specified areas.
To survive until then, many hotels are predicted to offer discounts and non-price promotions to try and attract what customers that there are. There are very few foreign tourists able to access Thailand at the moment and domestic travel has been stopped by the current outbreak.
Many hotels have looked to reduce staffing costs to survive until now. Staff numbers have been reduced and working hours and salaries have been cut. Most hotels have little extra cost-saving measures available to them.
The increased competition for customers could see many hotels seeing their income and margins squeezed further.
Domestic travel will be the key for many hotels in their hope for survival with just 1.5 to 3 million international visitors expected, if the Sandbox schedule can be achieved.
Source: Travel Daily Media and Bangkok Post
Advertising and affiliate links help to support this site. We only partner with organisations who we believe provide a good service or product. Thank you.