Bleak outlook for Chiang Mai hotels

Bleak outlook for Chiang Mai hotels

High season occupancy rate weak

Residents at the Imm Hotel in Chiang Mai have breakfast. Chiang Mai hotels saw occupancy rates drop to 70% this November. Karnjana Karnjanatawe
Residents at the Imm Hotel in Chiang Mai have breakfast. Chiang Mai hotels saw occupancy rates drop to 70% this November. Karnjana Karnjanatawe

Though it is the high season, hoteliers in Chiang Mai report sluggish business with no signs of a recovery this year.

"The first two months of high season just passed, but the situation seems bleaker than it should be," said La-Iad Bungsrithong, president of the Thai Hotels Association's northern chapter.

The challenges for local operators are an oversupply of rooms in Chiang Mai, which has 60,000 rooms, of which 10,000 are on a sharing economy platform, while the number of visitors is not growing.

The Tourism and Sports Ministry reported Chiang Mai welcomed 8.08 million tourists during the first 10 months this year, down slightly by 1.14% year-on-year, with 84.2 billion baht in tourism income, up 1.49%.

She said the occupancy rate in November, a peak month for Chiang Mai, dropped to 70% from 90% last year.

Even during the Loy Krathong holiday, which was on Nov 11, hotel occupancy in the province was fully booked for only one day, down from 2-3 days in the past.

This is part of a trend of shorter stays and fewer tourists, said Mrs La-Iad.

The decline is continuing into December, with the occupancy rate for the month projected at 70-75%, compared with 75-80% last year.

She predicts the overall occupancy rate for hotels in Chiang Mai this year to stay at 60%, down from 75% in the previous year, if there is no improvement.

The last two weeks of this month will be the only chance for operators to be fully booked, but hoteliers remain doubtful as tourists are likely to make reservations for holidays abroad on short notice, she said.

Mrs La-Iad hopes the festive mood and cold weather will help speed up tourist bookings.

She said the baht's appreciation is one factor lowering tourist arrivals. The strong currency has raised prices of air tickets, turning tourists to other countries.

The business outlook next year will depend on the first quarter, which is the high season for hoteliers, said Mrs La-Iad. Moreover, domestic Mice (meetings, incentives, conferences and exhibitions) groups from state agencies are expected to resume travel during the start of next year, benefiting the province.

She is also hopeful an improving economy next year will help prop up the tourism segment.

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