Hotels face grim prospects

Hotels face grim prospects

Siam skytrain station, usually one of Bangkok's busiest mass transit interchanges, has been nearly empty since shopping malls and hotels closed temporarily this week. (Photo by Apichit Jinakul)
Siam skytrain station, usually one of Bangkok's busiest mass transit interchanges, has been nearly empty since shopping malls and hotels closed temporarily this week. (Photo by Apichit Jinakul)

Most hotels in Thailand are likely to close temporarily during the outbreak as the occupancy rate plunges to near zero in at-risk areas, with few lodgings operating at a profit, according to the Thai Hotels Association (THA).

"There is no need to talk about the occupancy rate today, as many hotels in Bangkok and other provinces don't have any guests left," said THA president Supawan Tanomkieatipume. "Some of our members have only 10-20 rooms occupied. More closures are expected, even if they haven't been announced yet."

Some long-stay tourists residing in the South, such as visitors to Phuket, may help hotels boost occupancy rates, but these too will soon decrease as most guests return home before a stricter lockdown is imposed.

Without guests, hotel operators will be hard pressed to stay in business for longer than three months, Ms Supawan said. Many hotels are trying to keep employees, but the burden of wages grows by the day.

Ms Supawan said hotels remain hopeful for a future rebound, but the health crisis is obviously a long-term problem.

"The future of each hotel depends on cash flow," she said. "Selling the properties is impossible because nobody is going to buy hotels at this time."

Suksit Suvunditkul, chief executive of Deevana Hotels and Resorts, said the group and other hoteliers in Phuket have discussed closing hotels because of the shortage of guests.

Mr Suksit, also the vice-president of the THA's southern chapter, said hotel chains with many hotels in a cluster can transfer their remaining guests to one hotel to save on operating costs.

The hotel occupancy rate for the first half of March for hotels in Phuket beach areas stood at 60%, according to bookings. But the actual rate plunged to 5-6% as travel restrictions blocked travellers from entering the country, airlines suspended flights and many countries enforced lockdowns.

During the tourism slowdown, hoteliers have to enforce leave without pay to maintain their businesses.

"If this stagnancy lingers for the next 6-9 months, hotel operators will have to consider layoffs," Mr Suksit said.

He said the pandemic's impact presents a greater challenge for operators because of the accelerating spread of the virus globally, which means the disease will take a much longer time to contain and reviving travel is further delayed.

The Sars epidemic was under control within six months, but he estimated that with this pandemic normal tourism will not be restored until November.

"Even during the tragic 2004 tsunami in Phuket, our hotels still had a 30% occupancy rate," Mr Suksit said.

The two largest hotel operators in Thailand, Minor Hotels and Asset World Corp, have temporarily closed hotels in Bangkok and virus-hit areas to help prevent the disease from spreading.

Centara Group is monitoring the situation closely and considering closure options in all at-risk areas around Thailand, including Bangkok, where the company has three hotels, said Ronnachit Mahattanapreut, senior vice-president for finance and administration at Central Plaza Hotel.

As guest numbers dwindle and some hotel services like outlets, spas, gyms and pools close, the group will take care of the remaining guests by offering them accommodation at another hotel in the same cluster.

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