Hotels mull closing down for low season

Hotels mull closing down for low season

New Covid-19 wave has reduced incomes

People browse deals at a Bangkok travel fair. A THA survey in March showed revenue for most properties had still not recovered. (Photo by Somchai Poomlard)
People browse deals at a Bangkok travel fair. A THA survey in March showed revenue for most properties had still not recovered. (Photo by Somchai Poomlard)

The resurgence of Covid-19 is forcing hoteliers to consider temporarily closing down given the low income and poor demand from tourists.

Marisa Sukosol Nunbhakdi, the president of the Thai Hotels Association (THA), said non-chain hotels without adequate cash flow are choosing to cease operations from April to October or until tourism demand resumes instead of waiting out another slump.

Mrs Marisa said the occupancy rate in April was expected to drop to single digits, similar to the second wave in January. The last two weeks of April will prove critical in hotels' decision to close for the low season, she said.

Only 400,000 hotel workers remain in the industry, a remarkably low level from a few years ago, said Mrs Marisa.

The scale of impact, including the unemployment rate, will depend on how fast the government can contain the virus.

A confidence survey by THA of 128 hotels in March showed that revenue for most properties, especially in the south, had still not recovered. At least 50% of hotel chains have been unable to attain even 10% of revenue seen before the pandemic began.

Hotels have continued to implement a staff management policy that includes a leave-without-pay option (77%), compelling annual leave (76%), salary cut (71%), alternative working schedule (69%), working hours reduction (56%), and/or use of section 75 of the Labour Protection Act to pay 75% of the employee's salary (20%).

Meanwhile, up to 40% of hotels have decided to lay off staff. Only 6%, mostly five-star hotels in Phangnga and Surat Thani, hired more staff thanks to improving occupancy.

The survey also found that hotels' liquidity in March fell by 20% from February and that most had enough cash flow to operate no longer than three months.

She said financial aid is the top priority as the new wave has interrupted the pace of recovery. The state should allocate a monthly salary co-payment scheme or debt holiday and enact stimulus plans to boost tourism sentiment.

In addition, vaccinations are key to reviving tourism which can help the economy and boost tourist confidence.

"The government has to speed up vaccines for people employed in tourism, especially hotel staff, and those working in hospitals serving non-critical or asymptomatic patients, alternative state and state quarantines."



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