Hotel operators consider closing amid weak demand

Hotel operators consider closing amid weak demand

A welcome sign greets tourists arriving at Koh Samui under Samui Plus travel scheme. As of Monday, the island has received 621 tourists from the pilot programme.
A welcome sign greets tourists arriving at Koh Samui under Samui Plus travel scheme. As of Monday, the island has received 621 tourists from the pilot programme.

Amid tepid tourist demand, 52% of hotel operators are considering closing temporarily, while 9% want to shut down permanently if the Covid-19 pandemic lasts longer than expected.

A joint survey by the Bank of Thailand and Thai Hotels Association (THA) found that 62% of hotel operators planned to reduce labour costs in order to deal with the financial effects of the pandemic.

Meanwhile, 61% said they planned to cut other expenses.

Between Aug 13-28 the central bank and THA conducted a poll of 234 respondents, of which 14 were alternative state quarantines and five were hospitels.

A total of 38% of Phuket Sandbox respondents said foreign tourist arrivals were lower than their expectations, but 35% said the numbers were as expected.

On average, the occupancy rate was steady at 15%.

However, 52% of hotel respondents in Surat Thani, the host of the Samui Plus model, said they were receiving fewer travellers than expected, with the average occupancy rate at 4%.

Most hotel operators were experiencing low incomes, with 58% of hotels reporting income of less than 10% of pre-Covid levels, while 17% earned 11-30% of their pre-outbreak income.

Marisa Sukosol Nunbhakdi, president of THA, said hotels in August had an occupancy rate of 10.6% nationwide, which was only slightly higher than the previous month's 9.6%.

A total of 65% of hotel operators said they had only enough liquidity to survive for less than three months.

Mrs Marisa said that while 17% of them remained closed, the number of active hotels increased from 40.1% in July to 48.4% in August, mainly driven by hotels in Bangkok, which turned to the long-stay market, and in Phuket, which has its quarantine-free programme for inoculated tourists.

Lower confidence on Koh Samui recently prompted tourism operators to call for a relaxation of the Samui Plus model, which still requires inbound tourists to stay at quarantine facilities for three days after arrival.

Mrs Marisa said the quarantine-free approach should be applied to other destinations to stimulate more demand, which could help save hotels during the tough financial crisis.

As of Sept 6, Samui had received only 621 tourists via the pilot programme, while the number of tourists that completed the programme in Phuket and then travelled to Samui stood at over 400.

After starting the programme on July 15, tourists spent 7,136 room nights in Samui Plus destinations, while another 8,335 room nights have been reserved in advance.

The numbers are still a far cry from Phuket, which saw 176,128 and 125,434 room nights booked in August and September, respectively.

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