Slowdown, condos hit Hua Hin's hotels
The overall tourism industry in Hua Hin is slowing down but boutique hotels, which attract European travellers, are doing better than the market.
The Tourism Authority of Thailand's Intelligence Centre reported that the average hotel occupancy rate in Prachuap Khiri Khan, mainly contributed by Hua Hin, was 55-65% in the first four months of this year compared with 67-70% in the same period the year before.
The number of trips fell 21% to 1.55 million and tourism revenue dropped 19% to 8.92 billion baht in the first four months. Revenue from international tourists declined 13% to 3.39 billion baht while revenue from domestic travel went down 22% to 5.57 billion baht.
Supawan Tanomkieatipume, president of the Thai Hotels Association (THA), said Hua Hin is a popular destination among European travellers because of its quiet beaches and generally safe image.
But some Scandinavian travellers have shifted to Rayong and Phuket due to convenient travel.
According to C9HotelWorks, 691 rooms will be added by 2018 with the building of new hotels. The sharp rise in condominium projects is also biting into the hotel sector.
The hotel market in Hua Hin is nearly in oversupply like other destinations such as Bangkok, Pattaya and Phuket. Hotels also have to compete with condominiums which offer cheaper rates and larger room space.
Competition in Hua Hin is getting more intense and the economic downturn both in Thailand and globally has dragged down the overall tourism industry in the resort town.
However, boutique hotels such as Cape Nidhra Hotel, operated by Cape & Kantary Hotels Group are still faring well.
The THA said the average hotel occupancy rate in Hua Hin was 60-70% in the first quarter.
But Cape Nidhra's occupancy rate was higher than 90% despite relatively high room rates -- 9,500-18,000 baht per night in the high season and 8,500 baht in the low season.
In Hua Hin, there are 13 boutique hotels with 40-118 rooms, each managed by Thais. The past year has seen the advent of big hotels from international chains such as the InterContinental Hua Hin and Marriott Hua Hin. As a result, competition in the higher-end market has become tougher.
Phum Nawanukroh, an executive of Cape & Kantary Hotels Group, said more new hotels are appearing in Hua Hin, creating serious competition, but Cape Nidhra is successful because of its sea-view pool villas and different marketing campaigns.
The hotel targets European visitors. Germans represent more than 80% of its guests. They spend more than other guests and stay longer, 5.5 days compared with the one to two nights stay on weekends by Thai travellers.