Most hotels still struggling despite full reopening
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Most hotels still struggling despite full reopening

Tourists at a hotel restaurant in Phuket. (Photo: AFP)
Tourists at a hotel restaurant in Phuket. (Photo: AFP)

Despite fully reopening in July, the employment rate in the hotel sector stands at just 71% of the pre-pandemic level with 68% of hotels hit by a labour shortage, according to the Thai Hotels Association (THA).

Marisa Sukosol Nunbhakdi, THA president, said 67% of hotels had to keep their wage rates static as revenue in the past month had not significantly picked up, even though the number of foreign arrivals last month topped 1 million for the first time in more than two years.

The Hotel Business Operator Sentiment Index, surveying 118 hotels in July, found that 67% of hotels had revenue at 50% or less of the pre-pandemic levels.

The hotel segment that outperformed others in the industry, gaining revenue of more than 50%, were 4- and 5-star hotels at around 31%.

Meanwhile, around 70% said they had to slash room prices to a rate lower than that of 2019 because competition for a limited number of customers was still intense. Only 14% were able to increase their room rates, while 16% were able to maintain the same rate.

The average occupancy for July was 45%, increasing from 38% in June, mainly driven by cancellation of the Thailand Pass and the extension of the hotel subsidy for domestic travellers. However, it was still lower than the same period in 2019, when it stood at 65%.

Accommodation in the South saw the highest occupancy rate in July at 49%, followed by the Northeast (48.7%) and the East (46.9%).

Hotel operators estimate that the average occupancy this month will drop slightly to 42% because of seasonality.

"More hotels reported a growth in foreign guests at more than 50% of total bookings, but their expenditure decreased in all segments of hotels. Hotels could hardly increase their room rates due to weak spending power," said Mrs Marisa.

The index found that 5-star hotels saw 41% of their guests spending less than pre-pandemic levels, while the rates at 4-star and 3-star properties stood at 58% and 68%, respectively.

Mrs Marisa said hotels were worried about a compulsory wage rate hike, particularly small and medium-sized hotels which had almost 50% of their total workforce that would be affected by a rate hike, as their income was not strong enough to cover higher operational costs.

Speaking at a seminar held by the Economics Tourism and Sports Division yesterday, Mrs Marisa said more hotels would opt for international chains as they could not compete with hotels under international brands.

"More local hotel owners who are the second generation of the family decided to let international chains manage their properties as they found the business situation at the moment is too difficult and troublesome to handle by themselves," said Mrs Marisa.

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