Wary hoteliers crunch the numbers

Proudly contributed by Suchat Sritama

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Tourists enjoy activities at Patong Beach, Phuket. 

International tourists keep coming in their droves, but an oversupply of rooms could squeeze profits.

The hotel business in Thailand is constantly evolving, and hoteliers have mapped out strategies to cash in on the growing tourism industry.

Thai tourism is on track for another record-breaking year, with more than 35 million international arrivals expected in 2017 and 35 million forecast for 2018.

But the Thai Hotels Association (THA) warned the hotel sector in major destinations like Bangkok, Phuket, Pattaya and Chiang Mai is oversupplied, while growth in average room rates nationwide has slowed compared with a decade ago. As such, not every player can benefit from booming tourism.

According to US-based STR Global and Thai consultancy C9 Hotelworks, high demand is boosting confidence in Thailand’s hotel sector, with 100 new hotels and 21,600 rooms in the development pipeline — many of which will be in Bangkok.

But challenges lie ahead, especially for transport infrastructure to cope with the tourist influx. Hoteliers face strong competition, and average daily rate (ADR), a measure of average realised room rentals per day, remains low.

“Thailand’s tourism industry continues to ride the crest of a wave, with record-breaking numbers of global visitors clamouring to experience the country’s many attractions,” said Bill Barnett, managing director of C9 Hotelworks. “As the country’s capital and major international gateway, Bangkok is fast becoming one of the world’s great megacities.”

A series of multi-billion-baht developments, including transport links, megamalls, attractions, hotels and residential projects, are transforming the cityscape, Mr Barnett said, creating both opportunities and threats for the city.

Read full article at Bangkok Post: https://www.bangkokpost.com/business/news/1389514/wary-hoteliers-crunch-the-numbers

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