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Thailand Hotels Industry Outlook expected to be bright for 2018-20

Occupancy rates and revenue for hotels will tend to grow in line with continuing growth momentum of the markets for both domestic and international tourism

Olivier Languepin

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Occupancy rates and revenue for hotels will tend to grow in line with continuing growth momentum of the markets for both domestic and international tourism, in particular for increases in the number of Chinese tourists coming to Thailand, who currently account for 27% of all international arrivals.

Investment in the hotel sector is also expected to continue in tourist destinations mostly along with investment plan of Thai and international chains, and in regional centers which are developing or which are home to other tourism attractions and that are benefiting from being connected to regional economic development and from building secondary tourist attractions, says “Thailand Hotels Industry Outlook 2018-20” report from Krungsri Research.

At the same time, however, the sector faces the possibility of competition from substitution goods/services and from ever-increasing numbers of hotel rooms, which are helping to raise overall levels of competition.

The state of the hotel sector directly relies on tourism situation. As regards the latter, information from the World Travel & Tourism Council 2017 indicates that tourism contributes around 10% of global GDP, though in the case of Thailand, this rises to over 17% of national GDP, generating THB 2.5 trn for the domestic economy.

The tourism value chain scatters across the various regions of Thailand and extends beyond tourist accommodation business to include a number of other businesses, including those in the food and beverages, and transport business.

Overall, it is estimated that in Thailand 4-5 million people depend on tourism for their livelihood (source: Ministry of Tourism and Sports, 2017).

Tourists are queuing in front of a luxury outlet in Bangkok

Tourists are queuing in front of a luxury outlet in Bangkok

As regards visitors from individual countries, in 2016, China was the most important, accounting for 26.9% of all overseas arrivals (Table 2). Over the past decade, the number of Chinese tourists in Thailand has increased almost 10-fold to the current level of around 9 million arrivals in 2016.

 

in 2016, China was the most important, accounting for 26.9% of all overseas arrivals

As regards visitors from individual countries, in 2016, China was the most important, accounting for 26.9% of all overseas arrivals

Thai hotel business has experienced oversupply situation, reflected by the low level of occupancy rate. During 2000-14, the occupancy rate averaged at 59%1/ (Figure 8). This was caused by both supply and demand factors.

That is, many years of fast-growing tourist arrivals encouraged new investment in hotel and accommodation. In addition, there are additional supply from apartments and condominiums, which offer daily rental rates (although this is illegal, law enforcement in this area is weak).

Meanwhile, the number of tourist arrivals recorded a slow growth and contraction during 2008-11 due to the continuing sluggishness in the world economy and domestic political conflicts.

In 2016, the average occupancy rate rose from the previous year’s 65.1% to 67.8%

In 2016, the average occupancy rate rose from the previous year’s 65.1% to 67.8%

In 2016, the average occupancy rate rose from the previous year’s 65.1% to 67.8% due to the increasing number of Chinese tourists and greater levels of domestic tourism.

The average length of stay rose very slightly, from 6.95 days in 2015 to 7.03 days in 2016 (Figure 11) but overall, because of the greater distance they travel and a strong desire to escape cold weather, European travelers had the longest average length of stay.

Because of the greater distance European travelers had the longest average length of stay

Because of the greater distance European travelers had the longest average length of stay

Occupancy rates in major tourist areas which are reliant on foreign arrivals saw reasonable rates of improvement. The rate in Bangkok rose from 76.3% in 2015 to 78.3% in 2016, Phuket went from 73.4% to 74.1% (thanks to more direct and charter flights) and Chonburi increased to 75.2% from 74.8%. In provincial centers and in secondary tourist destinations, occupancy rates also strengthened, while in border regions, greater connections to neighboring countries also contributed to rising occupancy rates.

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Ministry of Commerce pushes for exports to offset trade war aftermath

The Board of Trade of Thailand’s Chairman has proposed temporary border trading points be upgraded to permanent ones and more centers for the distribution of SME goods be opened

National News Bureau of Thailand

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BANGKOK, 12th August 2019 (NNT) – The Board of Trade of Thailand is working with the Ministry of Commerce to add value to the wide range of Thai goods for export, in reaction to the trade war between the United States and China.

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Fruit farmers coping with oversupply and price slumps

Thai Government vows to help fruit farmers, following the problem of product oversupply and price slumps, the Ministry of Commerce said.

National News Bureau of Thailand

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BANGKOK, August 2019 (NNT) – To help fruit farmers, following the problem of product oversupply and price slumps, the Ministry of Commerce has recently used Section 44, of the interim constitution, to engage government and private agencies in assisting them in terms of marketing to help sell the produce, including mangosteens, Lansium demesticum, rambutans, longans and other seasonal fruit.

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Thailand’s Drought disaster estimated 10bn baht ($326M)

The overall damage is expected to escalate to 37 billion baht should the drought extends to September, as the wet season rice cultivation cycle would be affected; that would lower expected Thai economic growth to 2.9 percent from 3 percent.

National News Bureau of Thailand

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BANGKOK, 3rd August 2019 (NNT) – The latest estimate from the University of Thai Chambers of Commerce (UTCC) shows the drought disaster this year has affected some 1,330 square kilometers of farmland, most of which is rice farms, with initial damage estimated at about 10 billion baht.

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