Price cuts will not help revive Thailand’s tourism industry and will only create more post-crisis challenges for tourism organisations that have already suffered from low occupancy and demand due to the political crisis, the Thailand chapter of the Pacific Asia Travel Association said yesterday.
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Pata slams Thai price-cutting trend
In a statement, Pata said it regretted the decision by Royal Orchid Holidays (ROH), a division of Thai Airways International, to come up with a “self-defeating tourism recovery strategy” for Thailand – price reductions of 50 per cent.
In addition, ROH expects hotels “to sweeten the pot further” with free dinners, cash vouchers and room upgrades, it said.
“Thailand already provides services at a much lower rate than most Asian countries. It is arguably the best-value destination in Asia now – without price-cutting. It is easy to drop room rates by 50 per cent. If we do, it may take up to four years to achieve the same average room rate as in 2009/10. That would be a big step backwards,” it said in the statement.
A few weeks ago, Pata expressed the fear that, once the latest crisis ended, some international wholesalers would use their position of power to pressure hotels and tour operators to lower contract rates by an unreasonable amount.
Thailand performs well compared to other countries in the region on many aspects of government regulations and regulatory procedures that facilitate business. According to the latest annual World Bank’s Doing Business report, in 2008 Thailand ranks 13th among over 180 countries and 4th in East Asia in the ease of doing business. The ease of doing business is measured by quantitative indicators of regulatory requirements and procedures in ten areas in the life cycle of typical small and medium enterprises (SMEs) in the largest city in a country. They include, for example, the number days, steps, and cost needed to obtain business licenses, registering property, clear customs, pay taxes, and close a business. It only takes 2 steps and 2 days to register property in Thailand, on of the fastest in the world. Progress over the recent years has been particularly on the improvements in the customs process after the introduction of the internet-based customs clearance system, which has reduced the number of required documents and time taken to clear customs for exports.