Small Thai hotels go quiet amid travel crisis

Bangkok cityscape. Bangkok night view in the business district. at twilight.

The travel and tourism crisis has forced as many as 80 per cent of member hotels to halt operations in 2020, according to the Thai Hotels Association (THA), which has a membership of 930.

However, the true numbers of hotel casualties may be higher, as more than 80 per cent of approximately 54,200 hotels nationwide are non-member properties – most of which are by independent, small-and-medium-sized (SME) operators.

The pandemic and tourism crisis has forced 80 per cent of member hotels to halt operations in 2020, according to the Thai Hotels Association

“These independent and SME hotels are at the highest risk. Some have already closed their doors and others were sold,” said THA president Marisa Sukosol Nunbhakdi.

Several owners of such small outfits told TTG Asia that they were entering 2021 with much anxiety, and expect the challenging environment to remain until early-2022.

Wassana Srikanchana, owner of White Villa Hotel in Hua Hin, said the company has slashed room rates by half to stimulate demand but average occupancy remains at just three to five per cent – “similar to other small hotels in town”.

Hua Hin is declared a red zone due to high numbers of Covid-19 infections. The status has further bruised local travel and tourism businesses, which are already struggling with severely reduced international arrivals.

Wassana said there has been zero business since mid-December 2020, following the second wave of infections.

To minimise loss, Wassana has slashed staff wages and kept only the first floor running to cut utility expenses.

Local independent chain Urban Hospitality Group saw 80 per cent of foreign clientele disappearing with the pandemic, along with 50 per cent of business event bookings, compared to 2019.

Managing director Wutthiphon Taworntawat has chosen to respond with aggressive sales and marketing efforts, dishing out attractive rates for hotel rooms to be used as home offices. This comes on top of reduced wages and work hours for hotel staff, as well as staff relocation to other properties in the chain.

Despite the challenges, Urban Hospitality Group has been among the fortunate few. In 2020, it acquired two hotels in Bangkok to expand its portfolio.

THA has been vocal about Thailand’s ailing hotel industry, calling on the government to provide multi-layered assistance, such as tax incentives to support hotel development or public health renovation, a commitment to hosting government meetings in local hotels, and minimum wages for workers affected by temporary hotel closures.

Without further assistance, THA expects more hotels to exit the market this year.

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