Thai government mulls dual-tariff structure for hotel operators

The Thai government recently floated plans to introduce a split pricing structure for the country’s hotels.

If enacted, this scheme means that foreign travellers to Thailand will see hotel rates surge back to pre-Covid 19 levels, while domestic tourists will continue to receive discounted fees introduced during the height of the pandemic.

Foreign travellers to Thailand will see hotel rates surge back to pre-pandemic levels, while domestic tourists continue to receive discounted fees

Government spokeswoman, Traisuree Taisaranakul, outlined the administration’s reasons for introducing dual pricing.

“This is to maintain our standards of rates and services for foreign tourists, which affects the perception of the country’s tourism brand. Rates that have been reduced during Covid-19 will be maintained for Thais to sustain the momentum of domestic tourism,” she said.

Although Thailand’s tourism and sports minister Phiphat Ratchakitprakarn’s indicated that the directive is not compulsory and the government merely wants to encourage hospitality firms to shift room rates based on the market, the industry is apprehensive.

Marisa Sukosol Nunbhakdi, president of Thai Hotels Association, pointed out that the move was not pragmatic, stating that “hotels in each tier also use different strategies to set prices”, and “if demand increases to support hotel occupancy, then rates will automatically increase”.

“Every hotelier would like to operate with higher and fair rates to gain a larger margin, but it is difficult to do so because of heated competition and oversupply. Operators have to use pricing strategies to gain cash flow,” added Marisa.

Following the removal of the Thailand Pass on July 1, many hotels in Thailand have reduced their room rates to help lure foreign tourists back to the country and shore up their bottom line. Yet despite these offers, occupancy remains low, and is not expected to return to peak levels until 4Q2022 at the soonest.

Sponsored Post