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Dec 12, 2008

Thailand Hotel struggle as occupancy rate plunges 19%

Employees of luxury hotels in Bangkok, Chiang Mai and Phuket have seen a cut in their working days as operators try to reduce operating costs without having to lay off workers in the light of plunging tourist arrivals.

Prakit Chinamourpong, president of Thai Hotels Association (THA), said on Tuesday that luxury hotels in Chiang Mai had reduced employees' working days to five days a week due to fewer customers.

Many hotels in Phuket and Bangkok have also cut working days to four and five days per week.

"Some luxury hotels are running with a single-digit occupancy rate, sharply down from the average 70 per cent rate recorded in the same period last year."

"For the overall hotel industry, the average occupancy rate this month alone has declined 19.1 per cent," he said, adding that the impact of the Bangkok airports' shutdown was greater than the 2004 tsunami.

From January to early this month, the average occupancy rate is 65 per cent, down from 68 per cent over the same period last year.

Prakit said some luxury hotels in Bangkok had also decided to cancel their gala dinner packages already booked for New Year's Eve after customers cancelled reservations.

THA forecast that the hotel sector would slow until June 2009,with small and medium sized hotels suffering the most, so THA is asking the government to help by granting soft loans.

He said that about 30 per cent of workers in the hotel sector are expected to lose their jobs next year.

The closure of the Bangkok airports caused damage which could amount to Bt130 billion as the country could lose up to 2.3 million foreign tourists.

Airports of Thailand (AOT) said about 15,000 flights had been cancelled during the eight-day closure of airports, but all airlines had resumed operations at Suvarnabhumi International Airport with the total number of flights now close to the usual 547 flights per day.

However, Phornsiri Manoharn, governor of Tourism Authority of Thailand (TAT), remains optimistic, saying the tourism sector's growth could be revived as TAT and six other industry bodies plan to launch a series of post-crisis promotional campaigns.

TAT also plans more sales and marketing activities to boost domestic tourism next year.

Meanwhile, industry sources said Starwood Hotels and Resorts, the world's largest international hotel chain operator, is considering the shut down of its regional Asia Pacific office in Bangkok, following the work-hour cutback at some luxury properties in major tourist cities.

The regional office was part of a world wide business expansion covering its multibrand management of hotel properties, including Le Meridien, Westin, Sheraton, St Regis and W Hotel.

Source : HotelsMag
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