Thienprasit Chaiyapatranun, President of THA, said the unresolved conflict in the Middle East continues to hamper the hotel business from May onwards, as all regions report a decline in forward bookings, mainly driven by the European and Middle Eastern markets, reports the Bangkok Post.
He said luxury hotels in May report a 40% occupancy rate, down 3% year-on-year, particularly in Samui, Phuket and Krabi as there are fewer tourists and flight crew.
The outlook for the second quarter is expected to worsen as European markets continue to be hamstrung by pricey airfares driven up by rising jet fuel prices.
Across all hotel segments in the South, Phuket recorded a decline from European markets of 17.5%, while Krabi fell 20-30%, especially among visitors from Germany and the UK.
However, the two provinces could offset long-haul tourists with the Chinese market, as Krabi recorded growth of more than 100% and Phuket 9%, noted Mr Thienprasit.
The Indian market emerged as the top inbound market for Krabi, while Phuket secured growth of 15.3%. The Malaysian market has begun to return, posting 5.3% and 9% growth in Phuket and Krabi, respectively.
For Phang Nga, typically the main destination for European markets, the outlook in the second quarter is worsening compared with other provinces as its occupancy rate in May plunged to 20-30%. In addition, forward bookings for the next high season from European markets are slower than usual, he said.
The average occupancy rate in the South is likely to remain uneven, with Phuket maintaining a more stable position at 40-60%, while Krabi and Phangnga are expected to achieve 20-40% rates, said Mr Thienprasit.
Markets might be able to compensate in terms of volume, but cannot fully offset the revenue dip, meaning that hotels are not expected to raise the average daily rate despite increased demand, he noted.
For the North, the average occupancy rate for May is 41.2%, down from 61.5% year-on-year, while forward bookings during the low season remain on a downward trend.
“Hotels in the North have continued to record weaker performance than other regions since the Songkran holiday as they are hampered by high levels of PM2.5. Both short-haul and domestic markets are reluctant to book trips, even during the long holiday this weekend,” said Mr Thienprasit.
Many guests are refraining from travel until the war in the Middle East subsides and airfares become less expensive, he said.
Hotel operators are monitoring bookings for July and August, which usually attract families from Europe, as some series bookings from tour agents are continuing to be cancelled, said Mr Thienprasit.