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Thai resort prices starting to squeeze Europeans

Thai resort prices starting to squeeze Europeans

BANGKOK: A holiday in a popular beach resort in Thailand now costs as much or more than one in Greece, Italy, Spain, Turkey and Egypt, which is making it harder to attract Europeans to the country, according to a global travel website.

tourismeconomics
By Bangkok Post

Sunday 17 November 2019, 12:25PM


Prices at resorts closer to home for Europeans are now on par or even cheaper than those charged by hotels in key resort areas in Thailand. Photo: via Bangkok Post

Prices at resorts closer to home for Europeans are now on par or even cheaper than those charged by hotels in key resort areas in Thailand. Photo: via Bangkok Post

The report by Skift drew on interviews with a number of Europe-based tour operators, who said their customers’ other concerns included overdevelopment of Thai tourist destinations. Some also complained that the growing focus on Asian travellers in Thailand, especially Chinese, had left some Europeans feeling less welcome.

The cost of a five-star resort in Koh Samui, Koh Phangan and Koh Samet has reached the equivalent of US$500 per room per night including American breakfast, Skift said, citing figures provided by Diethelm Travel Group, one of the oldest and most established tour operators in Thailand.

That is similar to the cost of a five-star beach resort in Greece, Italy and Spain, and more expensive than a comparable property in Turkey or Egypt, which costs $350 a night, according to Diethelm.

Prices for four-star Thai beach hotels also show a similar pattern, according to Diethelm: They cost around $350, as do counterparts in Greece, Italy and Spain, and are higher than the $200 seen in Turkey and Egypt and $300 in Germany, Austria and Switzerland.

The price of a Thai holiday has increased by about 30% in US dollar terms and 40% in euro terms over the last five years due to the appreciation of the baht and inflation, Skift quoted Diethelm CEO Stephan Roemer as saying.

“This is definitely too much,” said Roemer, who also owns Switzerland-based Tourasia, which specialises in Asia holidays.

“Hotels at the well-known resort areas in Thailand are more expensive than comparable resorts in Europe. I fear a negative impact in the medium to longer term (six to 18 months) particularly for the leisure market to Thailand.”

Thai industry players agree that the strength of the baht, due largely to the country’s healthy current account surplus, is a major concern. The Thai currency is now trading around 30 to the US dollar, compared with 35 just a few years ago.

“Although there have been many talks to resolve the issue, the baht keeps strengthening, and this is a tough challenge for our tourism industry, I admit that it has a negative impact on our business,” said Danai Wansom, president and CEO of Well Hotels & Resorts Thailand. “I believe, although I do not want to, that the baht could reach below 30 baht to the US dollar.”

But despite baht appreciation, the Skift report said, “many Thai hotels have raised rates as they can count on Asian first-timers and repeat visitors to continue to flock Thailand”.

However, a guest mix heavily slanted towards Asia has become an issue for some upmarket European guests, it added.

“Some of the hotels have shifted their guest mix and sell a bigger percentage to the Chinese market. So the atmosphere in the hotel can change to the point where clients tell us they will not go back. This is a very important issue,” said Ruth Landolt, general manager of Asia365, a Zurich-based firm that offers tailor-made tours to Asia for German-speaking markets.

Landolt saw a “two-digit drop” in business to Thailand this past summer although the upcoming winter business is “looking good, so we hope for the best”, she said.

“Thailand still has many places with a competitive edge, and those hotels that have maintained their rates are suffering much less, while those that have not listened and increased their rates considerably are now hitting the market with sometimes crazy reductions,” she said.

CIBS 2020 - The 25th China (Shanghai) International Boat Show

“The destination that is getting a lot of business now is Vietnam,” she added. “We also have a lot of business to Japan, but this is a different market. Thailand is competing with Southern Europe, Egypt, Mexico, and the Caribbean or Indonesia.”

To David Kevan, a director at Chic Locations UK, the baht and Brexit are least of his concerns. One reason is the tour operator has made a conscious effort to attract more clients aged 55 and up who are less affected by Brexit or the baht, and less tied to rigid travel dates.

His top complaint with Thailand – and with neighbouring destinations such as Vietnam and Cambodia – is overdevelopment.

He foresees many hotels in Bangkok, Pattaya, Hua Hin, and Phuket, in particular, being turned into condos in the next few years due to oversupply and owners wanting a quick capital return.

In Vietnam, certain resort destinations are “unrecognisable” from five years ago, he said, while Sihanoukville in Cambodia “is just a disaster on every level unless your focus is solely on low-end Chinese sex and gambling tourism.”

Chic Locations’ business to Phuket and Koh Samui is down year-on-year, which Kevan puts down to overdevelopment and “overfamiliarity” rather than Brexit or baht.

These islands have lost their glamour, he said. “It’s very much ‘been there, done that’. However clients are using the improved air links into both as gateways to travel onto Khao Lak, Koh Phangan and Koh Tao, so our business to Thailand this year on the whole is about 5% up, with Khao Lak, Koh Samed and Koh Kood all performing well.”

The concern is that these islands will go the way of more established destinations and lose their quality and uniqueness eventually.

“Most of our clients want to see the uniqueness of Thailand. They are prepared to travel a little longer to discover resorts that are far removed from the mass market. And Thailand has these quiet places in abundance,” said Kevan.

The Tourism Authority of Thailand has forecast that arrivals from the UK to Thailand will decline slightly to 950,000 this year, from 954,000 in 2018.

“We consider this number satisfactory, as through this year we have been working on many challenging factors such as, the US-China trade war, the concern about Brexit, and definitely the Thai baht appreciation. Decision-making is no longer as easy as it used to be,” said Tanes Petsuwan, deputy governor of marketing communications, speaking at a Thailand networking lunch at World Travel Market last week.

Kasikorn Research Center expects the whole European market to Thailand to decline 1.5% this year to reach 6.66 million arrivals, with spending to shrink 1% to B468 billion.

 

Read originals story here.

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fedepar | 26 November 2019 - 10:16:44

…...Only the climate remain, but maybe it is no more sufficient.
From the other side Phuket is targeting the new type of tourists that are coming now, that likes dolphin shows and commercial malls, but this kind of attraction could be built anywere in the world, no need to be in Phuket.
If Phuketians like this type of noisy and low spending tourists it is ok, if not they are making a big mista

fedepar | 26 November 2019 - 10:12:09

Thailand has attracted in the past flocks of western tourist thanks to some particular feature that was most appreciated by western people:  landscape and beaches, climate, security and affordable prices.
Now the prices are going to the sky, the security (on the roads and inside the houses) is now just a souvenir, the landscape is covered every day by more and more huge and orrible codominiums...

Kurt | 17 November 2019 - 14:13:27

...specially for children.
Many foreigners, previous repeaters. turn their back to Thailand.  It's all about a list of reasons.  The Phuket water disaster also not contribute to tourist confidence, as Officialdom so far never come up with a solution to stop it. Just report how it gets worse and worse.

Kurt | 17 November 2019 - 14:07:44

Well, marketing, with a international scope is not what thai do. It is all,...'this is the way we do it'..  Like, lesser customers? Than prices go up, hahaha.  Fine, but than not feel strange when your marketing is international not matching. Not with THAI, not with taxis, Van's, hotels, and unsafe beaches, some even with dirty water, causing eye, nose and ear problems, specially for c...

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