TO DISCUSS YOUR PROJECT OR LEARN MORE ABOUT OUR SERVICES:

  • This field is for validation purposes and should be left unchanged.

Phuket's Hotel Discounting Impacts Recovery

Category: Hotels, Posted:29 May 2009 | 09:50 am

Phuket hotels have hit panic mode after a high season which saw average occupancies plunge by 20-30% and rates are now in freefall mode. Moving into the island's low season one of the most telling comments I've heard was the Director of Sales and Marketing of a branded 5 star resort saying "if they had to offer any lower rates, they'd be paying people to stay." Perhaps the strongest 'truism' of the present situation is that the hotels set rates and not consumers so most of the blame has to lay on the business practices in the industry.
In a talk by Jonas Ogden of Smith Travel Research who are the industry leader in worldwide data gather for hotel statistics the macro trend for the current market started to register dramatic decreases during 'black October" 2007. Since then every market in the world say downward performance with the exception of the Middle East who started to nose dive in 4th quarter of last year. Market retractions and negative growth are currently being with the exception of the later.
The beginning of the 4th quarter in 2008 hit not only Thailand hard but the entire Asia Pacific region. Looking at RevPar growth in 1st quarter 2009 for major markets only Indonesia with Bali and Jakarta were in positive growth mode. The hardest hit were Beijing, Shanghai, New Delhi, Mumbai, Bangkok and Phuket.
Jonas pointed out the downside of heavily discounting that can in turn result in taking the market years to recover average room rates. In a bull market everyone follows a leader in pricing, while during a downturn or panic the flock of sheep mentality is inherent. Annual budgets and shorter term forecasts become increasingly difficult to manage while 'discounting' often simply multiplies mounting losses from a slowdown. In the current market place the challenge is somehow to match buyer's expectations with those of sellers and arrive at a business strategy that accounts for not only today but a longer term horizon.

Other News

Read more

C9 Hotelwork’s Releases Philippines Branded Residences Report

Category: Real estate, Posted:25 Feb 2024 | 19:51 pm The Philippines branded residences market is experiencing a significant maturation, impacted by urbanization and a post-pandemic shift in lifestyle changes. The market is poised for a high level of growth. C9 Hotelworks newly released Philippines Branded Residences Market Update shows a 105% increase in the pipeline, translating to an additional 5,599 units supplementing the current […]
Read more

Phuket’s Largest Highway Interchange Expected To Attract Largescale Development

Category: , Posted:10 Feb 2024 | 09:42 am The release of plans for a massive highway interchange in North Phuket is spurring development activity in the Mai Khao area. A Mueang Mai interchange on the road leading to Phuket International Airport on the island’s main North-South artery will also have a  direct connection to the East Coast spur highway 4027.  (CLICK to see […]
Read more

GOCO Hospitality Inks Deal With Singapore Temasek to Expanded Wellness Resorts in Thailand and Southeast Asia

Category: , Posted:07 Feb 2024 | 10:33 am Leading Bangkok-based wellness group GOCO has signed a deal with Singapore’s Temasek private equity group via The Fullerton Fund. The injection of funds into GOCO is reportedly ‘high eight figures’ and will fund expansion in Thailand and Southeast Asia into hospitality assets. Two acquisitions are expected to be announced in March by Founder and CEO […]
SiaJai logo

Thailand's Leading Homecare Marketplace