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

Patong Hotel Conversion For Banyan Tree’s New HOMM Brand

Category: Hotels, Posted:12 Jan 2022 | 08:00 am The 71-room Bliss hotel in Patong, Phuket has been converted to Banyan Tree’s HOMM brand. Banyan Tree is looking to fast-track expansion with three new brands a key strategy of conversions of existing hotels. The HOMM Bliss Southbeach Patong is the debut for the lifestyle-focused HOMM. Expect more announcements shortly on new Banyan Tree brands […]
Read more

Three More Thailand Sandboxes Join Phuket On Tuesday

Category: Tourism, Posted:09 Jan 2022 | 20:33 pm The Thai government has added three more  Sandbox destinations along with Phuket for vaccinated international travelers. Effective on Tuesday 11th January 2022, Phang Nga (including Khao Lak), Krabi, and Surat Thai (Koh Samui, Koh Pha-ngan, and Ko Tao) will be open to Sandbox visitors. The current Sandbox restrictions mean a minimum of seven-night stays in […]
Read more

Choice Brand For New Phuket Hotel

Category: Hotels, Posted:30 Dec 2021 | 09:37 am The new upscale Quality Resort and Spa Patong will open in early 2022. Quality is a brand under Choice Hotels International, and the property is operated under a master-franchise agreement with a third-party management group La Vie Hotels & Resorts. La Vie currently operates a number of hotels across Asia Pacific. With 88-rooms, the Quality […]
SiaJai logo

Thailand's Leading Homecare Marketplace