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Strong Baht Concerns For Thai Hotel Sector

Category: Hotels, Posted:21 Feb 2019 | 06:00 am

Thailand’s baht performance against Asian currencies in 2018, was unmatched, with the exception of the Japanese yen.

Commenting on the trend financial news Bloomberg have highlighted that in 2019, a further 4% in growth this year have it sitting at the top of the table.

Oddly, one of the underlying factors stimulating the baht’s appreciation is the recovery in tourism arrivals which has a double-digit impact on the country’s GDP.

While the elections remain a wild card on forward expectations, the reality is that the currency has not been hit like the Chinese yuan, which has been disrupted by a threatened U.S. China trade war and slowdown in its economy.

Despite higher than expected tourism numbers in 2018, hotel owners are cautiously optimistic on the prospects for the year.

In reality, despite rising prices for visitors, the economic climate is leading many property developers turning to hospitality assets as the real estate market remains volatile. The general view is that sustainable cash flow as part of their business mix is good and that tourism fundamentals remain strong.

Still, looking at nearby competitors such as Vietnam, which is rapidly growing from a cub into a tourism tiger, the issue of affordability is concerning. Currency swings remain a real and present factor in demand, so expect hoteliers to keep watching currency levels closely in 2019.

 

 

 

 

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