Hard-hit hotels ready for price war

A hotel price war is expected in Bangkok once the political turmoil ends. Tourism-related businesses expect to see losses from the anti-government protests that began last November at the start of the high season.

However, when the political unrest ends and the hotel sector starts to bounce back, hoteliers will probably use pricing to grab a larger slice of the cake.

Chanin Donavanik, the chief executive of the Thai hotel chain Dusit International, said the industry, particularly in Bangkok, cannot avoid a price war after political problems are solved.

"The government will only do promotions such as grand sales to lure back tourists, but this will not be enough, and hoteliers will try harder to play with pricing. It's not 100%, but we expect to see this situation," he said.

He hopes the political problem will be solved this week. If the situation is prolonged, hotels in Bangkok will see their room rates plunge dramatically, especially the rates quoted by international travel agents.

Dusit had expected average hotel room rates in Thailand to start increasing this year and that 2014 would be the best year for the hotel and tourism business since 2008.

"That hope was ruined with the rising temperature from political problems as the Yingluck Shinawatra government insisted on moving forward the blanket amnesty bill," Mr Chanin said.

"I want to know what will happen next? When will all the problems end? The average hotel room rate in Bangkok remains lower than in 2007, while other destinations such as Singapore, Hong Kong and Malaysia have seen their rates increase continually."

If the protests do not end by early March, hoteliers attending ITB Berlin 2014 in Germany from March 5-9 will face hard times because travel agents will lower their room prices substantially.

Dusit accepts it will miss its 10% revenue growth forecast this year because its major revenue-generating hotel, Dusit Thani Bangkok, has been affected by the political unrest.

As of last Thursday, the hotel's occupancy rate was only 20%, compared with 80% normally.

The company pins its hopes on the next high season starting in the fourth quarter and hopes political problems will not resurface.

Thailand's tourism industry has faced difficult times due to political problems since the end of 2008.

"We realise it is too risk to rely on business in Thailand, so we have to expand our business abroad," said Mr Chanin.

Dusit operates 12 hotels in Thailand and 11 properties internationally. It will add 16 hotels abroad soon, while 15 others are under development.

Share your thoughts

Discussion 1 : 20/01/2014 at 12:35 PM
I don't see it happen. The usual response is to increase the prices to make up for the lost revenues. Since 2008 my favourite hotel on Thanon Petchburi has gone up 200 baht each year, every year. Just like clockwork. Same for the hotels on Sukhumvit. If you're looking for an affordable hotel nowadays Silom/ Sathorn seems to be the place from iPhone application.
Discussion 2 : 20/01/2014 at 12:00 PM
lmao I get good room with tub and transportion a few feet away and pay only 11 USD a night with breakfast. Outrage over charged.
Discussion 3 : 20/01/2014 at 11:25 AM
'hard hit hotels ready for price war'? what are you waiting for, Chinese New Yr. and then decide?
Discussion 4 : 20/01/2014 at 10:35 AM
Boons, overpriced is charging too much for the area, overrated means they try to build up how good it is, it has nothing to do with comparing with other areas.
Discussion 5 : 20/01/2014 at 09:14 AM
Compared to where?
Discussion 6 : 20/01/2014 at 09:09 AM
Thailand's tourism industry has faced difficult times due to political problems since the end of 2008? Maybe for high-end hotels and shopping plazas. Tourist numbers are increasing year after year according to the government. Is this a white lie? Where do they all go then? Be careful if you think about an entry tax.
Discussion 7 : 20/01/2014 at 05:28 AM
Justice served, the hotels in Thailand have always been over priced and over rated.

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