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Bangkok: After the shutdown, the comeback.
Tuesday, 6th May 2014
Source : C9 Hotelworks

'Brand Thailand' is on the ropes, reeling and trying to shake off the near-knockout blow dealt by the Bangkok Shutdown, with hotel occupancies down more than a third for Q1, 2014.

Over 400 leading figures in the travel and tourism industry packed the InterContinental Bangkok Grand Ballroom for the third Thailand Tourism Forum on April 22nd, with industry heavyweights mostly optimistic that Thailand would show its renowned resilience in shaking off the post-shutdown hangover.

Thailand's comeback would be fuelled by exponentially-rising demand from China, as well as India, Brazil, Russia and Turkey, set against a big picture of strong regional growth and a global travel industry increasingly dominated by Asia.

The forum was organized by the American Chamber of Thailand and C9 Hotelworks together with leading hospitality and real estate industry firms Jones Lang LaSalle (JJL), Horwath HTL, STR Global and the IHG Hotel Group and featured speakers from hospitality heavyweights from the operational, branding, marketing and digital sectors. Among these were senior figures from Minor International, ONYX Hospitality Group, Accor Asia Pacific, QUO Global, Sukosol Hotels, Montara Hospitality, Digital Innovation Asia and Baker & McKenzie.

The forum itself was a victim of the city-strangling shutdown, reconvening after being postponed from early January. Its theme echoed the question on the lips of all participants: "What's Next for Thailand's Tourism Industry?".

The impact of the shutdown on Bangkok had been swift and dramatic, according to keynote speaker Jesper Palmqvist, Area Director Asia Pacific of STR Global, the world's leading hospitality benchmark monitor, with occupancies plummeting over 30 percent in the Thai capital in the first quarter of 2014 compared to the same period last year.

International tourist arrivals to Thailand declined by 4.1 percent in February (year-on-year) and 9.39 percent in March, the latest figures show. This contrasted with a positive regional trend, which saw Thailand's neighbours all experience gains of around two to five percent in occupancy for the first two months of 2014 - with Singapore, Malaysia, Indonesia and Vietnam all beneficiaries of Thailand's latest crisis.

History suggested Bangkok's bounce back from the brink would be equally impressive, Mr Palmqvist said, presenting the latest STR Global data on the local and regional hospitality industry.

Bangkok hotel occupancies in January declined 26% in year-on-year performance. This worsened to 37 percent in February as the protests escalated, choking key city intersections and prompting many embassies to issue travel warnings.

This had not flowed on to a commensurate drop in room rates, Mr Palmqvist revealed, with a drop in rates of less than two percent across Thailand. Nor had it affected Thailand's other resort destinations and gateway cities, with a drop of just two percent for the first two months of the year, offset by a 2.7 percent increase in average daily rates.

"Thailand's resilience is legendary," Mr Palmqvist said. "The big question is how many times it can be relied upon after the latest self-inflicted crisis before Thailand finally loses its bounce."

JJL Senior Vice President, Investment Sales Asia, Nihat Ercan, offered an even bleaker view of the shaky start to 2014 in Thailand, and particularly in Bangkok, putting the drop in occupancies in the capital as high as 35 percent.

"Resort markets like Phuket and Samui remained largely unaffected by the political upheavals, in direct contrast to Bangkok," he told the forum.

Dusit International Chief Operating Officer David Shackleton revealed at a pre-forum press briefing that the group's flagship Dusit Thani hotel had seen occupancies drop, but "never into single figures", during the shutdown, but that had now bounced back to the mid-40 percent range for April and barring more protests, the rate would continue to climb sharply.

Across-the-board belt-tightening, temporary restaurant closures and reassignment of expatriate staff were amongst the tactics the group had been forced to adopt to ride out the crisis.

He also called for the industry to reach out in a united front to key embassies and diplomats to ensure travel warnings were commensurate with the level of risk to travellers. "In the latest crisis, we had Hong Kong issuing a black warning for Thailand, instantly voiding travel insurance and no doubt resulting in mass cancellations and changes in plan, putting us in the same company as Syria."

Forum co-convenor Bill Barnett, of hospitality consulting firm C9 Hotelworks, said Thailand's regional hospitality hotspots had benefitted from a sustained build-up of direct airlift over the past five years.

"Travellers have the option to bypass Bangkok and their confidence in Brand Thailand remains generally positive," said Mr Barnett. "We saw a similar trend demonstrated during the previous crisis in 2011, with primarily resort markets retaining strong international trading."

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