Small hotels recover in Thailand as foreigners move downmarket

As small hotels recover in Thailand, returning tourists are choosing different options from pre-pandemic staples.

A study of small hotels and hostels found booking growth is now higher than before the pandemic, with bookings from overseas tourists exceeding those of local travellers.

As small hotels recover in Thailand, bookings are up by a quarter from the pre-Covid levels, according to Supakrit Phansomboon, Little Hotelier’s country manager for Thailand, in the Bangkok Post.

Data was gathered from operators of hotels and hostels below three stars in Thailand. Most have 20 rooms or fewer. Booking growth surpassed the global rate of 13.5%.

In March 2022, bookings from foreign and local tourists were equal. Today, bookings by overseas visitors dominate at almost 80%. Bookings from mainland China tourists are up 41% compared with two months ago.

Major online travel agents (OTAs) such as Booking.com and Agoda are the top revenue channels for Thai accommodation, but direct bookings play a key role, ranking third in terms of revenue.

The study found tourists now tend to stay longer. “Workcations” have flourished, especially among European and American tourists. American tourists spend more money in Thailand on average than European tourists, according to the Tourism Council of Thailand.

Tourists are also spending around 21 days making a decision, prompting hotels to prepare room promotions weeks in advance, said Supakrit.

The cancellation rate in 2022 was 21%, down from 26% in 2021. The pre-pandemic cancellation rate was 15%.

Supakrit said that Little Hotelier‘s customer base in 2022 had increased by more than a third since 2019, with demand based on technology for small hotel managers. He expects the database to grow 30% this year.

The company features roughly 9,000 small hotels and other accommodations globally. As small hotels recover in Thailand, the kingdom is contributing the largest share regionally.

Tourists may be spending more money than usual as Thailand is granting tourists longer stays in the kingdom.

Until the end of March, 45-day visa-free stays are available to tourists from 64 countries, and 30-day stays for passport holders from 19 countries.