Connect with us

Business

Home alone. Phuket hotels hit a speed bump.

Published

 on 

Thaiger deals Thaiger deals

by Bill Barnett of c9hotelworks.com

In the latest news, Singapore’s move to impose a stay-home policy or self-isolation for travellers within ASEAN, has hit the industry hard. Here in Phuket, hotels are winding down their traditional snowbird European business which for the most part was booked well in advance. Rates have somewhat held during this time.

One key barometer of things to come is the Russian segment, that has remained at reasonable levels in March and moves significantly downward in April. Once they move out, hotels are reporting negligible forward bookings.

Seasonal trading has shoulder and low season rates kicking in during mid-April to May and that is when room rates are expected to sharply drop.

As for the recovery bounce which everyone is talking about, the hope is that July and August which are two of the strongest months for Mainland China given school holidays and summer will see them return. Australia also ticks up in this season so if recovery is possible, these will be the first markets to return.

If the Coronavirus crisis is prolonged, a market recovery or the bounce will be pushed into the fourth quarter, when seasonal patterns emerge and the legacy snowbirds start to return.

Sadly, the low season supplementary business for MICE looks to be on the sidelines for much of the year, hence low season will see rate driven strategies to maintain cash flows.

Most worrisome is the impact on hotel and tourism employees, who often rely on more than 50% of their income in service charge. These core contributors to the Phuket economy in many cases will see a negative wealth swing, meaning debt will surpass assets, as do stress levels.

In our talks with hotels, many are working to assist employees in bank issues presently and this situation will grow worse in low season. Hotel owners face similar situations, and if any government intervention is needed, it’s within the consumer and business loan sector.

One of the biggest concerns on the island is over potential closures of bars and restaurants, which again will hit low-wage earners. Thailand has yet to act on this but from a risk mitigation point of view, this is a worst-case scenario.

Trying to predict the future is impossible, but history and cycles indicate that Asia will potentially lead the global recovery but the timeframe for this to trend in hotels is when higher rates are possible. Hence a fourth quarter uptick during the next high season, driven on seasonally strong travel patterns is the best forecast.

 

Get more from The Thaiger

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Bill Barnett has over 30 years of experience in the Asian hospitality and property markets. He is considered to be a leading authority on real estate trends across Asia, and has sat at almost every seat around the hospitality and real estate table. Bill promotes industry insight through regular conference speaking engagements and is continually gathering market intelligence. Over the past few years he has released four books on Asian property topics.

Follow Thaiger by email:

Thailand5 hours ago

Cabinet seems to have ignored 4am nightlife proposal

Video6 hours ago

THAILAND NEWS TODAY | Korean woman arrested for 5-million-baht theft, 6-year overstay

Crime6 hours ago

Tuhao’s Chinese gang buys 50 homes in Bangkok luxury village with cash

Sponsored8 hours ago

Krungthong Plaza offers endless choices of well-selected plus-size fashion products

Road deaths7 hours ago

Bus flipped in Tak injuring 44 Burmese workers, killing 3

Thailand7 hours ago

3 men were arrested for stealing Thai Internet connection & World Cup betting in Cambodia

Pattaya7 hours ago

Intoxicated Pattaya woman left uninjured after overturning car

Join the conversation on the Thaiger Talk forums today!
Crime7 hours ago

Woman who allegedly scammed victims for over 30 million baht arrested in Pattaya

Bangkok8 hours ago

Bangkok BTS Skytrain fares to increase next year

Thailand8 hours ago

Police put brakes on car rental thief in Bangkok

World8 hours ago

New drug marks major milestone in slowing Alzhemier’s

World Cup8 hours ago

400 to 500 migrant workers in Qatar died due to World Cup, not 6,500

Visa9 hours ago

Thailand advises Indians to obtain visa prior to travelling to avoid long queues

Thailand10 hours ago

Driver furious with Bangkok shopping mall after foreigner accidently causes damage to her car

Politics10 hours ago

Iran promises Thailand it won’t attack Israeli tourists

Crime10 hours ago

Korean woman arrested for 5 million baht theft, 6-year overstay

Thailand1 year ago

Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14

Thailand2 years ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism2 years ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket2 years ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism2 years ago

Phuket Thai food treats you need to try | VIDEO

Thailand2 years ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism2 years ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand2 years ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand2 years ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand2 years ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand2 years ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand2 years ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand2 years ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand2 years ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand2 years ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Trending