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Home alone. Phuket hotels hit a speed bump.

Bill Barnett

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Home alone. Phuket hotels hit a speed bump. | The Thaiger
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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.

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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.

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Coronavirus (Covid-19)

BOT responds to temporary breakdowns for online payments

Anukul

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BOT responds to temporary breakdowns for online payments | The Thaiger
PHOTO: Ananda

The new online payment systems, put in place to provide payments related to government stimulus packages, have suffered from temporary breakdowns in the past few days. Today users also reported problems with the Bangkok Bank’s online payment system and ATMs machines going offline.

More users are also reporting problems with the governments’ website providing financial support for informal workers during the outbreak.

Siritida Panomwon na Ayudhya, the Bank of Thailand assistant governor of payment systems policy and financial technology says the BoT is closely monitoring the situation in order to solve any problems as soon as possible.

“The server has been crashing and temporary break downs of the website (www.เราไม่ทิ้งกัน.com) in the past few days.”

“The BoT has asked banks and other financial institutions to monitor any glitches on their online transaction systems and solve them quickly. The institutions have been urged to ensure that the problems are solved within 24 hours.”

SOURCE: The Nation

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Coronavirus (Covid-19)

30,000 Thai hotels to lose all revenue during April

Anukul

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30,000 Thai hotels to lose all revenue during April | The Thaiger

According to the Thai Hotels Association, out of the 32,564 hotels registered in Thailand, 95% will lose all revenue during April as the temporary lockdown escalates around the country. Adviser to the THA, Surapong Techaruvichit says that the number of hotel closures is growing every day as more provinces have imposed stricter lockdown policies.

“Phuket is the latest major tourism destination prohibiting people from free travel in and out of the area. Most hotels in provincial areas prefer a clear order from the authorities to close all hotels for the sake of employees, making them eligible for benefits from the Social Security Fund.”

“THA is asking members to look after the welfare of workers, such as offering hotel rooms and meals for those who can’t afford to pay rent and food, but it is hard for business operators to keep supporting employees as nobody knows how long the Covid-19 pandemic will last.”

“We strictly follow the rules by contributing 10% of salary to this fund, in which both employers and workers pay 5% equally, for example, a hotel with 550 staff will have to contribute at least 700,000 baht every month to pay for the Social Security Fund. But during this tough time when business operators have no income, and cannot continue to pay the levy to employees who are in need of it the most.”

The president of THA’s southern chapter, Kongsak Khoopongsakorn says that 87% of hotels in Phuket intend to temporarily close during April to comply with the one-month lockdown.

“There are no tourists in the province at this point and it is possible that the closure could extend beyond April if the outbreak still remains uncontrollable.”

Most of the 3,000 foreign visitors in Phuket are expected to leave before the airport is closed on April 10.

SOURCE: Bangkok Post

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Coronavirus (Covid-19)

Thai restaurants and food chains switching to home deliveries

Anukul

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Thai restaurants and food chains switching to home deliveries | The Thaiger
PHOTO: scb.co.th

A difficult time for restaurants as the government rolls out lockdowns across the country. So many of the restaurants and food chains are changing from sit in facilities to home delivery. They’re saying that they need to switch their financial strategy to stay afloat as the spread of Covid-19 becomes more serious in Thailand. So they’re becoming ‘virtual’ restaurants providing the same food but as a home delivery instead.

Smaller restaurants will have the option of either providing their own deliveries and reaching out to their customer base on social media, or registering with some of the App-based service providers like Grab Food and Food Panda. But these services take a whopping commission to be listed.

Otherwise their only other option is to close for now until the current situation passes. (Mr. Google is going to be your best help to find local deliveries at this time)

Nadim Xavier Salhani, CEO of Mudman, the operator of Dunkin Donuts, Au Bon Pain, Baskin-Robbins and Greyhound Cafes, says the company’s sales have already dropped 30%.

“The delivery business has not increased as expected because consumers’ behaviour has changed with the outbreak. Many are opting to cook their own food, while delivery competition is fierce. We are still paying our employees, but may have to make cuts in April. Everyone has to accept the pay cut because it is better than a layoff.”

“I want government announcements to be clear. So far the decisions are very grey and confusing. Communication is very weak. The policy has to be clear.”

Boonyong Tansakul, chief executive of Zen Corporation, the operator of food brands such as Zen, AKA, Tummour, Din’s and Khiang, says…

“The company willtoday start to provide delivery service for Khiang around the clock until April 12. The company will assign some staff to recruit new customers in residential areas such as Sukhumvit, Silom, Sathon, Thong Lor and On Nut, offering customers the option to buy three meals on a daily, weekly or monthly basis to increase sales opportunities.”

For the consumer there is plenty of selection and new protocols for delivery which will guarantee the safety of the delivery service as well as customers.

Thai restaurants and food chains switching to home deliveries | News by The Thaiger

SOURCE: Bangkok Post

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