Display mode (Doesn't show in master page preview)

30 Oct 2020

Econ Digest

Beautiful accommodation and impressive spots for taking photos become main factors for current tourists in choosing accommodation

The hotel and accommodation industries are sectors of the tourism industry that have been hard hit by the coronavirus (COVID-19) pandemic, and especially in the first half of 2020 have suffered a revenue loss of approximately THB256 billion due to the absence of foreign and Thai tourist arrivals. This is reflected in an average 53% YoY contraction in the revenue of the Thai listed hotels, particularly in the second quarter of 2020 when the national average occupancy rate was only 7%.   

 

While tourist arrivals are expected to recover during the period from late 2020 through next year, the hotel indusry will remain highly constrained because customers will continue to be primarily Thai tourists and the number of foreign tourists will remain limited. Although the Thai government has eased the entry regulations for specific groups of foreign tourists, including those wishing to stay for a long period or on a Special Tourist Visa (STA), it is expected that it may take at least three years for the inbound tourist market to recover to the level seen before the COVID-19 pandemic in 2019. KResearch believes that the average occupancy rate for the rest of the year will remain below 40%, reflecting the fact that although the revenues of hotels and accommodation businesses have recovered compared to the period before the lockdown measures, they are still far below the normal level seen before the pandemic.

 

Another important factor is that the number of rooms available is higher than the demands of domestic tourists only, leading to fierce price competition, especially among 4-star hotels and inns who have begun launching special price packages to attract tourists to opt for their services. This is evidenced by the 22.3% decline in their national average room rates in the first half of 2020 compared to the average of the past five years, and price competition tends to intensify. The above factors will pose a challenge to the hotel and accommodation industries for the rest of this year and 2021, especially in areas with high room supply such as Bangkok, Chonburi, Phuket, Phang Nga, Surat Thani, etc., where a large number of rooms are available, with foreigner tourists as the main target group and accounting for not less than 60% of the total number of visitors to these areas, forcing some operators to choose to suspend services or cease operations.

 

KResearch believes that hotels and accommodations that remain open to provide services will continue to face severe challenges, especially those with high fixed service costs, making it neccessary for them to find ways to increase net income to survive. While there is no formula for success, operators can consider: 1. Increasing the flexibility of their management system and maximizing the efficiency of resource use; 2. Opening serivces to reduce costs if occupancy revenue is expected to rise in future and exceed the break-even point; 3. Adjusting markets to further penetrate the Thai tourist base.

 

The results of the survey on tourists’ accommodation choices show that the respondent group does not consider accommodation prices, cleanliness and services to be the main factors currently influencing their decision in choosing accommodation. Tourists focus on other factors, including the quality and environment of accommodations, as well as the presence of selling points in the accommodations that impress the occupants and influence their stay experience. The majority of respondents in the 25-36 age group (Gen Y) choose accommodation that is well decorated and photo-friendly rather than focusing on the reputation or brand of the hotels. These factors not only impress the occupants, but also indirectly promote the hotels when the photos are widely shared on social media. It was also found that online channels have played a significant role in the travel journey of tourists, starting from searching for tourist attractions and accommodation information on social media, to booking accommodation directly on the operator’s website or through online accommodation booking platforms such as Agoda, Booking.com, Traveloka, etc., as well as post-stay ratings and reviews, making rapid and comprehensive management of online channels crucial for today’s hotel and accommodation operators.

Scan QR Code


QR Code

Annotation

This research paper is published for general public. It is made up of various sources. Trustworthy, but the company can not authenticate. reliability The information may be changed at any time without prior notice. Data users need to be careful about the use of information. The Company will not be liable to any user or person for any damages arising from such use. The information in this report does not constitute an offer. Or advice on business decisions Anyhow.

Econ Digest