The country’s hotel performance and development activity remain strong despite political unrest likely to spill over into 2014.
Recent political unrest has done little to slow Thailand’s steady ascent toward the top of the globe’s tourism powers.
The southeast Asian country has been besot by protests through the end of the year, sparked most recently after the ruling party tried to pass an amnesty bill for participants in past political violence. Although the bill was killed after outcry from human rights groups and politicians alike, opponents seized on the anger and organized protestors numbering up to 200,000 in Bangkok in an attempt to topple the government, according to reports.
On 9 December, prime minister Yingluck Shinawatra—sister of a previous prime minister who was in power for five years before a 2006 coup d’état—announced a new general election for 2 February, a decision that calmed the situation but could still prove volatile in its run-up.
At least 39 countries have issued travel warnings, and the prolonged protests could push arrivals down 1.3% from an expected 26.1 million to 25.8 million for year-end 2013, according to a Reuters report.
But these problems lie in stark contrast with Thailand’s position as one of the planet’s tourism superstars.
November year to date, occupancy in Thailand was up 7.6%, according to STR Global, sister company of Hotel News Now. Average daily rate and revenue per available room also were up—to the tune of 7% and 15.1%, respectively, in Thai baht terms.
In capital city Bangkok, occupancy was up 7.3%. ADR was up 6.7%, and RevPAR was up 14.4% during the first 11 months of the year, according to STR Global.
“The blip during those 10 days (in early December 2013) was not in the tourism areas. It did not affect business from Europeans, who are more circumspect, but cancellations did come in from Asia, especially corporate business. Business from Japan, Singapore and the United States is quick to cancel, and we have seen that over the last 20 years,” said Chris Lee, London-based trade marketing manager for the Tourism Authority of Thailand.
Lee added that if these troubles occurred in busier January, rather than in December, there might have been more ramifications for the hotel industry.
“Historically, (Thais) are business owners and shop keepers, and they are not interested in looting their own shops. The fact is that people here are less concerned about (the prime minister’s) survival but rather with the looming and over-arching possibility of the elderly (86-year-old) Thai king dying,” said Jesper Palmqvist, area director of Asia/Pacific for STR Global.
“The more serious problem is the lack of a master plan for future hospitality investment, hotels and airports in Thailand,” he added.
According to Palmqvist, the recent political situation was never a fully blown crisis.
“I was in Bangkok during the more hyped days, and it’s always worse in the foreign press than what it actually is on the ground. 2010 was, of course, really bad, and it killed off tourism numbers quite well,” he said.
One repercussion stemming from Thailand’s recent problems was the temporary cancellation of the initial public offering of Krung Thai Asset Management, which includes the Thai Hotel Investment Fund, with hotel properties in Bangkok, Phuket and other Thai destinations, among its portfolio.
Pillars of strength
According to Lee, Thailand’s success stems from its excellent national carrier, Bangkok’s status as a southeast Asian regional hub, and the country providing nearly everything a tourist could wish for, except, he said, “snow, which we are not prepared to grow.”
“China is providing huge numbers of tourists, 4.1 million in the 10 months to October 2013,” he said. “And there are more than a million arriving from each of Malaysia, South Korea and Russia, which posted 1.3 million arrivals.
“Japan has had a recovery, and it, too, sees more than a million coming. And it is not just regional travelers—more than 27,000 came in this period from Brazil,” Lee added.
Another reason for Thailand’s travel resiliency amid recent crises—including the 2002-2003 SARS epidemic, the 2004 tsunami and 2013 flooding—is its excellent hotel offerings.
“It is easier to build hotels here, and the scale and speed of the growth in hotel rooms in the last five years is staggering, and Thailand is continuing to evolve,” Lee said. “A great example is Khao Lak, which was almost flattened by the tsunami and has completely bounced back, and not just at the top hotel end either.”
There are 1,067 hotels in Thailand and an additional 29 under construction, according to STR Global.
Thai hotel brands and Thai cultural sensibilities are finding homes outside Thailand. Anantara Hotels, Resorts & Spas has properties in Cambodia, Indonesia, The Maldives, Mozambique and the United Arab Emirates, while Centara Hotels & Resorts, one of the largest hotel groups in Thailand, now has properties in The Maldives and United Arab Emirates.