It is reported that thanks to the visa exemption and various festival activities, the tourism industry, an important pillar of Thailand's economic growth, will grow faster than expected in the first half of 2024, although Chinese tourists have not yet recovered to pre-epidemic levels. Nevertheless, the hotel business in Thailand has also fully benefited, with revenue in the first half of this year likely to reach pre-pandemic levels.
The Krungthai COMPASS Research Center of Krung Thai Bank expects the revenue of Thailand's hotel business to reach 900 billion baht and 960 billion baht respectively from 2024 to 2025. Although the number of foreign tourists in the first half of this year only recovered by about 88% compared to the same period in 2019, the average hotel occupancy rate by region reached 72.6%. At the same time, the average hotel room rate is also 9% higher, about 1,920 baht per room, and foreign tourists mainly stay in 4-5 star hotels, but hotels with 3 stars and below are relatively slow to recover.
As for the three major factors facing the recovery of Thailand's hotel business, the main ones are:
1. Oversupply of hotel rooms in the market: As of July 2024, the number of hotel and resort rooms in Thailand reached 690,000, an increase of about 20.2% compared with the pre-pandemic level, and the growth rate in major tourist cities such as Phuket, Chonburi and Chiang Mai was also as high as 26-36%;
2. Chinese tourists have not fully recovered: Thailand expects the number of Chinese tourists to reach 7.5 million and 9.7 million respectively from 2024 to 2025, a recovery of 68% and 87% respectively from 2019. In addition, due to the economic situation, Chinese tourists have become more cautious in spending, and the trend of independent travel has also led to a decrease in the number of major tour group customers of 3-star hotels in Thailand, including more and more visa-free countries to China;
3. High costs in all aspects: At present, the labor and salary costs of the hotel business in Thailand are as high as 30%, and the high electricity and financial costs have exacerbated this pressure; If the Thailand government raises the minimum wage to 400 baht per day, all these factors will have a significant impact on the hotel business.