Hotels Struggle to Maintain Revenue Growth Amid Ongoing Challenges
PUBLISHED : 12 Sep 2024 at 07:16
Hotels catering to mid-priced and budget travelers are facing significant challenges, as price sensitivity continues to impact occupancy rates. In August, hotels rated under four stars reported difficulties in maintaining their room availability.
According to insights from the Thai Hotels Association, the average occupancy rate for hotels across the nation saw a slight uptick to 61.8%, up from 58.4% year-on-year. However, this remains below the pre-pandemic occupancy level of 64.7% recorded prior to COVID-19.
Particularly alarming is the performance of three-star and lower hotels, which experienced a drop in average occupancy to 49.3%. In contrast, establishments with four or more stars benefited from an increase, achieving an occupancy rate of 68.8%.
Data revealed that 40% of respondents among hotel operators reported an inability to resume full revenue recovery, with 20% indicating they may need to wait until at least the second quarter of next year to regain normalcy. A notable 7% remain pessimistic about a complete rebound to pre-pandemic performance levels.
Conversely, only 31% of respondents noted they had surpassed pre-pandemic revenue figures, primarily attributed to increased room rates following renovations and service upgrades.
The primary clientele for these hotels consists largely of international guests, making up over 50% of their occupancy, with significant numbers from regions including China, the Middle East, Europe, and other parts of Asia.
However, those hotels unable to elevate their pricing attributed their struggles to customer price sensitivity (63%), fierce competition (55%), and a decline in bookings (42%).
The average room rate for mid-range hotels remains below 1,500 baht per night, showcasing a stark difference compared to five-star hotels, where rates exceed 5,000 baht, and four-star hotels priced between 1,500 and 2,499 baht.
Additionally, the ongoing labor shortage continues to be a significant hurdle, with approximately 40% of hotels still unable to fill vacant positions, particularly affecting establishments in the Central region.
