An annual growth of 8-10% in international arrivals and 5-7% in domestic tourism is forecasted for the period 2018-2020. It is likely that the country will be benefitted from Chinese arrivals, remaining a continuous driving force in the tourism or hotel sector.
- With MICE experiencing solid growth in Thailand, hotels rendering services in the country are able to increase their earnings from room rates, sales of food and beverages and hiring of conference facilities as the travelers are traveling on business and typically have high spending power.
- Similarly, domestic tourism continues to grow, benefitting from the government measures in order to stimulate the market by lessening tax on hotel accommodation and related expenses, an extension of low-cost airline flights and the low cost of oil, boosting opportunities more.
The analysis above is in line with the forecasts made by the World Travel and Tourism Council that also anticipates an annual growth of 6.7% over the next decade in the Thai tourism sector.
To cater to the demand of the tourist’s construction permit for new hotels had been granted. With a share of 28.4% of new hotel building permits, the Greater Bangkok Region is one of the most important areas for the ongoing hotel business development in Thailand. The majority of the new hotels are an expansion of the supply of 3-star and 4-star accommodation plus budget hotels.
As the supply of hotel accommodation has been and continues to keep pace with the number of tourists, a stiff level of competition has been a persistent feature of the industry. Additionally, alternatives services like apartments, condominiums and serviced apartments have entered the Thai market. Even though Airbnb has grown rapidly in the country, its impact on the Thai hotels has not been significant. However, there can be adrift in the situation too, but that is likely to be driven by the customer preferences that favor having a way more authentic local experience; for example, home-stays.
According to the Krungsri Research view, the outlook for the hotels and other accommodations situated in the tourist zones such as Bangkok, Pattaya, and Phuket is highly positive, particularly for the large operators. Well, this is largely supported by the forecast or expectation that Thailand will experience increasing numbers of travelers.
Coming to the hotels in the regional centers such as Songkhla, Suratthani, Chiang Mai, and Nakhon Ratchasima, the hotel operators will be benefitted from the developing economic connections and Eastern Economic Corridor that will eventually stimulate business travel. Moreover, investments made by the government on the infrastructure will further help in making travel between these regions more convenient as they are much dependent on the domestic tourism.
