It will come as no surprise to learn that the ongoing crisis in Bangkok is having a
significant negative impact on the city's hotel performance.
Daily
data compiled by STR Global shows the immediate impact while
monthly trend data shows a marked resilience by hoteliers in the
Thai capital during the last few years.
A dramatic decline in occupancy was
experienced across the city following several disturbance-related
fatalities during early April. After a slight rebound, occupancy
plummeted again as the foreign offices of several key Thai feeder
markets, such as Germany and the U.K., advised against all but
essential travel to the market.
With the safety of both guests and
staff in mind, some international hotels near areas of intense
violence closed and have yet to reopen. Quite astonishingly, the
Dusit Thani, which
is right in the heart of the action, directly on the front line, remained
open during all the recent violence, but has confirmed that it will today close after
guests and staff spent Sunday night in the basement.
These daily
performance fluctuations mirror the market's long-term monthly
occupancy trends. Declines in the metric began during 2006 at the
onset of military control and bounced around throughout 2007. The
2008 protests were more significant: Unrest during August result
in poor September occupancy levels; following the November airport
closures, December also suffered with occupancy of only 38.6%.
The latest protests are a real blow given that occupancy,
in the light of the improving global situation, had begun to trend
toward historic norms during the end of 2009 and into early 2010.
However, ADR has shown resilience in the face of both
fluctuating occupancy and broader ongoing difficulties in the
market. April's ADR of THB3,096 shows a less significant drop from
February (THB3,371)and March (THB3,331) than the declines in
occupancy, which fell 0.2 percent during April 2010 to 44%
compared to relatively strong showings during February (71.4%) and March (63.3%).
"In spite of violence
and significant recent declines in occupancy this past month,
Bangkok's hoteliers have held firm with rates, recognising that
price reductions do not stimulate demand that just isn't there,"
said Elizabeth Randall, managing director of STR Global.
"Discounting would only double the pain for hotels already
suffering from falling occupancies".
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April 2010,
Bangkok
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