Despite a difficult two years, things are looking up for Thailand’s tourism industry. Long-standing travel warnings are still in place, but large-scale events are booked for 2011 and beyond. Bangkok Convention Centre is once again hosting events, Suvarnabhumi airport is set for expansion and hotel development continues. The current hotel room oversupply will take time to fill, but the industry is betting on Thailand’s reputation as one of the world’s most resilient destinations to see it through.
Capacity boom
There was a lot of hotel investment in Thailand before the financial crisis. As a result, hotels continue to open across the capital and in resort destinations like Hua Hin, Koh Samui and Phuket. The Starwood Hotel group has 15 hotels in Thailand with nine currently under construction.
“Many of the hotel projects opening in the next 18 months were planned and approved back in 2007 and 2008 when the political and economic circumstances in Thailand and globally were very different to today,” says Wayne Buckingham, regional vice-president, Thailand, Vietnam, Cambodia and Singapore, Starwood Hotels.
“Bangkok is a resilient destination, as is Thailand overall, and it tends to recover quickly. Unfortunately a lot of hotels are opening in the city at the same time and this will definitely have an impact on yields in the short term.”
Gaurav Bhushan, senior vice-president of development, Asia Pacific for Accor hotels, agrees. Accor is Thailand’s largest international hotel operator, with 43 hotels across eight brands and 15 new hotels due to open soon.
“Thailand still has enormous appeal despite the issues that have severely impacted the tourism industry over the past two years,” he says. “As a destination it is affordable, appealing and offers extraordinary diversity allowing event organisers to provide events with broad appeal.”
Future development
But will all these new rooms be filled with MICE groups? “MICE business is still a very lucrative market, but it has suffered dramatically because of the recent political issues,” says Buckingham.
“Demand will have built up over the last eight months with groups waiting for the right time to return. I think in future owners will build hotels with smaller numbers of rooms and more flexible meeting spaces.”
Bhushan says: “Bangkok remains the key entry point for travellers to Thailand and most visitors stop over on the way to other locations. The room night volumes in Bangkok reduced during the first half of 2010 and now they’re heading back towards normal levels. However, this volume is being soaked up by the additional supply coming online.”
Event wins
Bangkok International Trade and Exhibition Centre (Bitec) recently won its bid for the 26th International Congress of the Transplantation Society (ICTS), which will bring 5,000 delegates to Bangkok. Bitec also won its bid for the 5th Asian Federation of Lab Animal Science Associations (AFLAS) in 2012, bringing another 1,200 delegates to the city.
Bitec began its ICTS bid in March 2009, with the assistance of the Thailand Convention and Exhibition Bureau (TCEB). Sarnit Karunyavanij, business development director of Bitec, says: “We set up the bidding strategy with TCEB. Each party did the research and compilation for the bid documents and supporting materials.
“In the case of the ICTS 2016 bid, TCEB hosted the global society’s representatives when they visited for site inspections, and built a website for the ICTS 2016 Bangkok, which really helped with the bid. The convention team have been very helpful and professional and on the first presentation in Paris in August 2009, key TCEB officers were there to support the bid and provided video messages from the Prime Minister of Thailand.”
The bureau also recently announced the expansion and extension of its Believe in Thailand subvention campaign, which runs until the end of 2011.