Tourism businesses may recover after the COVID-19 virus outbreak in Thailand and many foreign tourists still see Thailand as a country that is still worth visiting
The tourism industry with mainly the hotel industry, is considered one of the real estate markets that have been most affected by the outbreak of the COVID-19 virus that has spread heavily in China and many other countries around the world including Thailand. Due to the sluggishness of the tourism business sector especially the foreign tourist market that has contracted because of the epidemic crisis causing a decrease in the demand for hotel room in Thailand. And it also affects revenue from venue services for parties and conferences.
The developers postponed all activities during this period. Research and Communication Department from Colliers International Thailand forecasted that the impact will be more severe in the period during March – June 2020, which will result in the booking of the room including the room revenue in 1H 2020.
The occupancy is expected to decrease by more than 50%. The situation has a high impact on the hotel business, both small and large hotels, as the developers have to bear with the relatively high fixed operating costs.
The Research and Communication Department from Colliers International Thailand recommended that hotel operators should focus on managing cost reduction to a minimum during this period in order to sustain the business to continue to be able to operate.
If income operators are unable to adjust themselves in time, it may result in closing down the business and the main situation of the spread of the COVID-19 virus in Thailand tends to continuously spread. The main tourist target in Thailand is from China. The positive sign is that Chinese airlines have started to contact to fly back to Thailand in May. However, the government, including developers is necessary to have a good preparation strategy for tourists coming in after the situation has improved. The developers themselves must accelerate adaptation by paying attention to sanitation, including screening and care measures for the health of tourists traveling in including personnel preparation and operations after the business resumed service in order to prevent the spread of the COVID-19 virus to become more severe.Although the number of foreign tourists visiting Thailand in 2019 was slightly lower than the forecast of the Tourism Council of Thailand, which the estimation was around 40.14 million people but the actual number of tourism in 2019 was around 39.80 million tourists. This increased by 3.97% y-o-y and generated revenue from foreign tourists at a total of THB2.02 trillion, slightly increased from the previous year. In 2020, it is expected to be a very challenging and difficult year for the tourism sector in Thailand. This is due to various negative factors, especially the situation of the COVID-19 virus that has spread heavily in many countries around the world including Thailand. It has caused the tourism to have a tendency to grow much lower than expected. In addition, various negative factors that is expected to affect the tourism sector in 2020, such as the appreciation of the Baht Restrictions on support of major Thai airports. Research and Communication Department of Colliers International Thailand expected that by 2020, Thailand may have total tourism revenue of around THB1.40 trillion, a decrease of around THB600 billion or 30.7% y-o-y and approximately of 28 million foreign tourists only.
For the number of foreign tourists arriving in Thailand classified monthly as of March 2020. it was found that during March 2020, when the COVID-19 virus epidemic hit both Thailand and the world. It was found that only 819,429 million foreign tourists entered Thailand, resulting in the number of foreign tourists entering Thailand in Q1 2020, leaving only 6,691,574 people, out of 10,795,246 million people adjusted down up to 38.01% y-o-y. This is resulting in tourism revenue in Q1 2020 to decrease to approximately THB515,327.58 million. The income from foreign tourists decreased by 40.39%, which was only for Chinese tourists, the main market of tourism in Thailand, dropped to 94.23%. In March, only 56,852 Chinese tourists arrived in Thailand. The Research and Communications Department of Colliers International Thailand predicted that in 2020, if the population from China is slowing out of the country by 2020, which the number of Chinese tourists visiting Thailand in 2019 was approximately 11 million people, generating a revenue of THB5.5 billion. Research and Communication from Colliers International Thailand expected that this will cause Thailand to lose more than THB300 billion of revenue.For the overview of the world economy, it is still considered to be in a very slowdown period. It has caused the people to be more cautious in spending. Also, the Thai baht became strongest in the region causing the money that foreign tourists used to exchange to spend in Thailand to appreciate, resulting in the exchange of baht to reduce immediately by 10-20%. Visiting Thailand is therefore more expensive in the perspective of foreigners. While the overall domestic travel of Thailand grew by 1%, with more people choosing to travel to secondary cities instead and generating an additional 3% of income from tourism promotion strategies such as ‘Chim- Shop-Chai’ strategy by the government, and 100 Baht tourism promotion measures throughout Thailand.
Average occupancy rate for hotels in Thailand classified monthly as of March 2020
The nationwide occupancy rate in Q1 2020 has decreased to 51.50% from 78.62%, which was a decrease of 27.11% q-o-q, although it was considered the high season in Thailand. Especially during March this year, the average occupancy rate nationwide fell to 20.82%, a drop of up to 54.01% y-o-y due to the shutdown of the hotel businesses that were unable to bear the cost burden from the COVID-19 virus spreading crisis, including the announcement of an Emergency Decree (Emergency Act) since 26 March 2020 onwards. The hotel business is one of the industries that generate a lot of income for Thailand which accounts for over 28% of the total cost of tourists from the total income from tourism last year up to more than THB2.02 trillion even though there are various negative factors that affect the tourism business, especially the Thai Baht appreciation for about 7%, which many parties concerned especially in the tourism and export sectors. However in 2019, the number of tourists and income from Thai tourism continued to grow, even though it was slightly lower than expected.
The Research department from Colliers International Thailand expected that the average occupancy rate of hotels of all grades in 2020, to decrease by about 40% y-o-y because of the global economy and the Thai economy that has slowed down. Also, the value of Thai Baht that has strengthened and the situation of the COVID-19 virus that has spread heavily in many countries around the world, these were considered a negative factor that will affect the tourism business in Thailand this year.
From the situation of controlling the outbreak of the COVID-19 virus in Thailand that has quite received compliments from many other countries that there was a response to the epidemic, including strategies to take care of those infected with the virus. From the perspective of foreign countries, Thailand is still safe for them and is still worth visiting if the situation improves. Chinese tourists have become the main target of the tourism market in Thailand.
Average occupancy rate for hotels in Thailand classified
monthly as of March 2020
The nationwide occupancy rate in Q1 2020 has decreased to 51.50% from 78.62%, which was a decrease of 27.11% q-o-q, although it was considered the high season in Thailand. Especially during March this year, the average occupancy rate nationwide fell to 20.82%, a drop of up to 54.01% y-o-y due to the shutdown of the hotel businesses that were unable to bear the cost burden from the COVID-19 virus spreading crisis, including the announcement of an Emergency Decree (Emergency Act) since 26 March 2020 onwards. The hotel business is one of the industries that generate a lot of income for Thailand which accounts for over 28% of the total cost of tourists from the total income from tourism last year up to more than THB2.02 trillion even though there are various negative factors that affect the tourism business, especially the Thai Baht appreciation for about 7%, which
many parties concerned especially in the tourism and export sectors. However in 2019, the number of tourists and income from Thai tourism continued to grow, even though it was slightly lower than expected.
The Research department from Colliers International Thailand expected that the average occupancy rate of hotels of all grades in 2020, to decrease by about 40% y-o-y because of the global economy and the Thai economy that has slowed down. Also, the value of Thai Baht that has strengthened and the situation of the COVID-19 virus that has spread heavily in many countries around the world, these were considered a negative factor that will affect the tourism business in Thailand this year.
From the situation of controlling the outbreak of the COVID-19 virus in Thailand that has quite received compliments from many other countries that there was a response to the epidemic, including strategies to take care of those infected with the virus. From the perspective of foreign countries, Thailand is still safe for them and is still worth visiting if the situation improves. Chinese tourists have become the main target of the tourism market in Thailand.
From the standard controlling of the spread of the COVID-19 virus in Thailand has built a positive factor for those tourists to gain confidence and see Thailand as a destination country after the end of the COVID-19 virus outbreak, including tourists in the country that were unable to travel after the announcement of the government service administration in the situation Emergency (Emergency Act) of the government. As a result, people have prepared their travel plans for relaxation after the quarantine if the situation improves. By that time, the government should enact strategies to stimulate the tourism sector, both domestic and foreign tourists to travel to Thailand in order to encourage both foreign tourists and people in the country to feel the desire to travel into the country. This includes the hotel business to rejuvenate in the second half of this year.
