The cost of a holiday in popular beach resorts in #Thailand is now on par with or higher than those in Greece, Italy, Spain, Turkey, and Egypt, which are closer to home for #Europeans.
The cost of a five-star resort in Koh Samui, Koh Phangan and Koh Samed has reached around $500 per room per night including American breakfast.
This is similar to the cost of a five-star beach resort in Greece, Italy and Spain, and dearer than a comparable property in Turkey or Egypt, which costs $350 a night, according to Diethelm Travel Group.
It is even pricier than a mountain resort in Germany, Austria, and Switzerland, which is $450 a room in the summer July/August high season for Europeans.
Diethelm, one of Thailand’s oldest and largest inbound specialists, does regular price benchmarking and shares the latest figures with Skift.
Prices for four-star Thai beach hotels also show a similar pattern: They cost around $350, as do counterparts in Greece/Italy/Spain, and are higher than the $200 in Turkey/Egypt and $300 in Germany/Austria/Switzerland.
A Thai holiday pricing has increased by about 30 percent in U.S. dollar terms and 40 percent euros over the last five years due to the appreciation of the baht and inflation, Diethelm’s Group CEO Stephan Roemer pointed out.
“This is definitely too much,” said Roemer, who also owns Switzerland’s tour operating company Tourasia, which specializes in Asia holidays.
“Hotels at the well-known resort areas in Thailand are more expensive than comparable resorts in Europe. I fear a negative impact in the medium to longer term [six to 18 months) particularly for the leisure market to Thailand,” he said.
The baht has kept on strengthening since January, due to the country’s current account surplus with $1 fetching only 30 baht now compared to 36 baht before, and the industry fearing it’ll get worse.
“Although there are many talks to resolve the issue, the baht keeps strengthening, and this is a tough challenge for our tourism industry. I admit that it has a negative impact on our business.
I believe, although I do not want to, that the baht could reach below 30 baht to the US dollar,” said Danai Wansom, president and CEO of Well Hotels & Resorts Thailand.
DEEPER ISSUES
But the baht isn’t the only cause for concern. Despite its appreciation, many Thai hotels have raised rates as they can count on Asian first-timers and repeaters to continue to flock Thailand.
However, a guest mix heavily slanted towards Asia has become an issue for some upmarket European guests for whom Thailand also appears to be losing a bit of amazingness.
This is due to its political situation and overdevelopment, aside from the structural change in market mix.
“Some of the hotels have shifted their guest mix and sell a bigger percentage to the Chinese market. So the atmosphere in the hotel can change to the point where clients tell us they will not go back. This is a very important issue,” said Ruth Landolt, general manager of Asia365, a tour operating company based in Zurich that crafts tailor made tours to Asia for German-speaking markets.
“The destination that is getting a lot of business now is Vietnam,” she added. “We also have a lot of business to Japan, but this is a different market. Thailand is competing with Southern Europe, Egypt, Mexico, and the Caribbean or Indonesia.”
To David Kevan, a director at Chic Locations UK, the baht and Brexit are least of his concerns.
One reason is the tour operator has made a conscious effort to attract more clients within the 55 years plus age group that are less affected by Brexit or the baht, and less tied to rigid travel dates.
His top grouse with Thailand — and with neighboring destinations such as Vietnam and Cambodia — is overdevelopment.
Kevan foresees many hotels in Bangkok, Pattaya, Hua Hin, and Phuket, in particular, being turned into condos in the next few years due to oversupply and owners wanting a quick capital return.
In Vietnam, certain resort destinations are “unrecognizable” from five years ago, he said, while Sihanoukville in Cambodia “is just a disaster on every level unless your focus is solely on low-end Chinese sex and gambling tourism.”
Singapore is the only one that stands out in the region for proper planning and development, said Kevan.
“With Singapore, short-term thinking is the next 10 years, long term is 50 years. With virtually every other country in the region short term is yesterday and long term is tomorrow.” Skift.Com
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