A panel comprising Clarence Tan of SVP Development, Dilip Rajakarier of Minor Hotel Group, Peter Henley from ONYX, and Patrick Basset of Accor staged a quickfire discussion offering opinions and advice – beginning with the question of whether the uncertainty Thailand faces right now represents ‘the new normal’.
“We’ve never had a normal year,” pointed out Dilip. With military coups, political protests, the flood, the tsunami, SARS, bombs, and various financial crises, Thailand may appear cursed, but as Peter observed, “we know how to bounce back.” This natural resilience, however, must be backed up by tighter security arrangements and by industry participants working together to raise destination awareness and present a coherent common message.
“Asian market fundamentals are still strong, Thailand is the hub of Asia, and travelers today are much more resilient,” said Dilip. “Thailand has untapped destinations as well as mature markets, but TAT and the government must work to create the infrastructure,” he added, citing the success of Phuket with the Middle Eastern airlines.
Patrick was quick to concur on the need for infrastructure development, saying he expected arrivals to “hit 40-50 million in the coming years.” He also stressed the need for novelty and creativity, advocating the entrance of new brands and innovation from hotels in distribution areas such as “integrating tours to maximize revenue.”
With political and economic instability a constant threat, the panel also suggested that careful management of energy and human resources costs would be critical. Clarence pointed out the importance of “keeping the best people, and letting them grow their careers in this industry.”
The next question was the issue of winners and losers in 2016. Within Thailand, Clarence was particularly keen on the Eastern Seaboard, explaining that Rayong’s thriving car industry was driving development rather than the leisure sector, while Dilip drew attention to the potential of new destinations such as Si Kao near Krabi. The panel felt that midscale and boutique properties would thrive, with Dilip noting that “oversupply can easily kill the luxury sector – so it’s important to find a balance.” Patrick added that 5-star properties needed the MICE market, which in turn required political stability. Vietnam, Sri Lanka and Kalimantan were highlighted as likely regional success stories for the coming year, while the Golden Triangle and the Cambodian border offer opportunities for investors in Thailand.
On the downside, Pattaya and Hua Hin were seen as likely to struggle, with the weakness in the Russian market suggesting a tough year ahead for Pattaya especially, though Peter observed that “we’ve all been wrong about Pattaya in the past, and things do look better in the longer term.” Independent, luxury, and unbranded 2-3 star hotels were named as the most likely to find 2016 more challenging, but the greatest problems would be reserved for any hotel which failed to manage its online reputation effectively.
Despite the continued growth of Airbnb, the panel expected its impact to be minimal, citing its lower-end appeal, and the fact that customers can already find good value in Thailand’s hotels. China and ASEAN were expected to become the main source of visitors to Thailand in the near future.
In closing the session, predictions were sought on three key issues: stability (yes), the economy (flat), and the expected number of arrivals (up 5-14%). So where is Thailand going? Probably nowhere – in the most positive sense.