Tourist numbers down in Hua Hin

[Nereus]

Hua Hin feels backlash from unrest:

The beach resort was far removed from any of the political violence, but its tourism industry has still taken a bit of a hit.

http://www.bangkokpost.com/business/tou ... rom-unrest

Hua Hin continues to have a special place in the hearts of Thai people, but the recent political turmoil has chipped away at the total number of visitors in the first half of this year, said Apisit Limlomwongse, managing director of Nexus Property Consultants.

Tourist arrivals to Hua Hin were down 10% year-on-year in the period to June, and research by Nexus points to a full-year decline of 13%. However, Hua Hin is better off than other popular beach destinations in Thailand because the total number of hotel rooms has increased more modestly, at around 10% a year, and is expected to reach 7,000 rooms by the end of this year.

"The limited supply of beachfront land plots at a developable size in the Hua Hin area has naturally helped prevent the oversupply of the hotel market," explained Mr Apisit.

"Consequently, Hua Hin is expected to be less vulnerable to the slowdown of the tourism market than other beachfront destinations. The outlook for the Hua Hin market is still promising as a result. It should gradually recover and return to its normal cycle in 2011."

Nevertheless, Hua Hin is feeling an impact from the slowdown. Mr Apisit says room and occupancy rates appear to be zig-zagging as they rose in 2009 after dipping in 2008 and would slide again this year. He said the main reason is the impact of the political unrest in Bangkok, since the majority of the visitors to Hua Hin come from the capital, while those going to, say, Phuket, can fly directly and bypass Bangkok.
Even so, the average room rate of four- to five-star hotels in Hua Hin is still far better than the room rate in Pattaya, where there are a lot more hotels and competition is fierce.

Research by Nexus also shows that Hua Hin attracted around one million visitors in 2009, a 9% increase over the previous year. This differs from other main beach destinations in Thailand, mainly Pattaya and Phuket, where the number of tourists dropped because the global economic recession had sharply reduced travel demand and spending.

"The key reason is probably that most of the visitors to Hua Hin over the past many years have been Thais," he said. "In Pattaya and Phuket, foreign visitors accounted for more than 70% of total tourist arrivals in 2009."

Hua Hin attracted more visitors last year while Pattaya and Phuket saw their totals plunge, but Mr Apisit explained that the overall tally still puts it in fifth place. In fact Pattaya came first with 3.5 million tourists, Phuket second with 2.7 million, Rayong a surprising third with 2 million vacationers, and Krabi fourth with 1.65 million.

"As Thais account for the majority of the tourists in Hua Hin, there is a large gap between the number of tourists during weekends and weekdays because Thai tourists usually only visit Hua Hin during weekends or holidays.

"As a result the average occupancy of all types of accommodation in Hua Hin during the past five years has fluctuated between 45% to 55%."

Asian tourists accounted for just over 7% of foreign arrivals in Hua Hin in 2009, while European tourists accounted for more than 75%.

Tourists from Sweden, England, Germany, Finland, Denmark, Norway and the Netherlands who visited this resort city last year collectively totalled more than 200,000.

"Unlike Thai tourists, foreign tourists tend to stay longer, especially senior foreigners who spend weeks or months there during their long vacations."

[sandman67]

If you set out to write an article on tourist numbers and the tourist situation, why ask a property developer his opinion? A less honest source you could wish to find.

Id like to read one that tells the truth occasionally:

Yeah Lek its like this. The insanely high baht value combined with continuing economic woes in the West, yo yo red-yellow political protests and long term politico-social instability has killed the property market stone dead. Literally bro we are flogging the proverbial dead horse. Actually bro if you have some spare dosh I have a lovely little recently deceased donkey with excellent development prospects going for a song. Only slightly flogged and skinned....no? Ah well.

Property prices have tumbled, and selling a property is now so rare we have a party whenever we get rid of one. Last time we sold one was two months ago. Get in the car chum and we can go on an afternoon drive round the outskirts of town and you can see all the half built wrecks scattered about and empty properties. Looks a bit like an Issan Granddads teeth. Its a laugh tho eh? Whats that? Slow down? Why? Theres nobody about - more tourists in Afghanistan than here bro! Phew....that Thaksin...what a bloke eh?

[Korkenzieher]

Tourists from Sweden, England, Germany, Finland, Denmark, Norway and the Netherlands who visited this resort city last year collectively totalled more than 200,000.

If you take that figure and do a rough calc of villas and farang level hotels and resorts, then I don't think it would be any surprise to discover average annualised occupancy rates in single digit territory. What amazes me is that some investment houses rate Thailand a buy. Can it really be that they just don't need the tourism industry? Don't believe that myself!

[margaretcarnes]

August and September are known to be the 'black' months for tourism in Thailand. Hopefully it will pick up before Christmas as it always does. But Khun Apisits' figure for the fluctuating occupancy rates - 45 to 55% - are exactly the figures we worked on over 10 years ago in HH.
So if his figures are correct, tourism must have increased significantly over the decade, as room numbers have also increased significantly.
Providing hotels and guest houses - usually Thai owned or mulitinationals - can survive on that pretty normal average occupancy that's fine. The problem for small farang owned businesses is to continue to attract tourists who would often rather stay close to their 'safe' hotels.

[Korkenzieher]

Margaret, I think it is pretty clear the numbers are way down on a decade ago. Not being in the industry, I couldn't say how that will play out in bulk occupancy rates, given increased build-out. Sure there will have been an increase in Thai tourism, perhaps a substantial one, but I really find the idea that cross-the-board tourism at places where your average imported 'high value' tourist stays (spas, resorts, international hotel chains) is anything like those figures, pretty hard to believe. I personally believe there is a political angle to the way these numbers are being reported by k.Apisit, but that is just my view.

[margaretcarnes]

It wouldn't surprise me at all to find there's a political angle Korkie! We expect nothing less these days. But if anything surely occupancy figures should be more accurate now than 10 years ago? Given the legal need for all hotels and guest houses to take copies of passports etc.....

Then again - I was never asked to provide occupancy figures anyway back then, and I'm sure the big hotels didn't always. Could have wrecked their tax returns.

[sandman67]

seems appropriate, and theres always space for a good toon

[margaretcarnes]

Very apt SM - but surely HH isn't on it's own - especially this time of year? I'm hearing from Pattaya that good rooms can be had for 350 bt and many bars are selling local brews for 39 bt. At least there they seem to be adapting to supply and demand

[OscarMike]

I have yet to see any price reductions or special offers in Hua hin - if anything things are going up! Phuket seems to be as busy as ever but that maybe due to the airport and the fact you can fly direct without setting foot in Bangkok.

[Spitfire]

I have yet to see any price reductions or special offers in Hua hin - if anything things are going up!

Ironically, that's a common Thai business practice. Less people spending/around so put the prices up to compensate. They haven't quite grasped the idea of cutting prices to move goods or fill rooms etc, not much initiative on that front.

[sandman67]

if anything things are going up

that MAY and I emphasise MAY have something to do with some of the booze suppliers hiking their prices - Mrs S just changed supplier for that very reason.

My suggestions for promotions, as always, fall on deaf non understanding ears. Mrs S just cant understand the charge less sell more equation. It took me a year to explain the salted nuts on the bar with a beer reasoning.

This low season isnt low....its flatlining.

[Korkenzieher]

HH is slightly more insulated than Pattaya and also to an extent Phuket, because it isn't exclusively foreign tourism. The higher incidence of internal Thai tourism in HH will underpin a certain level of business. Add to that the probability that a higher percentage of Farang in HH are long stayers and you could conclude there are certain segments of the local economy which are not doing too badly or at least as badly as the equivalent in those other places.

Business segments which are more dependant on the higher paying short-term tourist (Bintablock & the girls; Golf) are suffering from what I can tell. I can understand the bars holding prices at a certain level - dropping your prices only cannibalises your neighbours business and he also has his fixed cost base to worry about. It works only until there is a price war and then you all lose. The business I don't understand is the golf clubs. How, for example, Palm Hills justifies charging 2 to 3 times what Royal Ratchaburi does (a vastly better course, with the same costs of labour and infrastructure), is beyond me to understand in any case, but when numbers are through the floor - well, it looks more like a business suicide note than a business plan.

[johnnyk]

Putting prices up sounds strange but lowering them means its very hard to put them back up. And if everyone drops prices its a race to the bottom and all lose as Korkie said.
Falang bars have a hard time because of rents and key money extortion. Some Thai-owned bars may actually own their buildings or its in the family and likely have better rental terms than falang owners.
No basis for this, just something that occurs to me.

[PeteC]

TOURISM
New gauge better reflects industry's contribution

http://www.bangkokpost.com/business/tou ... ntribution

* Published: 27/08/2010 at 12:00 AM
* Newspaper section: Business

A new tourism gross domestic product index has been prepared to better reflect the industry's large contribution from goods and services in the overall economy.

"The tourism sector plays a vital role in the country's economy, but the industry for years has been without a compilation of national tourism income," said Thanittha Maneechote, deputy permanent secretary of the Tourism and Sports Ministry.

The National Economic and Social Development Board has compiled national income data for 16 sectors including agriculture, forestry, fisheries, industry and transport. It also includes hotels and restaurants as well as services. However, the tourism sector covers a broader scope of activities from hotels and restaurants to shopping, retail sales, transport and health services.

Tourism GDP generally measures the total market value of goods and services that are consumed by visitors, minus the cost of the inputs used in producing those goods and services.

The NESDB's tourism income study also covers food expenses for lodging, food and drink, guide services, entertainment, shopping, gifts and transport.

In 2009, tourism income both from foreign visitors and domestic travellers contributed 7.91%, equivalent to 715.98 billion baht of a gross domestic product worth a total of total 9.05 trillion.

When all factors are included, tourism income averaged 11,270.91 baht per head.

The southern region led the table with tourism income of 182.2 billion baht, reflecting large contributions from the islands of Phuket and Samui. The figure was 72.78 billion baht for the East, 58.83 billion for the North, 28.29 billion for the West, and 27.21 billion for the northeastern provinces.

The Central region excluding Bangkok generated the lowest income worth only 15.18 billion baht. Based on national income per head, the South again led with per capita income of 20,673.04 baht, followed by 15,969.63 baht in the East, 7,140 baht in the West, 4,998.83 in the North, 2,021.34 baht in the Central region and only 1,265.97 baht in the Northeast.

Based on provinces, Bangkok ranked first, generating 331.45 billion baht, followed by Phuket at 94 billion, Chon Buri at 47.82 billion, Chiang Mai at 32.6 billion and Krabi 20 billion baht.