Published on: Wednesday April 27, 2022

Thai hotels are spending big on upgrades and new resorts despite the fallout from war in Ukraine, making global tourism unlikely to recover from its COVID-triggered slump this year, analysts say.

They have set aside billions of dollars to increase the number of rooms in famous beach towns and trendy mountainous regions, in Thailand and elsewhere, as they pin their hopes on the hotel industry defying analysts and starting a rebound progressive this year.

Central Group, a Thai retail and accommodation giant, has earmarked 20 billion baht ($588 million) for investment over the next five years.

The company, which operates hotels and resorts under the Centara brand, aims to have 200 hotels at home and abroad by 2026, up from 88 currently.

On Friday, the company announced that it has teamed up with Austrian real estate company Signa to develop a 58,000 square meter mixed-use project in Vienna that is expected to open in 2023.

Central also plans to open its first hotel in the Japanese city of Osaka, the gateway to the tourist hotspots of Kyoto, Nara and Hiroshima. Its opening is scheduled for July 2023.

In 2019, the group reopened a luxury department store in Turin, Italy, which expects demand to pick up over the next few years as international tourism returns to normal.

Central Group CEO Tos Chirathivat said revenue from overseas operations is expected to increase significantly over the next five years with new projects underway. He also added that revenue from overseas operations, mainly in Vietnam, Europe and the Maldives, contributed about 30 percent of total annual revenue in 2021.

At home, Centara has new luxury hotels planned for the famous island of Samui, the Isan towns of Ubon Ratchathani and Nakhon Ratchasima as well as Bangkok; they are scheduled to open next year and in 2024.

Minor International, another leading Thai hotel operator, has earmarked 6.4 billion baht to be used this year to improve its domestic offering and invest in new properties overseas.

In 2022, the company announced that it would accelerate its plans to open and operate 100 new hotels in China to diversify its sources of growth. He also said he expected a rebound in global tourism to generate a net profit this year. Last year it lost 9.3 billion baht.

Additionally, it said it plans to shift from investing in and building its own hotels to taking on contract operations and licensing its brands.

Chaiyapat Paitoon, Minor’s vice president of strategic planning, said earlier this year that the company expected tourism to start returning to where it was before 2020, when COVID began its global spread.

He also expects business performance to gradually improve, particularly in Thailand, where the government last week announced it would make it easier for foreign tourists to visit and move freely upon arrival.

From Friday, vaccinated international arrivals will not have to take and pass a PCR test or remain in quarantine upon arrival in the country. They also won’t have to show proof that they are COVID-free before boarding their plane to Thailand.

The move to make it easier for vaccinated tourists to enter the country makes it more vulnerable to disease outbreaks, but analysts say easing entry procedures is unlikely to help the country’s important hospitality industry recover quickly .

They point to skyrocketing fuel prices and other consequences of Russia’s war in Ukraine that are keeping potential travelers home.

The United Nations World Tourism Organization agrees. He says the war is hurting confidence in the sector and could slow its recovery despite moves to ease travel restrictions.

According to the latest UNWTO forecast, the war will knock $14 billion off global tourism revenue for 2022.

TMBThanachart Bank’s ttb analysis says the relaxed entry rules will help Thailand attract only a “limited” number of international arrivals this year.

The Chinese have not yet come as China is still grappling with new rounds of the pandemic.

Chinese made up about 30% of the 39 million international tourists who visited Thailand in 2019.

Ttb analytics expects about 3 million foreign tourists to come to Thailand this year. It also forecasts an average hotel occupancy rate of 23.8%, compared to 19.8% in 2021. The average occupancy rate for 2019 was 80%.

The think tank’s estimate of foreign arrivals is much lower than that of the Tourism Authority of Thailand. The TAT expects 5.6 million foreign tourists this year; he also sees them generating around 1 trillion baht in revenue.

A recovery in tourism is crucial for Thailand, as the sector and related trade contributed around 20% of the country’s gross domestic product before the pandemic.

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Tags: COVID-19 Pandemic, Tourism Authority of Thailand (TAT), United Nations World Tourism Organization (UNWTO)