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Asia300

Hotels offer huge discounts in high season

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A security guard checks on a taxi entering a hotel building after Monday's deadly blast in central Bangkok. The incident is seen weighing on tourist sentiment, Aug. 20, 2015.   © Reuters

BANGKOK -- Even though August is one of the high seasons for tourism, some top hotels in Bangkok are offering huge discounts on their rooms over heightened concerns that the fatal blast in Erawan Shrine will deal a blow to the travel industry.

     In a sign that the hospitality industry in one of the most popular destination cities in the world may already be feeling the pinch, emails headlined "Are you interested in bargain-priced hotel rooms in Bangkok?" are being sent out to customers.

     Some Hong Kong-based Agoda users are receiving such messages in Chinese. The Singapore-based online travel agency usually dispatches such email messages to promote reasonable rooms in cities that their registered clients have visited in the past. However, since the bombing on the evening of Aug. 17, users who have never reserved rooms in Bangkok are getting these messages.

Berkeley Hotel Pratunam, in central Bangkok, is offering over a 50% discount, according to online travel agency Agoda. (Photo by Kenji Kawase)

     In the most recent message dated Aug. 20, four hotels in central Bangkok were on offer. For instance, the rate indicated for the Berkeley Hotel Pratunam was 499 Hong Kong dollars ($64.4) a night, representing what Agoda said was a 52% discount. The overnight room rate for Lebua at State Tower, close to the bomb site at the Chao Phraya River, was offered at an even better discount of 66% at 797 Hong Kong dollars. Both of these are five-star hotels in the city center.

     Hong Kong is the one of the most important sources of international visitors to Bangkok, according to a MasterCard survey. Nearly 1.5 million visitors from Hong Kong are expected to visit Bangkok and spend a total of over $1 billion in 2015.

     Even though the number of visitors from Hong Kong in the first half of the year was only about 337,000 or 2.3% of the total, according to Thai government statistics, a substantial number of mainland Chinese - who account for 27% of arrivals and the biggest source by country - arrive from Hong Kong.

     The bad news is that the Hong Kong government has issued a red travel alert to Bangkok, its second-highest warning, cautioning its residents about "significant threats," immediately following the Monday blast.

Thai policemen patrol a tourist haunt in central Bangkok, Aug. 20. (Photo by Yumi Kotani)

     The territory's government has urged its residents to "adjust their travel plans and avoid non-essential travel, including leisure travel," as four Hong Kongers were either killed or injured in the incident. The Chinese government has not yet released a similar alert to Hong Kong's, but the China National Tourism Administration is now requiring "travel agents to alert tour leaders in Thailand." There were at least 30 Chinese casualties, including four deaths, on Monday.

     The MasterCard survey ranks Bangkok as the second most popular destination city with annual international visitors of 18.24 million, after London's 18.82 million and ahead of Paris's 16.06 million. However, while London and Paris rely on visitors from 25 to 26 cities to make up the top 50% of total arrivals, Bangkok depends on only 13 cities. That shows that Hong Kong is much more important to Bangkok than New York is to London and London to Paris, their respective top feeder cities.

     Apichart Sankary, former president of the Association of Thai Travel Agents, told the Nikkei Asian Review on Thursday that "some of the five-star hotels near the Ratchaprasong area [where the Erawan Shrine is located] have cancellations as high as 20%" following the blast. He, like many of his peers in the hotel industry, hopes the impact is "short term."

     That is if the incident turned out to be a one-off, but as uncertainty looms, "the bombings in Thailand's capital present a new downside risk to the country's economic outlook," noted Krystal Tan and Mark Williams, Asia economists at Capital Economics, in their Aug. 19 report. "Not only are the attacks a blow to the important tourism sector, they also add to concerns about political stability."

     The benchmark SET Index on Aug. 20 dropped 6.59 point, or 0.5%, to close at 1,372.53, hitting a new low since the pre-coup level last March. Foreign investors continued to move their funds from the stock market, as the value of net selling amounted to 4.7 billion baht ($132 million). In the three trading days following the blast, shares in major companies related to tourism, such as Minor International, Airports of Thailand, and Thai Airways International have lost between 2 and 7%.

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