Baht may deter rise in Samui room rates
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Lower-end hotels on Samui Island may feel annoyed by the baht's appreciation because they cannot raise their room rates, though fancier hotels will charge more.
“I hope the uptrend in the baht will not keep going on too long,” Tanongsak Somwong, president of the Tourism Association of Koh Samui, said yesterday.
Four- and five-star hotels plan to hike rates by 8-12 per cent this year to cover rising costs, mainly driven by the higher minimum wage. That means the resort island may lose its competitiveness in the market, he said.
The four- and five-star hotels are selling rooms for Bt4,500-Bt7,500, while tourists are facing less purchasing power after their currencies are converted into baht.
Room rates on the island have remained flat for several years because operators worry about problems if they raise rates at a time when the United States and Europe are in financial trouble, resulting in fewer tourist arrivals.
The island has a stock of 16,000-18,000 guest rooms.
The association, comprising 260 members from hotels, resorts and restaurants, will monitor more closely the baht’s movements. However, business remains good and there are no ominous signs yet.
In the first quarter of this year, occupancy was up 10 percentage points to 85-90 per cent from a year ago. For the whole year, the outlook is optimistic as long as no serious situations like political chaos emerge. The stronger baht is considered one of the risks.
The island’s infrastructure is ready to serve the growth in visitors, especially electricity supply, which returned to normal recently. Last December, the island was hit by a blackout for a few days.
As a safety measure, the island is working with Surat Thani province to set up a committee by June to oversee this specific task.
According to consulting firm C Hotelworks, based in Phuket, Samui’s occupancy rate averaged 68 per cent last year. The top three source markets were Germany, Britain and Thailand. Russia and the Middle East are emerging markets for the island.
Rates for 2014 will start in November.
