Thai companies still upbeat on expansion
Thai hotel companies are to forge ahead with their expansion plans as they remain unfazed by mainland China’s real estate slump, though purchasing power must be monitored for any declines, according to Dusit International.
Dusit group chief executive Suphajee Suthumpun said the company’s joint venture partners in Dusit Fudu — the company Dusit uses for its hotel expansion in China — remain focused on hotel development rather than real estate, unlike Evergrande and Country Garden which are currently facing a financial meltdown.
The real estate sector should not impact Dusit’s investment in two new hotels in China this year, said Mrs Suphajee.
However, the company will continue to follow the situation in terms of any possible impact on general tourism spending as the real estate slump would have consequences in terms of consumption in China.
At present, the firm still has a healthy occupancy rate in China of around 60-70%, similar to the level recorded prior to the pandemic, thanks to Beijing’s focus on domestic tourism.
Along with the two hotels Dusit has invested in this year, the company will have 13 hotels in China within 2023, with another 20 in the pipeline.
While Pheu Thai Party’s Srettha Thavisin was endorsed to become Thailand’s new prime minister this week, Mrs Suphajee said increasing the daily minimum wage to 600 baht is a good policy.
However, hotels hope the government would gradually increase the daily minimum wage on a step-by-step basis or provide support to operators through other forms of incentive, such as helping them with training and upskilling programmes.
It should also focus on strengthening the tourism industry through the provision of high quality services and valuable experiences, thereby attracting tourists by using other means.
These would include promoting tourism in secondary cities, health and medical tourism and welcoming digital nomads.
Speaking at the Thai Hotels Association’s (THA) monthly meeting, Mrs Suphajee said that since sustainability is a significant global trend, the new government should incentivise operators by reducing tax for those who have converted their appliances to run on clean energy.
Meanwhile, Minor International Plc also reported that its global investments, including in China, will continue to go ahead as planned.
Marisa Sukosol Nunbhakdi, president of the THA, said the new cabinet is expected to be finalised soon following the appointment of the new prime minister.
She said this is an appropriate time as the tourism industry is anticipating measures to be drawn up to help boost the market within this year.
However, she said the upcoming high season wouldn’t be as positive as predicted earlier, given that many hotels still lack tour groups.
Most hotels categorised as four star or below remain concerned about labour shortages.
With the government planning to raise the daily minimum wage, many hotels are not ready to cope with surging costs due to high competition during the recovery period as they are still struggling to generate a profit.
