Thailand’s political crisis, capped last month by a military coup, has sent tourists looking for alternatives such as southern neighbor Malaysia, with Bangkok hotel occupancies dropping to a four-year low.
The CHART OF THE DAY compares occupancy rates in Thailand, Malaysia and the Thai capital, where anti-government street protests starting in October culminated with a military putsch that ousted the government last month. The lower panel shows occupancy in Thai hotels below the year-earlier periods for the longest stretch since the global financial crisis in 2009.
About 56 percent of Bangkok’s rooms were filled in the first four months of 2014, compared with an average of 70 percent in the three years through 2013. Nationwide, the average rate so far in 2014 was 65 percent compared with 68 percent the prior three years, data compiled by Bloomberg show. Malaysia beat Thailand in February to April, the first three-month streak since 2011.
“Unrest and violence have severely affected bookings of most hotels, especially in Bangkok, where the protests have been centered,” said Kanyarat Krisnathevin, chief financial officer of Erawan Group Pcl, operator of Hyatt, Marriott and Holiday Inn hotels in Thailand. Erawan will “diversify risk” by expanding abroad, with focus on “countries with higher economic growth” including Malaysia, Philippines and Indonesia starting this year, Kanyarat said.
Thailand’s tourism revenue is estimated to be about a tenth of economic output, which shrank in the first quarter while Malaysia and Indonesia reported growth of more than 5 percent from a year earlier. Thailand’s woes have come amid seven months of demonstrations that left at least 28 people dead and culminated in a May 22 coup. The junta, which imposed curfews nationwide, yesterday removed restrictions in key resort areas such as Phuket, Pattaya and Koh Samui.
Once restrictions are lifted it “will still be a couple months before foreign tourists will have the confidence to return,” said Surapong Techaruvichit, president of the Thai Hotels Association. The equities gauge of hotel companies has plunged 11 percent since peaking Oct. 18, the most among the Stock Exchange of Thailand Index’s industry measures. Erawan, Central Plaza Hotel Pcl and Dusit Thani Pcl were among the decliners.
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