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Hotels in Thailand Slam Governments Dual Pricing Scheme

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Hotels in Thailand Slam Governments Dual Pricing Scheme

Hotels in Thailand have slammed the government’s plan to create dual pricing for foreign tourists and locals.

Hoteliers say the move is “unrealistic” and have demanded the government instead roll out effective promotions to boost tourism sentiment in order to increase room rates.

According to Marisa Sukosol Nunbhakdi, president of the Thai Hotels Association, dual pricing is impractical because room rates fluctuate dynamically. Price setting strategies also differ among hotels in different tiers, she said.

Mrs. Marisa said that rates will automatically increase if demand increases to support hotel occupancy.

According to a government spokesperson on Wednesday, hotels will be required to implement dual-tariff structures in which foreign tourists will pay pre-pandemic rates while locals will receive discounted rates.

Heated competition among hotels

There is no doubt that every hotelier would like to operate with higher and fair rates in order to gain a larger margin. However, it is difficult to do so as a result of heated competition and oversupply. Hotels have to implement pricing strategies in order to gain cash flow,” said Mrs. Marisa.

She added that in addition to a tourism plan for the international market, the government could work with the Thai Chamber of Commerce to offer Thais special prices and increase domestic travel.

According to Suvunditkul, the president of the Thai Hotels Association’s southern chapter, hotels usually provide discounted rates for Thais and normal rates for foreigners. However, the demand is too low to raise rates to the levels seen in 2019.

Phuket’s room rates are still 30-40% lower than in 2019 and a full recovery is not anticipated in the upcoming high season, he said.

According to Mr. Suksit, half of the island’s hotels remain closed, and tourism has only rebounded to 30% of pre-Covid levels.

The hotel subsidy scheme must continue

In his opinion, the government should urge hotel operators to concentrate on the domestic market since increasing room rates may lead locals to travel abroad instead.

According to Mr. Suksit, the “We Travel Together” hotel subsidy scheme must continue until the end of the year to maintain the momentum of domestic tourism.

In response to the dual pricing proposal, Charintip Tiyaphorn, president of the Tourism Council of Krabi, said everyone should be treated equally and clear communication is crucial.

There have been at least a 50% reduction in room rates at Krabi hotels from last year.

Due to forward bookings from Scandinavian markets in December and domestic guests’ support, bookings are expected to reach pre-pandemic levels in the fourth quarter.

Phiphat Ratchakitprakarn, the tourism and sports minister has since backtracked on dual pricing. He said the government does not want a mandatory order regarding the matter but wants to encourage hotels to adjust room rates according to the market.

In order to avoid overpricing, support cash flow, and maintain the hotel’s service standards, the administration wants to avoid overpricing.