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Thailand: Samui Plus scheme sees lukewarm demand
The attempt to restart the battered tourism industry with the Samui Plus model which started on July 15, following the first-ever reopening plan under the Phuket sandbox, still has a long way to go to shore up the hotel business.
As of Aug 24, Samui Plus had welcomed 431 international travellers, of which 34 tourists continued their journey to Koh Phangan and 22 to Koh Tao.
In the first stage of reopening, more than half were those coming via the Phuket sandbox just before domestic flights operated by Bangkok Airways connecting the two islands were suspended on Aug 3, resuming on Wednesday.
The number of visitors to Samui Plus has yet to reach the goal of 1,000 because travellers have to cover medical fees and three swab tests which cost 15,000 baht per person, said Ruengnam Chaikwang, president of the Thai Hotels Association’s southern chapter for the east coast.
He said operators would like the Covid test price to be lower than 8,000 baht which could bring back competitiveness.
The stringent measures which require tourists to spend the first seven days in area quarantine (AQ) facilities in Koh Samui are another concern as most tourists demand quarantine-free travel.
Only 26% or 177 hotels with 8,629 rooms on the island can reopen for tourists, while the remaining 671 hotels with 25,000 rooms remain closed.
Prior to the outbreak, the island had 40,000 tourism workers under the social security system, most belonging to the hospitality business, but currently only 35% of them remain.
“Every hotel has to cut its workforce by half at a minimum,” Mr Ruengnam said. “Inactive hotels might hire only security guards to protect their properties, while the other staff returned to their hometowns.”
He said some hotels decided not to close as it will require costly maintenance to reopen. They hope that the 7+7 model will stimulate demand for Koh Samui after tourists spend seven days in the Phuket sandbox.
However, the hotel situation is still volatile as it is difficult to make any prediction on how many hotels will open and how many job positions will return in the last quarter because operators want to see how the 7+7 programme turns out.
IN DIRE NEED
“We need to see more consistent and growing demand over the coming months to ensure that hotel revenue can cover costs,” said Cindy Delhomel, general manager of Anantara Bophut and Avani+ Samui resorts under the Minor Hotels group.
Hotels on the island reported relatively weak to reasonable demand as occupancy for Avani+ Samui, which served as an AQ hotel, was 20%, while Anantara Bophut saw occupancy at low double-digits.
With the 7+7 island-hopping scheme, Ms Delhomel said it is difficult to wish for a significant change in demand as many restrictions remain in place.
Danny Sukomol, deputy managing director of Santhiya Resorts and Spas, said Scandinavian guests are interested in the 7+7 model, but the scheme may be of greater benefit to the Andaman islands, as September to December are the off-peak season for destinations along the Gulf of Thailand.
He said his hotel occupancy clung to single digits during the third wave, due to soft international demand despite the reopening plan, and a lack of domestic travellers.
Booking trends are expected to see a slight improvement to 10-20% in December in the best-case scenario.
Apart from the hotel in Koh Phangan, two hotels in Koh Yao Yai and Natai in Phangnga which joined the 7+7 model may see pent-up demand in the fourth quarter as forward bookings for October have already reached 30%.
“If businesses can lean on the 7+7 programme and domestic stimulus schemes, then the industry will survive and gain momentum for the first quarter of next year,” Mr Danny said.
VOLUME DRIVER
Independent hotels owned by locals facing liquidity woes are struggling to survive amid the tourism meltdown and might be replaced by international chains, said Vorasit Pongkumpunt, group vice-president of Nora Resorts and Hotels.
The group has four properties in Koh Samui, but only five-star Nora Buri Resort and Spa is open at the moment with a less than 5% occupancy rate.
Mr Vorasit said the hotel has to support jobs for employees which were cut to 130 from 500.
The reopening of the remaining hotels will not happen until demand from international and domestic markets improves.
He said the number of Covid-19 cases, particularly in Phuket and Koh Samui, has to flatten by September if the state is to lift travel restrictions and people can resume domestic trips. He said it might take until the second quarter next year during the Easter holidays to see the island bustling with tourists again.
The recent endorsement of Sputnik V vaccinations will help restore the Russian market which previously was the main source of overseas visitors. Their last trips were on March 21 last year.
The island welcomed 1,200-1,500 Russian tourists each month in 2019 with an average stay of 21 days, compared to European guests at 14 days and 3-5 days for Chinese.
“International arrivals from both Samui Plus model or the 7+7 extension plan are considered a drop in the ocean,” Mr Vorasit said. “Chartered flights are the sole solution to effectively support the overall economy in Koh Samui.”
Source: https://www.bangkokpost.com/business/2172119/samui-plus-scheme-sees-lukewarm-demand