Thailand: Hoteliers deride government proposal for dual pricing
Hoteliers have expressed concerns about the government’s plan to set dual pricing for foreign tourists and locals, saying the move is “impractical” and demanding the administration roll out effective promotions to spur tourism sentiment in an effort to increase room rates.
The idea of dual pricing is impractical as room rates shift dynamically based on market conditions, said Marisa Sukosol Nunbhakdi, president of the Thai Hotels Association. Hotels in each tier also use different strategies to set prices, she said.
If demand increases to support hotel occupancy, then the rates will automatically increase, said Mrs Marisa.
On Wednesday, a government spokesperson said hoteliers will be asked to implement a dual-tariff structure under which foreign tourists will be charged pre-pandemic prices, while discounted rates are maintained for locals.
“Every hotelier would like to operate with higher and fair rates to gain a larger margin, but it is difficult to do so because of heated competition and oversupply. Operators have to use pricing strategy to gain cash flow,” said Mrs Marisa.
In addition to a tourism plan for the international market, the government can jointly conduct domestic campaigns with the association to offer special prices for Thais and increase domestic trips, she said.
Suksit Suvunditkul, president of the Thai Hotels Association’s southern chapter, said it is common for hotels to offer discounted rates for Thai residents and normal rates for foreign visitors, but hoteliers cannot raise the prices to levels tallied in 2019 because demand is too weak.
The current room rates in Phuket are still 30-40% lower than rates in 2019 and a full recovery is not expected in the upcoming high season, he said.
Half of the hotels on the island remain closed, while the volume of tourists has rebounded to only 30% of the pre-Covid level, said Mr Suksit.
He said the government should urge hotel operators to focus on the domestic market as an increase in room rates could drive locals to travel overseas instead.
The “We Travel Together” hotel subsidy scheme needs to continue until the end of the year to maintain domestic tourism momentum, said Mr Suksit.
Responding to the dual pricing proposal, Charintip Tiyaphorn, president of the Tourism Council of Krabi, said this sensitive issue could create a negative tourism image because everyone needs to be treated equally and clear communication is essential.
Krabi hotels have slashed room rates by at least 50% from levels in 2019.
Bookings are expected to reach pre-pandemic levels in the fourth quarter thanks to forward bookings from the Scandinavian market in December and support from domestic guests, she said.
Phiphat Ratchakitprakarn, the tourism and sports minister, said the government did not give a mandatory order about the issue, but wants to encourage hotels to shift room rates based on the market. The administration wants to avoid overpricing, support cash flow and maintain the service standards of hotels.