The Thailand PATA Chapter regrets to observe that Royal Orchid Holidays (ROH), a division of THAI Airways International, has come up with a self-defeating tourism recovery strategy for Thailand – price reductions of 50%.
In addition, ROH expects hotels to sweeten the pot further with free dinners, cash vouchers and room upgrades.
Just a few weeks ago, the Thailand PATA Chapter expressed the fear that, once the latest crisis ended, some international wholesalers would use their position of power to pressure hotels and tour operators to lower contract rates by an unreasonable amount.
Putting Thai tourism product suppliers under revenue management and cash flow stress does not help Thailand’s tourism industry. It will only create more post-crisis challenges for tourism organizations that have already suffered low occupancy and demand due to the political crisis over the last eight weeks or so. Thailand already provides services at a much lower rate than most Asian countries. It is arguably the best value destination in Asia now – without price cutting.
It is easy to drop room rates by 50%. If we do, it may take up to four years to achieve the same average room rate as 2009/10. That would be a big step backwards.
The problem is not price. The problem is how to show travel buyers and consumers that Thailand is safe, stable and more welcoming than ever. We need a unified, consistent response, not knee-jerk price cutting.
The Thailand PATA Chapter recommends all national stakeholders to join the Tourism Authority of Thailand’s inclusive ‘welcome back’ campaign which is currently being created based on constructive ‘all for one, one for all’ principles.
Accepting ROH’s invitation will put unnecessary, untimely and unwelcome downward pressure on all other hotel rate structures in domestic, Asian and international markets.
History shows us that while brutal price cutting may offer some short-term relief, it creates artificial benchmarks that are used against Thailand’s hotels and tour operators in the medium and long term.
We, the PATA Chapter members in Thailand, kindly ask Royal Orchid Holidays – and any others considering a similar move – to quickly reconsider their demands and work with the hospitality industry to come up with alternative value added ideas.
The PATA Thailand Chapter trusts that PATA members around the world, and all buyers who claim to be supporters of Thailand, will show us their support by honouring existing contract rates.