HMSthailand.com

New Year , a new start, where will we go in the Hotel Business? Forecasting is much more difficult nowadays. Lowering demands will drive hoteliers to sell lower then they intend to do.  Revpar Guru believes that 2010 will show some recovery which is mainly driver by innovators willing to change their market perspective. We have to find more efficient ways to create the results we are looking for.

Looking at the results in the last quarter is not a real prediction of what will come ahead of us. The Phuket market of hotels experiencing the High and peak season in these months, and the battle starts after April when the low season is there again. We have to be cautious about our projections of this challenging year.

The return will happen slowly, we cannot expect that a market is only and purely driven by price, it is also the location. Many locations in the world nowadays are boosting their marketing budget to create awareness, which can result in less tourism for this year in Thailand.  Therefore we have to be careful with what we have and try get the most out of the market we have. Repeating clients are very important for your survival, once more.  This also counts for the faces of the resort, try to maintain those who have created recognition to your company and for which people will return.

Lowering the staffing costs, it will create room for efficient systems to do their job. The hotel industry is a mainly service orientated and people orientated business.  Specific adjustments in your system needs, or software upgrades, makes your business run far more efficient and hence, improve your revpar on short term and long term. Automation in order to push your revpar seems to be far most interesting then investing in advanced cash register system which doesn’t contribute to your revpar.

In the 2009 we have sliced the rates in half and offered tremendous discounts in order to maintain a healthy occupancy. Most businesses sliced their revpar with double digit numbers. In 2010 we need to preserve a healthy Revpar growth while the occupancies seems to get back in return.

As said earlier investments must be made which contribute on Revpar in order to justify future investments of the Capex budgetplan. The life line to success is to listen to your customers needs. Improvements need to be made in a cautious way while will creates incremental revenue in 2 to 5 years time.

With  an overwhelming growth factor in 2008 and early 2009, Phuket has seen a rapid increase of hotel rooms. This supply, or rather over supply, creates a disturbed market situation, where arrivals haven’t climbed that steep.  This trend will slow down in 2010 as many projects facing financial stress to complete their projects in their proposed time frame.  The competition will be in 2010 still fierce and hard to tackle as every property has their investors to please.

These effects as mentioned above creates a fierce market situation with continuous rate changes due to the OTA market presence. Changing the rates to too low rates can end up leaving money on the table. Intelligent systems which monitor the market and its supply, as well as your own supply, can manage this for you.  In real time, this system can adjust  allotments and prices to optimize your occupancy and Revpar levels. To survive nowadays market in 2010, technology is the way to control your revenue.

Despite the economic downturn, hotel operators are still continue to open new hotels in the Asian Region. Although some markets can see a decline of Occupancy levels since beginning of this year, the Hong Kong market can see two newly opened hotels in the last month of October. The Hyatt  Regency, a 381-room hotel on top of a shopping mall in the Kowloon district and the Upper House a 117-room hotel within walking distance of the central business district on Hong Kong Island.

Many of the projects were on going before the economic crisis, hence the actual result for development can be seen later in 2 year terms from now.

The big corporate brands are still in line to open up hotels in the region.  Starwood just opened its 150th hotel in the region and Accor is opening 54 hotels only this year in Asia. Amari, the Thai branded Hotel chain, currently with 18 hotels under its wings, is planning to add another 40 hotels by 2018.

Besides the economic downturn, Thailand is also facing a possible political crisis. The current pressure on the government by Cambodia, by assigning Taksin Shiniwatra as their economic adviser.  This will not harm tourism in the direct way, but slow down future foreign investment. Political instability has given more unrest for the foreign business which own or invested in Thailand. Tourism is rather neutral and still visiting the region.

Earlier reports show that the amount of arrivals for 2009, might well meet the target of 14 Million foreign visits this year, despite the crisis and the political turmoil.  Other reports indicate that the overall business dropped with 28.4 percent (source: The International Herald Tribune, November 11, 2009) forcing the hotels to heavily discount in order to attract more business. Economist believe that the Economic crisis is not over yet. The US market which is seen as the indicator for the business here in Asia, is showing no strong recovery.

Other reports by the World Bank indicate that America should not be used as the only indicator, as the power of China and India is much more bigger. It is a fact that it will take a long time, but here in Asia they are rather optimistic about the next year. Asia is the place to be and where it will happen. Looking at the numbers, US has a population of 300 Milion and serving 4.9 million hotel rooms. (1.6% of the total population which can get a room).  China, where is the current growth in the overall market have a population of 1.3 billion and only 0.13%, can be served with a hotel room. India has almost 120,000 rooms accounted for in the whole country. It is therefore to say that with the future econmic growth and the current population, their is allot of business to make in these countries.