THA to hotels : “Don’t lower your prices, you’d risk to attract more customers”

Hotels and tour operators have been urged not to offer extra-low room rates and low-priced package tours to foreign agents, because of the possibility of long-term damage to the tourist industry.

Thai Hotels Association (THA) president Prakit Chinamourphong said average hotel-room rates in Bangkok were already lower than those in other major cities in the region. […]

“What we’re considering is how we can prevent hotels and tour operators from offering foreigners further discounts.

They should be trying other strategies instead of cutting prices,” Prakit said, adding that cutting prices would not help operators to survive in the long term and would also damage the overall tourism industry.

A recent report on the Phuket hotel market prepared by local consultancy C9 Hotelworks said discounting by Phuket hotels cost the industry on the island US$300 million (Bt9.92 billion) in room revenue last year. (Nation)

How on earth people can be so blind ? So utterly and convincingly dumb ? Even by thai standards, Prakit is breaking the sound barrier of dirt stupidity.

This man basically is saying : “don’t lower your prices too much… you would risk to attract more customers”.

This man doesn’t understand that hotels are not lowering their rates for pleasure… but because of a very challenging environment !
-a freaking global crisis
-higher competition (tourism is a global market and supply is increasing while demand is shrinking)

Lower solvent demand + higher supply= prices going down.

This rule is so obvious. But still, Prakit doesn’t get it.

Prakit thinks that he’s leading… a cartel. Well, we all know that thai business operators hate competition (tik mak ! too much work !)… But tourism is a global market. Even in Thailand, the smartest and the strongest will reduce their prices. Because they have no choice.

Prakit, being a perfect thai, would like the hotels… instead to increase their prices ! It’s a good old trick business love to do here. Zero imagination. Zero knowledge. Zero talent. Little people mafia-minded. Little crooks.

We are going to rephrase for Prakit : you can say whatever you want, if you continue to build 5 stars “spa” hotels accross Thailand, and if the global crisis continues to deepen then prices will go down. Because all the hotels in the world will compete for less and less tourists.

Lowering prices is only one further step… toward bankruptcy. But it allows a few to survive, while the sheeps, the weakest are slaughtered.

It’s called natural selection. And it’s’ a very healthy mechanism in any free market.

Overcapacity must be destroyed.

And It will.

People like Prakit, like all his westerns peers (AKA the clowns : Bernanke, Trichet, Geitner, Obama, Sarkozy etc.), live in a Lalaland where banks, businesses (and banks and businesses preferably owned by friends of course) are always growing, never failing.

Tourism : international arrivals down by 30 %… and counting

The Association of Thai Travel Agents (ATTA) projects international tourist arrivals to Thailand through its members will decrease by 38% to 1.5 million this year due to the persistence of global economic problems and local political instability. […]

In the first 10 months of this year, ATTA reported tourist arrivals through its members dropped by 30% year-on-year to 1.257 million. The lowest point was October with only 89,388. (Bangkok Post)

The figures are adamant. What is more funny are the explanations… 😉

“Initially, we expected October arrivals of 140,000, slightly lower than last year’s 143,746, but the strike by railway workers caused many rail-based tour groups, especially those from Malaysia and Singapore, to cancel their trips,” he said.

The incident also affected European visitors who bought rail packages, as they simply moved to other countries.

Mr Surapol added that the greatest plunge in visitors came from South Korea, whose arrivals dropped by 56.5% to 70,526, followed by Japan, off by 38.4% to 135,202, and Finland, down by 37.9% to 8,095.

Do you know a lot of european tourists buying “rail packages” to visit Thailand from another country (we are talking here about international arrivals)… ?

Anyway, let’s be serious. The Green Shoots Mania hasn’t “touched” the masses of international travelers. Obviously.

The party is over. They need money to pay back the banks bailouts, to pay for the insane keynesian policies of all the government in the world, many lost their job, their house, and they are burried under debts (public and private)… so they have less money for the bagatelle, AKA some holidays in Thailand to get their skin burned by the tropical sun, eventhough they love it.

And ask yourself : will they have a higher income tomorrow compared to today ? And compared to yesterday ? It’s all about income, AKA solvent demand.

This a basic principle that the clowns don’t want to understand. Income. Income. Solvent demand. Jobs. And debts.

A “jobless recovery” like they say is nothing more than a pathetic oxymoron. There is no sustainable recovery, only a statistical fart as far as GDP is concerned, and a propaganda fantasia sold by corrupted politicians, totally burned out, scared of their own shadow.

And there won’t be any recovery, while developed economies are still destroying jobs.

Air traffic crashes in the US… and tourism crashes in Thailand : everything is linked

Another Green Shoot in the US…

The Air Transport Association of America (ATA), the industry trade organization for the leading U.S. airlines, today reported that passenger revenue, based on a sample group of carriers, fell 21 percent in August 2009 versus the same month in 2008 – the 10th consecutive month in which passenger revenue has declined from the prior year.

Six percent fewer passengers traveled on U.S. airlines in August while the average price to fly one mile fell 17 percent, a slight improvement over the 18 percent year-over-year yield decline observed in July. Revenue declines extended beyond the domestic United States to the trans-Atlantic, trans-Pacific and Latin markets.

“The industry continues to see a reduction in the number of air travelers, despite double-digit declines in fares. While there are signs that improvement may be on the horizon, regrettably the demand for air travel remains weak,” said ATA President and CEO James C. May. (ATA)

Weak ? 😉

And meanwhile in Thailand, you’re going to eat your Green Shoots Soup also.

Members of the Association of Thai Travel Agents (ATTA) have seen their client numbers plunge 33 per cent, with only 1.12 million inbound tourists year to date as of this past Sunday.

The sharp decline signals a continuation of troubles in the tourism industry and is prompting more calls for urgent rescue measures.
[…]
Fewer tourists have led to liquidity shortages among operators, including Anuthat Chinnawong, owner of The Chill Resort Koh Chang. He killed himself at the resort earlier this month, a few days before a bank approved his request for a soft loan to clear his debts.
[…]
“We need the government’s help to ease operators’ financial problems, so they can stay in business,” he said . (Nation)

Regarding the news from ATA in the US, nothing to add. Just another Green Shoots, the ones that the clown Obama likes.

And in Thailand ? Again no surprise (only the Green Shoots Lovers and the Recovery Hysterical Believers are surprised, and will be surprised tomorrow, over and over again).

A few keywords though : “We need government help… so we can stay in business“.

This guy has no clue. He didn’t understand, doesn’t understand and probably will never understand. They are just too dumb.

Peak Exports, Peak Tourism are just behind us. We won’t see the previous levels anytime soon. There is no point to ease the liquidity problems of those businesses : because they are doomed.

It’s not a liquidity problem, but a solvent demand problem.

Unemployment continues to rise in western countries… at fast pace. In the US, in Europe, in France for instance, but Spain too, it’s a disaster. PEOPLE WON’T TRAVEL TO THAILAND.

You don’t travel if you lost your job.

Period.

You can try to distort the facts, to light candles, to pray Budha or Allah, to jump naked into the Chaopraya River they won’t come. I repeat they won’t come back.

And hundred of thai companies, serving tourists, will just vanish.

We have too many hotels, too many “boutique hotels”, too many ridiculous spas, too many of everything.

Common sense and basic economic principles command the liquidation of those overcapacities.

But you can count on the stupid thai government, like all the other governments around the world : they will pour money into those companies !

Abhisit is trying very hard to win, this time for real, an election. 😉

After tax waiver for air conditioners… tax waiver for spas ?

The government pursues, with great care, its Lala Santa Claus policies.

Let’s take for instance… air conditioners…

Abhisit decided to remove the 15 % excise tax on air-conditioners (read here), to boost… local sales (from local manufacturers)
But then a few days later we learn :

“For a particular category, a Chinese air-conditioner retails for Bt8,000, against Bt20,000 for a Thai unit. This FTA will cause difficulties for domestic sales and exports to neighbouring countries” (Nation)

It’s obvious : the problem is not this tax, the problem is first the crisis (people and businesses have less money to spend, even if there is discount)… and then the competition. Eventually, to remove the tax is a nice gift made to the… chinese manufacturers !

Don’t get me wrong : I do not believe government should impose a tax on air-conditioners… What I criticize is the timing and then the fact that they don’t think about the consequences of such decisions.

There is no coherence, whatsoever. The government just adds some inane policies on top of each other, like gifts, without any broad analysis.

Let’s take the latest example… spas.

The Finance Ministry will soon discuss whether to waive the 10percent business tax on spas, to promote Thailand as a spa hub. Such a move is expected to draw more tourists and create jobs. (Nation)

Once the laugh is over about the “hub” obsession… the government shows again that it’s totally clueless.

The problem of the spa industry is not a tax. The problem is that… virtually all hotels in Thailand now are “spa” ! (and “boutique” too). 😉

I mean It couldn’t be more ridiculous. As ridiculous as increasing the number of 5 stars hotels for instance.

The market is totally overwhelmed by spas. And the demand can’t follow. It’s just impossible. Few people can afford to pay several thousands of THB for one hour of “spa”.

The bottom line is : with all those idiotic tax cuts, the government will lose precious ressources ( in a budget deficit situation)… and meanwhile will achieve zero, NIL, nada as far as “job creation” or “stimulation of the economy” is concerned.

Abhisit and his ministers are like headless chicken, running amok, agitated, and taking decision for the economy like… taking a dump.

International arrivals at Suvarnabhumi Airport, chart : -22,9 % in june

Update of the chart “International tourists arrivals at Suvarnabhumi Airport” for june :

642 732, that’s a drop of 22,9 % compared to june 2008.

But it is better than may : 603 533, -26 %.

It’s not -yet- a Green Shoot… Guess we’ll have to wait next spring ? 😉

Unless of course, the predictions of the Thai Airways acting president become true.

(Source, Office Of Tourism Development)

If… if… if and if… Thai Airways will return to profits

Do you know Jon La Joie ? You should.

Try his “High as F#%k” youtube song. It’s hilarious.

And It suits perfectly well the Great Tribulation of Thai Airways.

Consider this article.

THAI acting president Narongsak Sangapong said yesterday the plan would also in-clude measures to raise revenue through the improvement of products and services for greater competitiveness.

Business units will be restructured to be more profit-oriented and generate greater customer satisfaction.

“If no more unfavourable factors emerge and the high season returns to be buoyant as ever, and the average load factor this year exceeds 75 per cent and EBITDA [a measure of cashflow] is Bt30 billion or more, THAI will return to profit this year,” Narongsak said. (Nation)

Do you know what I mean ? High as F#%k.

Narongsak is flying very high indeed. The guy can show off because he managed to cut costs a little bit on H1… Cuts that he won’t be able to MAKE AGAIN on H2… And the tourists won’t of course come back for a high season “as buoyant as ever“.

You have to picture the situation : the tourism world wide is down the toilet… but in november everything will change ! Thanks to the magical stick of Narongsak, hordes of verocious (and rich, and solvent) foreigners are going to invade Thailand… On board of planes operated by Thai Airways. 😉

It’s not management anymore. Nor forecasting.

It’s just pathetic day dreaming for retarded children.

[ Post scriptum : to sleep well and stay cool, try “Not Giving a Fuck“. Narongsak should try] 😉

Abhisit : long public holidays… solution to tourism crisis and flu crisis

It’s the week-end. And like every week-end, we get a load of non-sense coming from Abhisit… thanks to his television address.

Thai Prime Minister Abhisit Vejjajiva said Sunday he is confident that the current five-day public holiday will help boost tourism and help lower the number of influenza A (H1N1) patients in the country.

Speaking during his weekly television address, Mr. Abhisit said the nearly week-long long holiday which began Saturday to mark Buddhist religious days — Asarahabucha Day and the Buddhist Lent Day which fall this Tuesday and Wednesday respectively — could boost tourism although entertainment places have been ordered not to sell alcohol drinks on both days.

The long holidays could also help lower the widespread of the deadly virus because a number of patients were recently found to be students and patrons of entertainment venues, he said.

As bars and nightclubs will be temporarily closed during the holidays, local administrative organisation personnel have been asked to help clean these places in an attempt to reduce the wider spreading of the disease, Mr. Abhisit added. (TNA)

Abhisit is obviously tired, or he’s running out of imagination. Because he said exactly the same absurdity about tourism 2 weeks ago (read here) !

Albeit there is a novelty : public holiday as a mean to fight… the spread of the flu A !

It’s huge.

Apparently, he missed a few classes during his education in Oxford…

People moving around is surely the best way to spread a contagious disease. People in large cities like Bangkok are going to visit their family upcountry… A very nice booster for the virus.

But no, in Abhisit’s Lala world, where honey and smiles are flowing and neurons are an endangered species, holiday will solve the economic crisis, will solve the problems in the South… What else ? Cure cancer ?

One thing is sure : the Prime Minister himself needs holidays… Very long holidays…

International arrivals at Suvarnabhumi Airport, chart : -26 % in may

After the chart of international passengers (embarking, disembarking and transit) at all international thai airports… here is another set of data : International tourist arrivals at Suvarnabhumi Airport, per month.

I prefer this one. More focused.

We had -26 % in may (606 533 arrivals) compared to may 2008 (821 601 arrivals).

As per nationality, we can see a striking -55 % for China, -32 % for Japan, -37 % for Asean. Europe resists with -10 %. USA at -19 %.

There is no improvement whatsoever… And there won’t be any any time soon.

The flu scare does not help of course. The politicians love the flu, because it can help them to hide their own responsabilities and limitations. But I believe it’s a secondary factor. The main one is of course the crisis, followed by the political crisis (absolutely not solved despite the stupid Abhisit’s smile).

People have less money to travel. Period. It’s a budget easy to cut.

We are likely to see a -25 % decrease, minimum, for the whole year. The inane Tourism Minister can eat his hat and his stupid projections and “targets” (thai politicians love “targets”, it helps them to feel important).

(Source, Office Of Tourism Development)

Abhisit’s Stimulation : “to boost tourism, let’s make public holidays longer”

Abhisit is totally burned out.After 6 months as PM, he’s becoming as dumb as his predecessors Surayud, Samak, Somchai… It’s pathetic and scary.

Here is his latest Grand idea, launched into the air like a fart.

Prime Minister Abhisit Vejjajiva on Friday announced that the government is ready to encourage a long public holiday as part of efforts to stimulate local tourism.

Speaking during a visit to the “Seminar in Thailand, Proud of Assisting Country,” he said his government had increased promotion of seminar and tour activities in Thailand in a bid to ease the impacts of the current economic sluggishness on tourism. (TNA)

I mean… WTF ? !

Abhisit should explain how people could enjoy long holidays and boot tourism sector ? I mean financially speaking ?

Crisis ? Allo ? Recession ? Exports crash ? Deficit ? No problems. In the Abhisit’s Lalaland Brain problems do not exist. Only solutions.

I have another arse-idea for our dashing PM : declare the year a permanent holiday… people would therefore stop working… and for sure we would see a fantastic boost of tourism business.

And another one : in order to ease the recession (a very annoying concept created by those damned westerners), create a lottery that would give 1 billion THB to each thai, adults and children as well (and cats and dogs too, it could be useful). Voila !

Welcome to the Rabbit Hole.

😉

Airports and Green Shoots : -22,21% fall in international passengers in may

Airports of Thailand suffered a -22.21% fall in international passenger numbers in May compared with the same month last year.

Airports of Thailand operates six international airports – Suvarnabhumi and Don Muang in Bangkok, plus Phuket, Chiang Mai, Hat Yai and Chiang Rai. It handled 2,252,571 international passengers (embarking, disembarking and transit) in May.

The poor May figures are linked to the political instability in the country which has hit tourism hard, plus the global financial crisis and the Influenza A(H1N1).

It has been a bad year for travel and tourism in Thailand with year-on-year monthly international traffic falls of -17.97% in January, -21.15% in February, -15.47% in March and -12.91% in April. For the first five months, international traffic was down by -17.93% year-on-year. (Moodie)

Another tasty Green Shoots Salad.

Watch out however : AOT wants to hide behind a fog cloud… and is mixing all the data : embarking, disembarking and transit. 😉 Still we have -apparently- a valid year on year comparison. We would need the “international arrivals” data… But those data will be published in several months…

As for the “political crisis”… well… it was rather in april (with the “revolucion” and the thai army shooting in Bangkok’s streets)…

And you can see the trend is not improving, month after month… Of course the flu doesn’t help (albeit in may, there were no cases in Thailand)… The main explanation is of couse : the crisis.

Less money, more problems lead to less international visitors. It’s Economy 101.

Like we had Peak Exports (last july)… Peak Tourism is behind us… And we won’t see again those levels any time soon.

I wrote it many times : this is not a linear process. The longer the crisis lasts, the uglier the fallouts on the economy will be.

A proof : after several month of hard conditions… the tourism businesses in Thailand are calling for help.

Association of Domestic Travel (ADT), the Thai-Chinese Tourism Alliance (TCTA) and the Thai-Japan Tourist Association (TJTA) complained to the House committee on tourism and sports that the government was not doing enough despite the gravity of the situation.

“There have been empty promises. We just can’t wait for state agencies’ help, and the prime minister must take a leading role,” said ADT president Maiyarat Pheerayakoses. (Nation)

Of course, those lobbyists have the wrong reaction.

To give them “loans” won’t solve the issue ! It’s not a liquidity problem, like they say, just a big, very big demand problem ! Throwing money at those companies won’t help.

They have to downsize, lay off, cut their prices etc.

Too many hotels, too many restaurants, too many “spas (today, virtually all hotels in Thailand are “spas” too, what a joke), too many guides, too many minibus drivers, too many employees, too many of everything etc.

And governments around the world can’t give a bailout to every freaking business sector on this freaking planet !

People don’t want to understand this simple equation.

Too bad for them.

Hotel industry : vertigo and delirium

The Thai Hotels Association (THA) will urge the government to launch a global campaign from May to November to revive tourism and stave off unemployment.

Tourism and Sports Minister Chumpol Silapa-archa will be asked to submit the seven-month measure for Cabinet approval.

The promotion will be aimed at attracting international tourists by offering special packages and benefits to all visitors during that period.

The special deal requires four continuous days of stay in a member hotel.

“The association would like the government to help by encouraging travel agencies across the world to push the campaign, but officials must award them Bt1,500 per tourist,” Methee Tanmanatrakul, president of the THA’s southern chapter, said yesterday.

The THA has projected the campaign would draw 2 million travellers during the low season and inject Bt36 billion in revenue into the industry, with Bt12 billion going directly to hotel operators. (Nation)

2 millions ? Why not 4 ? Or 8 ? Or 10 millions ?

The THA has to understand that during a solvency crisis, they can organize all the promotions they want… It won’t change the grim situation, It won’t create B747 full of gluttonous tourists ready to ransack 5 stars hotels, like Jesus multiplying bread.

Wake up guys.

The challenge is not to revive tourism… but to prevent a collapse of tourism.

Nuance…

In 2007, 14,46 millions tourists arrived in Thailand (among them 11,97 millions arrived by plane).

In 2008 (we don’t have yet the data for december), but the total should be around 14 millions.

So 2 millions = 15 %.