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| Pleasing view from the ShaSa hotel |
The durability of recent gains of the tourism industry in Koh Samui, one
of the major travel destinations in Thailand, is expected to be tested in the
coming months. The rates of Koh Samui hotel accommodations have remained
relatively flat in previous years, but this will soon change. Notably, between
16,000 and18,000 tourism guest rooms are available in the island. The occupancy
rate during the 2013 first quarter was estimated at 85–90%, up 10 percentage
points from the same period last year.
Plans are afoot among upscale tourist establishments, like the popular ShaSa Resort at the island’s southern district, to increase their charges this year.
Hotels with five- and four-star ratings intend to raise their rates by between
8% and 12% to cope with rising operating costs, mainly brought about by higher
minimum wage of their workers.
Effect of baht value gains
The island’s lower-end hotels, on the other hand, are stymied from
increasing their rates following the recent value appreciation of Thailand baht
currency. Upscale hotels are currently charging room rates of from 4,500 to
7,500 baht. With the looming rate increases, tourism industry players in Koh
Samui fear that the price level may lower their competitiveness in the
international travel industry.
The president of the Tourism Association of Koh Samui, Tanongsak
Somwong, is one of those most apprehensive about the rising value of the baht. It’s
his hope, he said, that the uptrend of Thai currency won’t last too long as it
erodes the purchasing power of visiting tourists upon their funds’ conversion.
Power supply issue resolved
In the past, local hotels are very much wary of raising their rates for
fear of losing much of the inflow of tourists coming from the U.S. and Europe,
countries of origin which have been experiencing financial difficulties. The
recent rise in the value of the baht, hence, is a source of genuine concern,
particularly for those hotels serving the lower-end of the market.
Unlike the four- and five-star hotels, these tourist-lodging
establishments cannot increase room rates, as their prospective guests are more
price-sensitive. High-end hotels, in contrast, have a well-to-do clientele more
likely able to absorb the impact of the hike in room rates.
Fortunately, the concern on power outages, which hounded Koh Samui, is
now being addressed. Last year, a significant number of tourists left the
island with an unexpected failure in the local power grid. Electric supply has
normalized and measures are being mapped out for any contingency occurring
later.
