“Although the tourism and hotel industry continues growing, competition is increasing too. And that is causing some players to close their doors,” said Sukanya Janchoo, vice president of the Thai Hotels Association (THA).
She added that every hotel in the capital was facing the same challenges. Pricing is now the name of the game for many hotels, while the quality of customers is a secondary issue.
Her comments followed the decision by Park Nai Lert’s owners to shut down the 36-year-old hotel at the end of this year along with other buildings on the 15-rai (2.4-hectare) plot that was once the parking area for the SompatsiriSampatsiri family’s bus company.
In a hand-written message to employees, Naphaporn Bodiratnangkura, the hotel’s managing director and a member of the third generation of the family business, said the hotel had faced a number of tumultuous years.
“The hotel industry is facing fierce competition, with new hotels popping up on all roads. The management has endured hard work to cushion the impacts and survive. Nevertheless, changes are eventual [inevitable] and this will be a major one,” said Naphaporn, granddaughter of the late Thanpuying Lursakdi Sampatsiri, who founded the hotel 36 years ago.
Naphaporn took over the hotel’s management from her aunt Bilaibhan Sampatsiri, a daughter of Thanpuying Lursakdi.
According to Naphaporn’s note, some employees can apply for jobs with AccorHotels Group, which completed its takeover of the Swissotel brand this month. They are also entitled to legal compensation plus extra monies from the SompatisiriSampatsiri family.
The prospects for Park Nai Lert started to become shaky when the owner decided to terminate a 20-year management contract with Hilton International in 2003 and turned to the Singapore-based Raffles International Group, which owned the Swissotel brand.
Pimolpa Suntichok, first executive vice president of Siam Commercial Bank, which is a major creditor of the hotel, said Park Nai Lert had shouldered high maintenance costs, as it wanted to keep its identity value amid high competition in the hotel business.
The competition is indeed fierce in the city, which according to a MasterCard survey, is expected to welcome more than 20 million visitors this year.
It is estimated that there are 50 five-star hotels in the capital, with a total of 5,000 rooms. Most of them are located on the banks of the Chao Phraya River, on Sukhumvit Road, and in the Ratchaprasong area.
The latter two locations became popular mainly after the opening of the Skytrain in 1999. They have since attracted new properties that feature new decorative styles and modern technology, in line with the behaviours of today’s travellers. To keep pace, old properties bank on renovation and refurbishment. Some resort to price discounts.
Looking for a room on October 8 on Agoda, a hotel booking site, a customer can check into a Grand Deluxe room at the InterContinental for Bt6,000 a night. Renaissance Ratchaprasong charges Bt5,500, Grand Hyatt Erawan Bt7,550 and Anantara Siam Bt8,100.
Swissotel Nai Lert Park charges Bt4,400 for a room with the famous garden view.
The THA’s Sukanya, who is also the general manager at Dusit Thani Hotel Bangkok, said the game had totally changed from what it was a few decades ago. Today’s operators need to improve internal management and service standards continually. Meanwhile, they also need to be wise about their target customer group and lure them with fresh-looking and fully equipped properties.
“Brand positioning may be one of the considerations for hotels in the current situation because different brands will generate different rates and gross profit,” she added.
Competition does not come from only established operators.
Surapong Techaruvichit, managing director of Asia Hotel Bangkok and former president of the THA, said Bangkok was home to more than 500 registered hotels. Five-star rooms make up only 10 per cent of the 50,000 registered rooms spread across the city.
Nationwide, there are 500,000 properly registered rooms on offer, while the number of unregistered rooms is estimated at 500,000.
“Half of the players have remained uncontrolled in terms of prices and standards,” he said.