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19 Oct 2022


Hotel and lodging business, 2022: Recovering gradually, but at a meager pace (Current Issue No.3351)


        KResearch expects that turnover in the hotel and lodging business will record steady growth during 2023, thanks to improvements seen in tourism, including both inbound and outbound markets. Particularly, the number of international tourist arrivals in Thailand during 2023 is projected to double over that seen in 2022, serving as a major driver for travel-related businesses such as MICE.  
        Nevertheless, the recovery in the hotel and lodging business may remain fragile and uneven due to numerous challenges stemming from uncertainties surrounding tourism markets. Additionally, market conditions may continue to be dampened by several downside risks such as persistent COVID-19, which will inhibit certain tourist segments from taking trips, plus potential recession in the world’s leading economies as many countries are grappling with soaring inflation, volatile and persistent rises in energy costs. Concurrently, the Russia-Ukraine conflict is set to escalate, thus intensifying the energy crisis in European countries and this may in turn undermine the recovery in Thailand’s inbound tourism market during 2023. Moreover, competition in the business is expected to intensify due to the opening of new hotels and lodgings in new tourist attractions amid rising operating costs driven by higher product and energy prices. Their financial costs are set to increase, as well due to the upward trend in interest rates, presenting a challenge for hotel and lodging operators to devise their 2023 business plans.
        Given this, KResearch remains cautious towards the recovery in the hotel and lodging business during 2023. We expect that the overall occupancy rate at hotels nationwide may stand at roughly 52-60 percent, which would be lower the 70.08 percent projected for 2022, and turnover in the hotel and lodging business will reach approximately THB500-600 billion, which would be lower than its pre-COVID-19 levels, because the recovery will likely be uneven. Hotels and lodgings that are set to bounce back well are those located in the most preferred tourist attractions for Thai tourists in the western and northern regions. Hotels and lodgings targeting Asian and Middle Eastern tourists, plus those with substantial income from MICE, especially events and seminars organized by public and international agencies, have the potential to recover well, too.