The hotel sector will surge this year amid positive signs for hotel occupancy and room rates since the last quarter of 2015, said the Thai Hotels Association (THA).

Relative peace and stability in recent months has contributed to the tourism boost, the THA said.

The association noted hotel occupancy rates nationwide had risen by single digits year-on-year in the first quarter to 70-75%. Average room rates, in turn, have risen 10% since early this year.

This is taken as a positive sign, as room rates had failed to increase for years on account of political turmoil in the country.

The THA, therefore, projects average hotel income to grow by 15% this year, said president Supawan Tanomkieatpume.

In the first quarter, the THA reported that Bangkok, the North and the South had recorded noticeably higher occupancy rates. Rates in Bangkok rose to 75%, while occupancy rates in the North increased to 85%-90% and those in the South climbed to 80%-85%.

Only the East experienced a five-point decline to 65% due to a drop in Russian visitors.

Ms Supawan said the North, especially Chiang Mai, had seen significant occupancy growth thanks to the cross-border arrivals by road of Chinese tourists. The association forecast the average occupancy rate in the second quarter would be 5% higher year-on-year.

With this positive trend, the THA is confident that overall inbound tourist arrivals will meet the target of 32 million this year, with the key driver coming from 8-10 million Chinese tourists.

Although Chinese tourists spend less on average than Europeans, whose growth is expected to be flat, their sheer volume can offset lacklustre arrivals from Europe, she added.

Source: Bangkok Post