BANGKOK, Jan 24 – TRIS Rating, Thailand’s leading rating and economic information service, expressed concern today that the performances of hoteliers and tourism-related companies in the kingdom will be negatively affected by prolonged political turmoil which has dragged on since October 31.
TRIS Rating president Santi Kiranand said the caretaker government’s invoking a state of emergency in Bangkok and surrounding areas on Wednesday has heightened the fears of foreign tourists, especially those from East Asian countries who comprise 60 per cent of foreign visitors to Thailand.
He said more than 40 countries had recently warned their citizens against travelling to Thailand, though showing optimism that the Thai tourism industry, based on the past experience, was quite resilient.
Recent events and crises, such as the military coup in 2006, political turmoil during 2008-2010, and the flood crisis in 2011, have not had significant, lasting effects on tourism, said Mr Santi.
He cited the nationwide hotel occupancy rate which dropped to around 50 per cent in 2009-2010 but recovered to around the normal level of 60 per cent in 2012 and 2013 while the number of foreign tourists has grown significantly, rising from 14-15 million per year during 2007-2010, to 19.2 million in 2011, and more than 22 million each year in 2012 and 2013.
Since anti-government rallies are mainly in Bangkok and surrounding areas, highly-affected hoteliers are the hotel companies that derive most of their revenues from assets located in Bangkok, he said.
The Tourism Authority of Thailand (TAT) estimates that the hotel occupancy rate in Bangkok is expected to fall by 30-40 per cent in Q1 this year.
Having rated three major hoteliers – Central Plaza, Dusit Thani and Minor International – under the present circumstances, Mr Santi said the Dusit Thani will be the most affected since its hotel properties in Bangkok contributed around 22 per cent of its total revenue, following by Central Plaza (15 per cent) and Minor International (7 per cent).
The prolonged protests will inevitably impact performances of all hoteliers, he said.
The airline industry is another sector affected by the political unrest, said Mr Santi, adding that drops in cabin factor for Thai Airways International (THAI) had coincided with political turmoil, citing a decline of THAI’s cabin factor from 76 per cent in Q2 of 2008 to around 66 per the cent in Q2 during 2009 and 2010 but recovering to around 70-75 per cent in 2012 and 2013.
The TRIS president said travel warnings issued by several countries are expected to hurt THAI’s operating performance this year.
THAI’s operating performance is still under pressure because its non-fuel costs remain high compared with industry benchmarks, he said.
If the current political tensions could ease within the first half of this year, Mr Santi said the effect on the ratings and outlooks of the rated companies should be limited.
He said the ratings TRIS Rating has assigned to the hotel and tourism-related industries stay unchanged: Central Plaza at A/Stable, Dusit Thani at BBB+/Stable, Minor International at A/Stable, and THAI at A+/Negative.
