Rising expenses add to hotels’ woes
HOTEL OPERATORS ANTICIPATE high expenses from power bills, food prices and labour wages as the low season arrives amid scorching temperatures.
Thienprasit Chaiyapatranun, President of the Thai Hotels Association (THA), said during the hot season, electricity expenses could rise to 20% of total costs, compared with 10% in the cool season, reports the Bangkok Post.
The Energy Regulatory Commission is maintaining the tariff rate at B4.18 per kilowatt-hour from May to August.
Along with rising fuel costs, which affect food prices, and the minimum wage hike to B400, these factors pose a challenge for hotels, said Mr Thienprasit.
He said hotels may not be able to pass on these costs to guests, particularly small hotels recovering at a slower pace than upper-tier hotels, which still rely on price competition during the low season.
Only large hotels can maintain high daily room rates as they have sufficient funds for renovation and upgrading their services, said Mr Thienprasit.
He said the occupancy rate in May this year should be similar to May of 2023, at roughly 50%.
The government should urgently disburse this year’s fiscal budget scheduled for May, as well as support hotels through government meeting and incentive budgets, said Mr Thienprasit.
Udom Srimahachota, Vice President of the THA’s western chapter, said the government should consider offering a low interest rate of 2-3% for small and independent hotels that want to invest in clean energy or install energy-saving equipment such as solar cells or energy-efficient air conditioning.
This would help hotels reduce energy costs and aligns with global net-zero campaigns, said Mr Udom.
The government would also collect more tax from these transactions, he said.
Mr Udom, also chairman of environmental policy at THA, said most hotels cannot access loans as they are still reeling from the pandemic, unlike large operators that can raise more capital.
Purchasing new energy-saving air conditioners and compressors for 35-room hotels could cost up to B10 million, he said.
Mr Udom said hotels in Hua Hin, Phuket and Krabi also face water shortages during the hot season, requiring a larger budget to reserve water supply for their operations.