Looking To The Future
The coronavirus pandemic has caused untold suffering around the world, while in Thailand the deadly virus has all but killed off a once thriving tourism industry. For seasoned hoteliers like Lars Kerfin, General Manager at Renaissance Bangkok Ratchaprasong Hotel, the objective now is to implement strategies that will keep his business viable until such a time international travel becomes possible with the introduction of a vaccine.
“It has been a challenging year for all concerned. We went from very high occupancy to total shutdown. We are now beginning to seeing a small increase in bookings, which gives me encouragement for the future; it can only get better from here. For many businesses, not just in hospitality, I think the name of the game is to survive long enough until a coronavirus vaccine becomes available. That doesn’t mean to say the virus will suddenly disappear, I think it will be around for quite some time and we’re just going to have to deal how to live with it. I honestly don’t see any improvement coming just yet and it will surely remain a major topic in 2021.
“I’ve been in Thailand for many years and in that time I have seen the country face a number of disasters, some natural and some of our own making. This has been a huge challenge for the hospitality industry, but each time we’ve been in the news we have always managed to pull together to make Thailand a safe and welcoming destination once more. Now, with coronavirus it is the other way around where many countries are suffering terribly from a resurgence in virus cases whereas Thailand is a safe country. There is an opportunity here because as other countries start opening up Thailand will be considered a safe haven,” said the straight-talking Lars.
It has become painfully clear that towns and cities that have become over-reliant on the tourism industry are now starting to look like ghost towns. Traditionally popular islands like Samui and Phuket have been badly affected while Pattaya has seen a massive exodus of small, medium and large businesses. Bangkok with its millions of inhabitants hasn’t escaped the financial ruin either with countless businesses shuttering and a number of hotels deciding to remain closed.
“In many ways, Thai resorts are not just competing amongst each other but also against destinations like Bali and Vietnam. Now, when I hear that Australia, Taiwan and South Korea are close to opening up again, tourists that perhaps would have gone to Bali might shift and decide to visit Koh Samui instead. If that happens, then I think these destinations will see a relatively quick turnaround.
“From previous experience in dealing with crises, this particular crisis would stack up to be an eleven out of ten; it’s that unprecedented. Hotel managers in Thailand became used to having a secret folder somewhere titled “CRISIS” that contains all the procedures and contingency plans they put in place during a crisis. It helps not to panic but to instead have the attitude of ‘been there, done that’. That’s kind of like how it felt during the first few weeks of this outbreak. Many people assumed it would be like dealing with Bird Flu or Swine Flu all over again. Then as we got further into the year, we all began to realise this is a different ball game. It is very different to anything we’ve faced before or anything I’ve had to handle,” he continued.
On 26th March, authorities in Thailand took the extraordinary step to close the country’s land, sea and air borders by declaring a state of emergency. While hundreds of thousands of foreign tourists suddenly became ‘prisoners in paradise’, almost a million overseas Thais were locked out. Likewise, tens of thousands of eligible foreigners with work permits, retirement and marriage visas were denied entry. Overnight, businesses reliant on internationals visitors began seeing their markets shrinking before their very eyes.
“We began to see a drop off in bookings around mid- to late-February. There comes a time when you have to decide when does it become financially unhealthy to keep the hotel open, a point when it becomes more cost-efficient to lock the hotel down even though you are still committed to paying salaries, utility bills, etc. It’s a huge cost factor. During March, we began limiting the number of rooms and floors that were open and we also took the painful decision to close some outlets.
“Then in late March, we decided it would be better to shutdown which coincided with the government’s announcement that there would be support for staff through the social security fund. We wanted to avoid laying off our staff; that was one of our biggest concerns. After all, the staff are the life blood of Renaissance Bangkok. They take care of our customers; they are the heart and soul of the hotel. Anyone can create a nice building for a hotel but ultimately it is the people that really make the difference,” he added.
As local restrictions were eased in late June and domestic travel to other provinces permitted, Bangkok hoteliers faced the harsh reality that thousands of potential customers actually preferred to spend their time outside the capital. As inward travel to the city came to a standstill, the prime concern for city centre hotels was how to increase occupancy rates while trying to retain pre-coronavirus staff levels. Ingenious marketing campaigns targeting domestic travellers were rolled out but after almost two months in lockdown, guests were voting with their feet and heading out of town.
“During the first couple of weeks when hotels started opening up again, Bangkok was very, very quiet. However, properties in Pattaya and Hua Hin were almost being overrun on the weekends with 100% occupancies as people escaped Bangkok for a few days. The downside was though that for the remainder of the week the hotels sat empty or had very few guests. In a company like ours we were able to shift the workforce and find solutions for where staff were required including combining roles. We also received lots of support from Marriott, our mother company, in terms of getting the right message out and important procedures like health and safety. There’s a confidence when you’re following international standards.
“With our Marriott Bonvoy programme, we have a very loyal customer base that knows us very well. We can offer different benefits like extra points, credits, and so forth. The goal has been to provide our guests with a better experience while still adding value. At the restart, we offered a special package priced at Bt4,000 per night with Bt3,00 in hotel credit that could be spent on food and beverages or at the spa. Almost instantly, this became super popular with domestic travellers, which traditionally has never been our market. It’s a different story for our dining outlets as we are normally fully booked with local diners.
“Bangkok has never been a popular staycation destination for Thai travellers as they prefer to go to places like Hua Hin, Pattaya, Chiang Mai. However, when we look at other markets like China for example, the hotels there are already running at over 60% capacity because they have a massive domestic market. The same can be said for many countries in Europe where we see very strong domestic travel markets. As with all large hotels in Bangkok, there has been a huge shift in our customer base. Thankfully the team here have risen to the occasion and have adapted from serving mainly international clients to local clients,” Lars pointed out.
For a hotel manager to see their once vibrant lobby now void of guests is a mournful image, but this was being played out at hundreds of hotels throughout Thailand. Large hotels and resorts cannot be simply closed at the drop of a hat, important systems need to be kept running by a skeleton crew. To lift his team’s spirits, Lars took it upon himself to come to the hotel every day with a bag full of sweets and refreshing cold drinks for the staff tasked with keeping the hotel’s systems ticking over.
“It was a really sad time for me when we closed. As a manager, you want to see your hotel busy, your staff buzzing around and guests laughing and enjoying themselves. But seeing an empty lobby, that is depressing. When we did finally reopen, it was a beautiful time seeing the first few customers come through the door and to see the excitement in my staffs eyes.
“If you were to ask me when I think things will start to pick up again, then I’d say not until the second half of 2021. However, it’s all at the government’s discretion as to when they open the borders. I hope to see a rise in customers if we can create travel ‘bubbles’ with other countries in the region. But for us it’s not tourists we need but also business travellers who are equally important. There are some of our regular customers who would be on the first plane to Thailand if the borders opened tomorrow, while others say they don’t need to be here immediately. It’s becoming more and more of a challenge to travel internationally these days,” he lamented.
But, as mentioned earlier, the marketing masterminds at Renaissance Bangkok have been busy laying the groundwork for some interesting packages that will be rolled out in the coming weeks such as the Sumptuous Staycation and Spa Staycation. Guests booking a stay can select what cuisine or spa treatment they want to indulge in during their stay and the hotel will create a tailor-made staycation for them. Hotel vouchers are also proving very popular with corporate and private clients the festive season approaches pushing aside the traditional hampers typically given at this time of year.
Bangkok has survived its fair share of traumas over the years, continually bouncing back stronger after each setback. Although coronavirus is a different beast altogether, there is a great deal of optimism that a vaccine will be approved in the coming months and the tourism taps will be slowly opened. Of course, no one in their right mind would predict a return to 2019 occupancy levels anytime soon, but the doors to the Kingdom cannot remained closed indefinitely.
“At the end of the day, all Bangkok hotels are in the same boat. Some properties might belong to different owners who will play a key role going forward, but there is no benefit for hotels like our to be lowering prices to Bt1,000 per night. That doesn’t serve anybody because we need to pay fair salaries to our staff and we can’t see profitability going to zero. I hope we can find a balance to the issues we are all facing. Looking forward to Christmas and the New Year, we are expecting an increase in customers but nowhere near the 95-100% occupancy we normally run at this time of year,” concluded Lars.
Source: Punch Media Digital.