Too many rooms in Chiang Mai

CHIANG MAI, 3 September 2012: An oversupply hotel rooms in Chiang Mai needs to be addressed, possibly by cracking down on properties that are illegally operating as hotels.

Interviewed by TTR Weekly, Thai Hotels Association Northern Chapter president, Phunut Thanalaopanich, said there were 41,000 rooms in Chiang Mai which created a substantial oversupply situation.

“The association wants to work with provincial authorities to cope with this situation and achieve a balance between demand and supply.”

He claimed there were at least 130 hotels in the province that were illegal and should be closed if they refuse to acquire a permit.

“The province and association should ensure the legal framework is followed.”

In addition to illegal hotels, there are another 20,000 apartment units which offer daily rentals and they need to follow the law too, he said.

Despite the oversupply, the province still attracts investors particularly on Nimmahaemin Road a popular tourist district. However, the bottom line profit has been absent from hotel operations in Chiang Mai for some time. Only hotels that are loan-free can declare operating profits, while land values have escalated making it even less likely that developers will gain a return on investment.

Around 90% of hotels in the province are operated by Thai companies  and just 10% are chain managed.

“We have to look at other markets than the traditional ones ,Europe and North America. There are emerging markets such as China, he said.

“Malaysia and Singapore travellers are another target as we move towards ASEAN Economic Community 2015.”

The association along with Chiang Mai Centre for Skill Development is planning to organise a training ASEAN language course for hotelier personnel.

Sourced: ttrweekly