Chiang Mai’s Hotels Up For Sale As Chinese Tourism Declines

Many properties in Thailand, like the Novotel in Bangkok, are still very much enjoying strength of the tourism industry, but that has taken a bit of a hit recently as the industry confronts the idea that Chinese tourism to the country might hit a long decline.

Official data published early November revealed that the number of Chinese tourists heading to Thailand dropped by 8.8% in the third quarter of 2018, contributing to the economy’s growing slower than what was forecasted. Chinese tourists account for about one-third of all visits to the country, but they have been put off by the recent incidents that plagued the country, which include a deadly ferry accident that left 46 people dead.

While properties like the Novotel in Bangkok stay strong, smaller properties in the city of Chiang Mai, one of the more popular destinations in the country, have been hit hard. Property agents in the area now say that they’re having to deal with these properties being put up for sale as the downturn affects the smaller businesses the most.

More than 10 real estate sites for Chiang Mai properties have hotels in their listings, with many boutique hotels that recently shut down are offered at prices ranging from Bt50m (US$1.52), down to even a few million.

The sharp decline in Chinese visitors followed the capsizing incident in Phuket back in July, with most of the fatalities being Chinese tourists. Following that is a viral video of a Thai security guard slapping a Chinese tourists in the Don Mueang International Airport in September.

Tourism and its related industries account for 30% to 30% of Thailand’s GDP. The number of Chinese visitors to the country dropped by 0.9% in July, then 11% in August, and another 15% in September, slashing revenues.

Hotels and restaurants in famous Thai destinations like Phuket and Chiang Mai have suffered declines as the number of Chinese tourists have halved on the year since July, according to President Ittirit Kinglake, of the Tourism Council of Thailand.

Even airlines have felt the effects, with national carrier Thai Airways logging a third-quarter net loss twice as big as the preceding year. CEO SumethDamgrongchaitham looked to the decline in Chinese passengers for the 3.7 billion baht loss, as well as the major storms that hit Japan and Hong Kong, which cut off flights to these particularly routes.

The Tourism Authority of Thailand has not revised 2018’s targets of 38 million arrivals and 3 billion baht in revenue despite the drop in Chinese arrivals.

Recently, the Thai cabinet also approved the waiving of a 2,000-baht VISA fee paid by travellers upon arrival from 21 places, which include mainland China, taking effect from December to January. This fee waiving is part of the TAT’s efforts to bring in more tourists into the country.

However, most operators in the tourism industry say that the VISA discount is not likely to completely restore the Chinese arrivals to initial forecasted by the end of 2018, which is normally the peak season for the industry.