The famous luxury Dhara Dhevi Hotel in Chiang Mai, Thailand will shut down its operation after being hit hard by the COVID-19 outbreak.
The Lanna-style hotel, founded in 2002, filed a request for rehabilitation in June but the Court of Appeals has dismissed the petition.
The President of Thai Hotels Association – Upper North Chapter, Laied Bungsrithong, said last weekend that the main reason for the hotel’s closure was due to the lack of fluidity.
Even though the hotel had Inter Far East Energy (IFEC) acquire its shares of 2.5 billion baht and helped manage the tumbling business, it could not continue to operate anymore in the shrinking hospitality sector, Laied explained.
Improving domestic demand
For the northern hotels’ overall operation, there are positive factors such as the government’s schemes, cold weather, and long holiday which will bring more domestic tourists to come in the last month of the year.
“Around 80 per cent of hotel operators had reopened their businesses except for smaller ones that had to cut the costs,” said Laied.
“People are waiting for the signs of recovery in tourism sector especially the return of foreign tourists”
He also called on the Thai government to extend the period of the “We travel together” scheme which would end next January, assist the cost in terms of water and electricity bills, and support workers in small businesses.
However, local media reported that impact from the COVID-19 pandemic was still hitting the tourism sector with income from tourism estimated at only 750 billion baht from tourism revenue this year.
In 2019, Thailand saw 3.01 trillion baht of total revenue from the tourism sector.
Minor International Plc (MINT), a leading global hotel operator, posted a 64 per cent drop in its core revenue year-on-year, pressured by a challenging environment in all key markets.
“With the different lock down or restrictions imposed in each country, Minor Hotels is following closely on the local government measures to formulate its business strategy,” said the company.
In the region, domestic tourism has seen improvement risen following the easing of regional restrictions in some countries. Minor mentioned that, in Thailand, the tourism stimulus campaign has helped increase domestic demand.
Minor has also offered some of its facilities in Bangkok and Phuket as alternative state quarantine (ASQ) hotels in order to create additional revenue.
For the financial management, the hotel operator said it would continue to focus on preserving its liquidity and managing its balance sheet.
Minor had approximately 30 billion baht of cash on hand and 25 billion baht of unutilized credit facilities as of October, according to the third-quarter report. “The company will enter into discussion with creditors on the extension of the covenant testing waiver, as well as making suitable changes to the covenant definition,” the company added.