Miracle Group, an operator of airport lounges and hotels, has observed tightened spending power among domestic tourists, prompting the company to rely on sales volume instead of raising prices.
Aswin Ingkakul, chairman of Miracle Group, said that even though the hotel sector has recovered from the pandemic, it is now facing headwinds from sluggish spending this year.
These stem from the delayed budget disbursement of the public sector, which is the main client for meetings, while individual guests have also tightened their spending at hotels.
Mr Aswin said Thailand's economic uncertainty has been affecting the mass market, unlike the Tom Yum Kung crisis in 1997 which mostly impacted the upper-income segment.
The group's major hotels -- Miracle Grand Convention Hotel and Asawin Grand Convention Hotel -- are heavily dependent on domestic customers, accounting for 70-80% of business.
Mr Aswin said meetings and convention groups are the key customers, while the remainder were foreign tourists led by the Chinese.
He said clients booking wedding ceremonies have been stagnant compared to decades ago, as the Thai marriage rate has declined, while those who do get married opt for smaller wedding celebrations.
Prior to the pandemic, November was the peak month for weddings as hotels hosted 60-70 couples on average, compared to only 15-20 at present.
Besides declining purchasing power, Mr Aswin said hotels had to deal with more costly expenses, such as consumer products, electricity, and labour costs.
However, it could not raise room rates as the increased rate might exceed the level of affordability among locals.
Mr Aswin said the group's strategy is to maximise the number of guests in room bookings, food & beverage sections, and airport lounges via promotional campaigns such as issuing cash vouchers to spend on hotel services to boost the group's cash flow.
Miracle Group also operates two other hotels: Louis' Tavern and Miracle Suvarnabhumi Airport.
It owns food courts, sleeping day rooms and 18 Miracle Lounges at both Suvarnabhumi and Don Mueang international airports.
Mr Aswin predicted that the group would secure a profit margin of 10% this year, which would be less than the margin of 20-30% which was earned in years prior to the pandemic.
With the government having expanded visa-free travel to 93 countries, he said the scheme creates more downsides as it would attract ill-intentioned visitors who enter the country for purposes other than travel.
He said the government should focus on boosting the length of stays, and not focus on headcount.
Regarding a murder case involving foreigners in Bangkok's city centre this week, he said the incident had worsened the country's image in relation to safety.
