16 Sep, 2002
How The Oriental Awoke to the Potential of the Middle East Market
In the hotel business, location is everything. A few weeks ago, Kurt Wachtveitl, general manager of The Oriental, realised that his hotel’s riverside location was not his only asset.
In a letter to various embassies of the Middle East countries inviting them to book their guests at The Oriental, he pointed out that Thailand’s most famous hotel is located right next to one of Bangkok’s oldest mosques, the Haroon mosque.
“We had never thought of that before. They (the guests) don’t even have to get a bus to get there,” he said. “They can just walk. I have double-glazed glass in my rooms but if they leave the balcony open, they can even hear (the call to prayer).”
Mr Wachtveitl is one of many hoteliers who have awoken to the potential of the Middle East business. In the last few months, his business has more than doubled, including royal family members of one Gulf emirate who, after years of spending their summer vacations in Europe and the United States, no longer feel welcome there and are instead choosing to head to Southeast Asia.
“They took 50 rooms over a week,” he said. “They loved it here, the food, the shopping, the entertainment. It’s not expensive, the standards are high and there are plenty of things to do, even for the children.”
Mr Wachtveitl said the Middle East countries generate only two per cent of total room nights, but help top up occupancy in the monsoon season when business dips across the board. The high-income, long-staying clientele is exactly the kind he wants to compensate for a decline in business and upmarket leisure travel from other countries.
Said Mr Thomas Nyfenegger, who overseas the Middle East market for Diethelm Travel, “The Middle East definitely has the potential to become one of the leading markets over the low season. They prefer a city / beach combination, currently Bangkok / Phuket. As they are always travelling in big groups (family and relatives) and on a very short notice, the hotels will have to show some flexibility.”
He notes that several Middle East airlines like Emirates and Qatar Airways have increased their capacity to Asia and especially Bangkok. Thai Airways, too, is to start flying to Abu Dhabi and Bahrain thrice weekly as of October 27, 2002.
Earlier this year, when the Thai government revamped its visa policies over security concerns, it dropped the visa-free privilege for citizens of several Arab countries in North Africa but retained it for citizens of countries like Kuwait, Qatar, the UAE, Bahrain and Saudi Arabia.
Tourism Authority of Thailand figures for the first six months of this year show that Middle East visitors accounted for only 2.15 % of total visitor arrivals, or 115,520, including visitors from Israel. However, increases like 30 % from Kuwait are indicative of the trend to come.
The expatriate market also has considerable potential. Figures show that of the 14,667 visitors from the UAE in January-June 2002 over the same period of 2001, a total of 8,071 were foreign residents of UAE.
The market that Thailand is losing out most is from Saudi Arabia. The big gainers are Malaysia and Indonesia which have respectively recorded 55% and 35% increases from the Gulf kingdom in the first half of 2002.
Due to years of downgraded relations stemming from the unsolved killings of the Saudi diplomats and the still-missing jewellery stolen by a Thai worker, Saudis need special permission to visit Thailand. Expatriates living in Saudi Arabia have no such problem; in the first half of 2002, 4,146 of the total arrivals of 6,968 from Saudi Arabia to Thailand were expatriates.
The number of Middle East arrivals is actually less important than the average length of stay and expenditure, both of which are among the highest of all arrivals.
For example, in 2001, visitors from the UAE stayed an average of 10.85 days in Thailand and spent an average of 4.943 baht (or US$111) per person per day. This generated 1.66 billion baht (US$37.40 million) tourism foreign exchange revenue to the Thai economy. Visitors from the UAE were the fourth highest spenders, only after Saudi Arabia, Egypt and South Africa.
At the moment, most of the direct weekly flights, a total of 17, link Thailand with Dubai in the UAE. Of these, 14 are code-shared by Emirates and THAI and the remaining three are by Royal Brunei Airlines. There are also two direct weekly Gulf Air services linking Bangkok and Abu Dhabi.
Between September 17-19, 2002, the Department of Export Promotion is to participate in a trade, tourism and investment promotion exhibition in the UAE.
The Middle East market has the potential to create jobs for thousands of Thais, especially in South Thailand, many of whom are culturally familiar with the Middle East market and are learning to speak the language.
Mr Wachtveitl said that for the first time, he plans to send sales representatives to work the Arabian trade shows and drum up business. At the moment, however, he is more worried about the prospects of a war in Iraq which he fears will again lead to the 25% occupancy the hotel suffered for seven months after the Gulf war in 1991.
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