Interview with Chanin Donavanik, CEO Dusit International

BANGKOK, Thailand (eTN) – He is one of the most experienced hoteliers in Thailand and has a reputation to clearly say what must be said. Chanin Donavanik is head of Dusit Intenational, one of the most well-known Thai chains with properties not only in Thailand but also in the Philippines, India, and the Middle East. In exclusivity for eTurboNews, Mr. Donavanik looks at perspectives in Thai tourism.

eTN: How do you qualify the recovery in tourism following Thailand’s troubles in April and May?
DONAVANIK: The speed of recovery in Thai tourism is an absolute surprise to us. Following Bangkok’s violent clashes, we were predicting that recovery in tourism would take at least between six and twelve months. It bounced back just after six weeks! And business travel picked up again. The situation was completely back to normal for us by August in terms of visitors, with occupancy of 65 percent. That was, however, not the case in terms of prices.

eTN: How do you explain such a quick recovery?
DONAVANIK: There is definitely a strong sentimental feeling towards Thailand. For many tourists, Thailand – and Bangkok in particular – is associated with the Thai culture, the wonderful food experience, the fun, shopping, and our Thai people. Our sense of welcome, the service, and the natural kindness of Thais are the best “instruments” for promoting Thailand. I have a friend in Hong Kong who decided to come back to Bangkok after June, telling me that he felt bored not coming back. For lots of travelers, this is their way to show support to the destination.

eTN: Although Bangkok was strongly affected, how was your business in the rest of Thailand?
DONAVANIK: I could easily say that Phuket is probably now the best performing market in the Kingdom and one of the best perfoming in Asia. The destination offers everything from superb hotels and food experiences to beautiful beaches, nature, as well as culture and shopping. A good indication is that there will be this winter 20 percent more flights to Phuket. By contrary, Chiang Mai suffers considerably, probably due to its political support to the opposition. The government has, for example, stopped supporting Chiang Mai’s hospitality industry for more than a year now, as they do not organize any meetings in this city. But Thailand is generally back on track, and if nothing bad happens again, we expect an excellent season from October.

eTN: Do you feel that hotel rates will increase again in Bangkok?
DONAVANIK: Bangkok suffers from an overcrowded hotel market. There are more hotels today in the capital than in Singapore and Hong Kong combined! And they are more hotels to come over the next years. I estimate something between 6,000 and 7,000 more rooms. And I do not take into consideration service apartments, which are like hotels. Just on Sukhumvit Road for example, they are some 20 hotels and residences in the pipeline or ready to open! Prices will then definitely stay low in Bangkok. It is, of course, good for the consumer but certainly not for hotel operators.

eTN: Are you looking then to expand beyond Bangkok?
DONAVANIK: We see a huge potential in India. We will open in 2011 a new property in New Delhi with a total of five hotels being planned across the country. We will also be present next year with a D2 property in Bali. In the Middle East, we will add a property in Abu Dhabi and are now considering Doha. But the Dubai market is doing now pretty badly. Prices have dropped by 50 percent as supply continues to far exceed demand. We would like also to be present in Europe. We recently set up a development office in Europe. Despite the entry ticket into Europe remains expensive, the continent is currently more affordable as local currencies dropped on average by 20 percent compared to the Asian ones. It is currently cheaper to invest there than in big Chinese cities! We would then love to be present in priority in London, Paris, Munich, but also in Zurich and Milan.

eTN: What could bring Dusit to an already very competitive hotel market around the world?
DONAVANIK: We would like to consider ourselves as an ambassador of Thailand’s art de vivre offering all the traditions and services from our culture, such as perfect service, culinary experiences, or spa [treatments]. We train our foreign staff in Bangkok to learn about our culture. We also operate cooking schools in cooperation with French cooking institute “Cordon Bleu,” where our students learn European but also Thai cuisine. We have such schools in Bangkok but also in the Middle East and India. We would love to go to China, but it is almost impossible without being granted a university license.

eTN: How do you see the image of Thailand today?
DONAVANIK: The image is still not good. And as long as the country faces ongoing political problems, this will not change. Internal political decisions have indeed an effect on the country’s perception. Thailand must follow the rule of law when dealing with problems. We are, for example, still waiting for a court’s judgment over Bangkok airport’s occupation in 2008. It would definitely help to restore confidence into our country, and maybe help us to reverse the trend of [a] much shorter booking period by travelers to Thailand.