Flower show leads to Chiang Mai price war

Hoteliers in Chiang Mai foresee no end to the price war that has resulted from an oversupply of rooms that arose ahead of the Royal Flora Ratchaphruek 2006 exposition. The northern province currently has an estimated 25,000 hotel rooms, compared with 17,000 before the three-month international horticultural exposition opened in November 2006. Most of the rooms are budget and middle-scale hotels, according to data from the Tourism Authority of Thailand (TAT).

Another 500 to 600 rooms are due to open in the first quarter of next year with the completion of new five-star hotels, according to Phairoj Suksundee, the director of sales for the Holiday Inn Chiang Mai.

He said the problem was compounded by the conversion of some serviced apartments to accommodate daily guests and thus functioning like hotels.

The oversupply is expected to continue, and as result, hoteliers are slashing prices to draw business. Room rates at three-star hotels range from 1,500 to 2,300 baht per night this year and would be at least 1,600 to 2,500 baht next year, said Mr Phairoj.

Bangkok Post, Thailand