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Shift of staffs, hiring freeze as city hotels, restaurants enter survival mode
Publication Date : 28-01-2014
The political tensions have thrust Bangkok hotels and restaurants into survival mode.
They are striving to pare operating costs to match their loss of income from plummeting occupancy rates and declining numbers of diners by freezing hiring, especially of part-timers, and moving staff to work in their better performing properties.
Ronnachit Mahattanapreut, senior vice president for finance and administration at Central Plaza Hotel Plc, the operator of Centara Grand, Centara and Centra brands, said yesterday that the group decided to stop hiring temporary staff. Usually in January, the firm would increase part-time staff by more than 10 per cent to serve the growth in business. Also, pay rates would be on the rise.
Since November, MICE events at the hotels have been cancelled or postponed.
Full-time staff have been sent to more active hotels of the chain, especially in Phuket, Hua Hin and Pattaya, where room occupancy is still high at more than 80 per cent. This follows the bitter lessons learned during the red-shirt political turmoil.
The group carries 9,300 full-time workers on its payroll.
Patrick Basset, senior vice president for Accor Thailand, operator of the Novotel and Ibis brands, said one of the top priorities was to take care of the company's employees, especially during these difficult times. For those hotels affected by demonstrations, Accor is taking steps to help the employees, including offering training sessions for them to attend. Also, they are sent to sister hotels in Bangkok and upcountry on mission duties. For those facing difficulties commuting, accommodations are provided.
Sanga Ruangwattanakul, president of the Khao San Road Business Association, said the business community in the area was adopting cost-saving measures. Electric appliances used on empty floors of hotels would be unplugged. Part-timers are no longer hired, while full-time staff would be given the chance to go on vacation with some pay. However, this political scenario would have to end next month. If the situation extends beyond that, they are definitely offering leaves without pay.
Khao San has more than 10,000 people working in the area.
Since November, Khao San has been badly hit. Sales of various businesses have dropped 40-50 per cent, while occupancy, including the Phra Nakhon area, has plunged to 50 per cent from 90 per cent in the same period last year.
About 70-80 per cent of the clientele is foreign, while the rest is a balance of domestic night revellers and visitors. However, some foreign groups have almost disappeared, especially Russians, who visit the area as part of their travel package.
Thaniwan Kulmongkol, chairwoman of the Thai Restaurants Association, with about 30,000 members, said more than 10,000 of them are located in Bangkok and have been devastated by the political mayhem. After a state of emergency was decreed on January 22, the business loss among members is projected to be more than 300 million baht (US$9 million).
However, layoffs are considered as the last option. Many have moved their staff to help in better-performing outlets. Operators can continue shouldering costs for three months in spite of suffering losses. If the situation drags on for more than three months, wait staff would be the first group to be axed.