Leanne Harwood, Vice-President of Operations for South-east Asia and Korea, InterContinental Hotels Group: Interview

Interview: Leanne Harwood

What impact has Thailand’s strong rebound in tourist arrivals had on the nation’s hospitality sector, and what is expected for the future?

LEANNE HARWOOD: Strong numbers in tourist arrivals in 2016 and recent years have had a positive impact on the hospitality sector, and this is reflected in key metrics. In Bangkok alone, the hotels industry has seen an increase in occupancy rates, the average daily rate (ADR) and the revenue per available room (RevPAR) over the past year. Occupancy rates rose by 4.7% to 81.1% overall, while ADR increased by 4.3% to reach BT3265 ($91.98) and RevPAR grew by 9.2% to hit BT2648 ($74.60).

Over the next few years, it is anticipated that Bangkok will be one of the largest recipients of Chinese visitors in Asia, second to Tokyo. Chinese travellers are drawn to destinations such as Thailand for its rich history and culture. The country is expected to receive close to an additional 700,000 arrivals from China and will see an increase in Chinese traveller spending of close to 150% ($20bn) by 2023, with Bangkok and Pattaya as key destinations.

To what extent do you consider the current level of hospitality development to be sustainable, and is there a risk of oversupply?

HARWOOD: We operate in an environment which is constantly changing and, as a group of more than 5000 hotels across 100 countries and territories all over the world, we are accustomed to cyclical fluctuations in the supply and demand of hotels.

Thailand continues to be a market of huge potential for operators in the sector. The country is now one of Asia’s most popular destinations for business and leisure travellers, as approximately 32m tourist arrivals were expected in the country during 2016, and the industry continues to enjoy strong support from the government. In 2015 the Ministry of Foreign Affairs launched a new six-month, multiple-entry tourist visa in hopes of reaching a target of BT2.3tn ($64.8bn) in tourism revenue for 2016, and this gives us confidence in the long term from a business perspective.

Another area we have continued to see growth in Thailand is the boutique hotel segment. There is a growing preference for hyper-local experiences and memorable accommodation over factors such as budget and convenience, and since 2009 the global boutique hotel segment has continued to develop as more and more travellers look for unique and refreshingly local experiences.

How is the sector addressing potential disruptions such as “sharing economy” platforms and the increased use of online booking services?

HARWOOD: The accommodation space is a diverse landscape, with a number of different segments meeting a wide variety of guest needs. Sharing economy providers, or short-term online rental companies, are innovative players in the market and provide a service which suits a certain profile of guest. While this segment is growing, it is not an issue about competition as this has always been a competitive industry. For us, it is about focusing on safety and delivering true hospitality, as guests are at the heart of our industry.

We also recognise that some travellers use online travel agencies (OTAs) and intermediaries, and it is important that we are where our guests want us to be. OTAs should serve as partners for hotel operators and we are happy to work with them. They provide quality incremental business through which we can earn the loyalty and trust of our guests. By delivering great guest experiences we can ultimately drive direct bookings in the future. It is also crucial for operators to stay ahead of these trends through initiatives such as apps on mobile platforms, collaboration with digital travel services and partnerships with added-value mobile technology programmes.