When Thanpuying Piyaoui opened the Princess Hotel in downtown Bangkok in 1948, the idea of a Thailand-themed hotel that catered to the tastes of both local and international visitors seemed lofty. Thailand was just emerging from the throes of the Second World War and its brief war-time ally Japan had lost the battle against allied forces from the West. Thailand's involvement in the war had led it to suffer large losses in its rice exports and large swathes of its population were still classed among the rural poor.

Driving ambition

Against this backdrop, Ms Piyaoui’s belief that her hotel could tap into the needs of a nascent, yet growing class of consumer that was seeking quality hotels with a Thai touch may have seemed overly ambitious to some. But post-war development, coupled with rapid population growth, enabled Thailand’s hotel and tourism industry to flourish. By 2008, the Princess Hotel, which had been rebranded as Dusit International, had evolved into a hotel management and property conglomerate, with more than 20 resorts across Asia and the Middle East.

“The company was founded by my mother 54 years ago and she was a believer in the ability of a Thai brand to do well in the market place and compete against international brands,” says Khun Chanin Donavanik, the CEO of Dusit International. “In the first 40 years our company expanded. [Our hotels] are mainly based in Thailand but in the past few years we pushed out more. We are listed on the Bangkok Stock Exchange and we are opening six hotels this year in India, the United Arab Emirates, Kenya and China.”

Established with a focus on serving business travellers across Thailand, Dusit International prides itself on providing a unique blend of Thai culture and architecture with Western style service. According to Mr Donavanik, the growth of the company is closely linked with the performance of Thailand’s tourism industry and European travellers have formed a core part of their market.

“The biggest market for our company is the Europeans,” he says. “They represent between 30% and 40% of our company revenues and our hotels are mostly for business travellers. Yet we also have a lot of beach destinations [in Thailand] so we serve a lot of leisure travellers.”

Changing demographic

The ongoing economic recession in the West has dealt a blow to the hotel and tourism industry. As austerity measures take effect in more mature markets, the disposable incomes of European and North American tourists have gradually shrunk. The professional services firm PricewaterhouseCoopers (PwC) found that this has led key tourism hotspots, such as London, to experience lower occupancy rates. In its report, PwC found that in the UK, revenue per room in 2012 was 10% less than at its 2007 peak.

For Mr Donavanik, reduced demand in the more expensive destinations in Europe and North America has conversely created opportunities for Thailand. Western tourists have become highly judicious with their spending and this has led them to opt for lower cost destinations such as Thailand, which they perceive as being better value for money.

“The funny thing is, Thailand has been doing quite well,” says Mr Donavanik. “In 2012, we had a 22% increase in the number of visitors and from the UK we saw a 3% growth. Thailand has a lot to offer and even during the global economic slowdown, we were doing quite well.”

Mr Donavanik says that the changing demographic of Thailand's visitors will lead international hoteliers to seek growth from emerging markets. South-east Asia is currently the world’s fastest growing region and its robust development has created a new class of consumers that have more to spend on travel in Asia and elsewhere. Dusit International’s decision to open new hotels in India and China this year was a significant step designed to capture this market.  

“We have seen a big growth in the number of Asian visitors,” says Mr Donavanik. “Last year, there were 70 million Chinese travelling overseas. That number by 2020 will be 100 million. If you look at Asia’s markets [more generally], by 2020 there will be 200 million Asians travelling mainly within Asia, but also in Europe and North America. The biggest market in the world is in Asia and everyone is going there. We want to continue to push into Asia, as we believe that, in the long term, the travel industry will do very well there.”