Koko Global Hospitality (KGH) Sees Growth Opportunity Amidst Thailand's Tourism Downturn, Focuses on Domestic Market
Despite a recent slowdown in Thailand's tourism sector, Koko Global Hospitality (Thailand) Co Ltd (KGH), the operator of the Kokotel hotel chain, is strategically leveraging the quieter market as a growth opportunity, particularly within the domestic travel segment. Rei Matsuda, KGH's founder and CEO, attributes the current market situation to the off-peak season, expressing optimism for a full recovery by the high season at year-end.
KGH's immediate focus is on enhancing operational efficiency to maintain strong performance despite lower foreign visitor numbers, remaining confident of solid occupancy rates in 2025. While Thailand has welcomed over 15 million foreign visitors this year (January 1 - June 8), a slight 2.87% decline from last year, Malaysia has emerged as the top source market, surpassing China. This shift, coupled with a decrease in Chinese tourists, is prompting KGH to diversify its guest profile towards emerging markets like India and the Middle East, and significantly, towards domestic Thai travelers.
KGH recognizes the substantial potential in domestic tourism, as Thai travelers, traditionally inclined towards international destinations, are increasingly opting for local vacations. This mirrors a trend seen with Chinese travelers. KGH anticipates domestic tourists will account for a higher proportion of bookings in cities like Chiang Mai, Hua Hin, Pattaya, and Chiang Rai. Thai nationals currently represent 15-20% of KGH's hotel guests, with this percentage expected to rise in certain properties.
Mr. Matsuda also identifies significant growth opportunities within the three-star hotel segment, especially in regions like Phuket, Krabi, and Khao Lak, where demand for affordable yet quality-conscious options is rising. KGH, which currently manages 41 hotels across Thailand, Japan, and the Philippines, aims to expand its portfolio to 100 hotels by 2026 and an ambitious 1,000 hotels across 10 countries by 2035. The Philippines is particularly targeted for growth in the three-star sector due to a gap in quality management. KGH's adaptable strategy, focusing on domestic demand and strategic international expansion, positions it for resilience and long-term success in the evolving global hospitality landscape.
