Luang Prabang Hotels: The Tough Keep Going

By Bernie Rosenbloom

An early January survey of 116 Luang Prabang hotels shows more than 25% remain open. Many suggest the domestic tourism market in the country of 7 million stands at just 150,000 people. Yet, Luang Prabang’s hotel open rate is an achievement considering the country remains closed to foreign tourists.

Pullman Luang PrabangPullman Luang Prabang

As expected, big brands stand tall on the open list, but plenty of standalone properties are holding their own. How are they staying alive with locked borders and a limited domestic market?

Denis Dupart, General Manager of Accor’s Pullman Luang Prabang, said the hotel has remained opened since the beginning of the pandemic, with heightened safety precautions. “We did not suspend business operations despite much lower demand; however, we have implemented cost efficiency measures to continue operating.”

The Belle Rive Boutique Hotel, an upper-end standalone also never fully closed down. “There are always staff on site to make sure the property is well-maintained,” said General Manager Damian Killer, who noted reception is open, and the restaurant began a delivery service.   

Belle Rive Luang PrabangThe Belle Rive Boutique Hotel

Maison Dalabua spent three months after the provincial lockdown to refurbish the hotel. “We renovated all the rooms, and constructed a new pool deck and bar,” said Laos Hospitality Consulting’s founder Rodolphe Gay. He added the Manda de Laos restaurant performed maintenance work.

Maison Dalabua

“Our lone target since the beginning of Covid has been to operate and keep our business alive as much as we could, without losing money. “Luckily so far we are succeeding,” he said.

Sengmany Chaila, general manager of the Luang Prabang View said the hotel was temporarily closed from April through July, for maintenance, “We reopened on 1 August, as we needed the hotel to come alive, though occupancy remains between 5-15%…the revenue does not cover all expenses.”

Luang Prabang View HotelLuang Prabang View Hotel

It’s likely most other open hotels are also spilling red ink, but they opened or never closed. Why?

Mr Killer said The Belle Rive remained open, noting predictions in April trended towards a late-2019 recovery. “Looking back, financially we would have saved some money if we had shut down. Fortunately, our fixed costs are reasonable and mostly consist of salaries, prepaid lease, and depreciation.”

He added that occupancy did not justify keeping the hotel and restaurant open. The main reason for staying open was, “For our team members who have been supporting us for many years, helped us grow, and did a fantastic job before the crisis.”

He compared running a hotel to a marathon. “At The Belle Rive, we believe that the team is one of the biggest assets….each individual team member can make a difference, (so) we decided to keep the hotel running…In the long term, we will finish on top.”

Mr Gay holds a similar sentiment. “Our Team is a major key to our success, and we wanted them to have a job.” He also noted predictions of a late-2019 recovery, but, “We are in a new normal when the survival kit is a whole new recipe with a lot of flexibility, high tenacity, and a pinch of luck.”

Accor is known for staff loyalty, and they identified the best solution for each hotel. They decided Pullman Luang Prabang would remain open. “This allowed us to take care of foreign travellers who were not able to leave the country.”

Many visitors have now left. Only Lao citizens and expats remain. Those with disposable income make up the current travel market. On 11 September, the public and private sectors launched the Lao Thiao Lao campaign to boost domestic travel.

Luang Prabang hotels embraced the domestic drive, and the “12 Days in Luang Prabang” campaign over the holiday added to the push. However, hotels are reporting mixed results and opinions.

Mr Dupart said these campaigns promote domestic travel, with travel agents and DMCs bundling packages such as hotel and flights. However, “Domestic demand has not been strong enough to compensate for the loss of international travel, and most demand has been for weekend stays.”

He said The 12 Days was a great provincial promotion engaging many businesses to hold, “fun and festive activities…Unfortunately, it is difficult to track business impact from this campaign.”

Mr Killer agreed it is tough to tell how many visitors The 12 Days attracted, but a post-survey of 25 hotels shows positive results. He noted his occupancy went from some 25% to about 40% during the campaign.

“This is positive, and we saw a lot of families at The Belle Rive, and (they) often extended their stay…So, we were very happy with The 12 Days as it definitely brought us an extra amount of room nights.”

He added that the Lao Thiao Lao initiative appears to be successful for participating businesses. “When (the campaign) launched, it was still the hot season and travellers were looking for a hotel with a pool.” The Belle Rive’s non-pool UNESCO location dimmed occupancy, but drew diners to their restaurant. “We changed our menu to adapt more to domestic needs.”

Mr Chaila stated the initiatives received positive feedback from the local hospitality businesses, as more Lao people travelled to Luang Prabang during The 12 Days. “Luang Prabang View ran almost full capacity on 31 December to 2 January…from 3 -10th January we had good occupancy, but now we only have a few bookings a day.” 

Mr Gay agreed, saying Lao Thiao Lao and The 12 Days have been good to Laos Hospitality Consulting. “However, we now feel the level of visitors is diminishing,” noting the pandemic is running longer than expected. “It is time for a new chapter to start and we hope 2021, will bring stability and traveller flow to Laos.”

All agree Lao Thiao Lao has brought positive results, but they still have questions about the campaign’s sustainability. Seeking to integrate seasonality, holidays, and the limited market all come into play.

Mr Gay was blunt. “Domestic travel is the only reason why we are open today, so (Lao Thiao Lao) is paramount for the survival of the hospitality and travel business.”

Mr Chaila believes the campaign is sustainable, though only a small percentage of Lao have a tourism budget. As for seasonality, “Most will only travel on weekends and during school or public holidays.”

Mr Killer added, “Some hotels might be able to sustain their businesses with domestic travellers.” He said the focus should be on groups who come for meetings, staff retreats, and return official visits.

“Hotels who focus on individual tourists will rely on school holidays, special events such as Pii Mai Lao…but this definitely will not be enough to make money.”

Mr Killer pointed out that all hotels want a slice of the pie, and this is a great opportunity for domestic travellers to get a nice place for a very reasonable price. Locals and expats know about the $150 per night rooms, but campaign discounts put them inside.

Mr Dupart summed up the sentiment. “Lao Thiao Lao is aligned with a demand calendar, and there are limited target groups of local tourists who can afford to travel during this time.” He added, “We will need tangible travel subsidies from the government to support the campaign.”  

Given the facts, guesses, and sentiment, can these Luang Prabang hotels stay open? “The Pullman remains operating seven days a week,” Mr Dupart affirmed. The L’Atelier restaurant, H2O bar and Junction bar are adjusting their operating hours.   

Laos Hospitality Consulting is following suit. “We have adjusted our opening days and hours based on the business levels that arrive…Maison Dalabua is constantly open though,” Mr Gay said, admitting the restaurants and bar close once or twice a week, depending the seasonality.

The Luang Prabang View plans to remain open every day, but if they decide on a big renovation, they may temporarily close.

The Belle Rive also plans to remain open for now, with a focus on the riverside restaurant. “We want to keep our main staff and give them work. Depending on how things develop, (we might) only open on certain days, but no such plans have yet been made.”

Remaining open requires bookings, and many Luang Prabang hotels had counted on the booking.coms of the world. The reliance has now shifted.

“Definitely direct bookings,” said Mr Killer. He points to Facebook and recommendations from those have previously stayed at The Belle Rive.

Mr Chaila also points to direct bookings. “The best booking source during Covid is social media, the Luang Prabang View’s Facebook page, WhatsApp, and walk-in guests.”

According to Mr Gay, “We are gathering an important number of bookings through the social media campaign we have launched.” He said the best source for Laos Hospitality Consulting bookings varies, and is mainly from returning guests.  

The Pullman picks up the domestic market, “from public channels (both direct and indirect) and small and medium MICE groups from the government and corporate segment,” Mr Dupart said.

In 1953, a Texas football coach, John Thomas, motivated his team, which was losing, by saying “When the going gets tough, the tough get going.” They went on to win. Perhaps some Luang Prabang hotels are listening to that pep talk.