The Demand Mix is Changing: How to Win India/Russia While China Normalizes

The hospitality industry has always been dynamic, driven by fluctuating demand patterns and evolving traveler preferences. With the recent global shifts, particularly post-pandemic, the demand mix in key tourism markets is changing rapidly. This post will explore how Thai hotels and resorts can effectively target the burgeoning markets of India and Russia while adjusting to the normalization of travel from China.

Understanding the Current Landscape

As we look towards 2025, it’s clear that source markets are no longer uniform like they were in past cycles. Significant insights from analysts suggest that despite a slow rebound, Chinese arrivals are still below their previous peaks. Safety concerns and competitive alternatives have kept many potential travelers at bay. In stark contrast, India and Russia are experiencing double-digit growth in outbound tourism, while Malaysia's market has softened despite having considerable volume.

A bustling hotel lobby preparing for guests from various markets

This remix in demand impacts various aspects such as length-of-stay, booking windows, and on-property spending. Hotels need to employ granular tactics to cater to the specific preferences of these diverse markets. As shifts in traveler behavior and expectations evolve, hospitality players must adapt quickly to maintain profitability.

The Role of Advance Bookings and Occupancy Management

Current insights from BOT indicators reveal a dip in advance bookings into late 2025 compared to mid-year highs. That said, occupancy remains stable, thanks primarily to effective rate management and targeted segment strategies. Operators must focus on leveraging the unique demands of their target audience to maximize yield.

For resorts, segments from India—particularly families and couples—are keen on value-rich bundles, such as "all-inclusive-lite" packages or wellness add-ons. Conversely, tourists from Russia prefer long-stay options that come with kitchenette layouts and transparency in seasonal pricing.

A cozy resort accommodation featuring a kitchenette for long-staying guests

Moreover, central regions like Bangkok present a unique opportunity. While Average Daily Rates (ADR) remain above the national average, occupancy rates can fluctuate based on event calendars and airline schedules. This means that hotels need to proactively set yield parameters during peak times to avoid revenue slumps.

Transitioning from Discounting to Customized Offers

Operators who rely on blanket discounts are losing out to those who craft tailored experiences. Research suggests that hotels that codify segment playbooks, encompassing everything from rate fences to tailored inclusions, are outpacing those that don’t. Failing to distinguish offers can lead to a plateauing ADR.

To cater effectively to Indian and Russian guests, hotels should shift from generic Best Available Rates (BAR) to curated offers. This includes introducing specialized packages such as wellness solutions, culturally tailored food and beverage experiences, and guarantees for direct bookings. A crucial part of this strategy is deploying channel-specific merchandising to maximize impact across various online platforms.

A tranquil spa area highlighting wellness offerings for guests

What to Watch in the Industry

Hotel operators and marketers should closely monitor several elements as they adjust strategies to accommodate changing demand mixes. Key focus areas include:

1. Market-by-Market Pick-Up: Observing how India and Russia measure against traditional markets like China and Malaysia can yield insights into emerging trends.

2. Rate Parity: Ensuring consistency in pricing across Online Travel Agencies (OTAs) and direct bookings is essential for maintaining brand integrity and value.

3. Ancillary Spend: Understanding the balance between hotel ADR and auxiliary revenue streams such as dining and spa services is crucial for monitoring financial health.

   
   

In addition, it is essential to create specialized experiences that resonate with the target demographic. Operators should aim to craft at least two merchandising bundles to cater to the needs of these markets.

Actionable Next Steps for Operators

Given the insights discussed, here are immediate actionable steps for hotel operators:

1. Create India-Friendly Packages: These could include airport transfers, bundled meals (breakfast and dinner), child-friendly perks, and spa credits that appeal to family-oriented travelers.

   
   

2. Develop Russia-Friendly Offers: Long-stay packages featuring weekly cleaning services, resourceful kitchenette units, and attractive net rates can entice Russian visitors seeking longer vacations.

   
   

3. Localize Marketing Efforts: Tailor advertisements and booking experiences for each segment. This can improve engagement and conversion rates by resonating better with cultural and regional preferences.

   
   

A beautifully designed hotel lobby with decorations reflecting cultural themes

By implementing these strategies, operators will be well-positioned to embrace the ongoing changes in traveler demand, optimize their offerings, and ultimately enhance profitability. The journey ahead may be unpredictable, but with targeted tactics, hotels can emerge stronger and more adaptable in the new landscape of tourism.

As the hospitality industry evolves, recognizing the shifting demand mix and implementing tailored strategies will be crucial for success in the competitive market. Embracing the opportunity to cater to India and Russia while navigating the nuances of China's normalization will be key to hotels’ future growth.