Bangkok’s hotel sector will see a significant amount of new hotel supply entering the markets this year with the market well on the road to recovery, according to Andrew Langdon, Executive Vice President of JLL’s Hotels and Hospitality Group.
The hotel supply pipeline in Bangkok comprises close to 4,000 keys that will be operational by the end of 2015. This represents a much faster supply growth when compared with the five-year average of 2,400 rooms between 2010 and 2014, according to JLL’s Hotels and Hospitality Group.
“The amount of new supply planned to enter the Bangkok hotel market this year would be a major worry if the market were in the same situation as 2014 when the tourism industry was hurt badly by politics,” said Langdon.
Bangkok registered 15.5 million international visitor arrivals in 2014, representing an 11.3 percent decline over 2013. Figures by STR Global show that Bangkok experienced a year-on-year (y-o-y) drop in the average revenue per available room (RevPAR) of 23.3 percent to US$97 (THB 3,181), primarily driven by a softening in demand.
However, hotel performance in the city has improved significantly this year in response to a rebound of international visitation. Average occupancy rates across the city rose from 45.3 percent in the first quarter of 2014 to 77.1 percent in the first quarter of 2015, allowing RevPAR to grow by 67.4 percent to US$147 (THB 4,796) over the same period.
“Prospects in the Bangkok hotel market in the remainder of 2015 are very positive as international visitors are coming back.
“With increased political stability and Bangkok’s strong position as one of the world’s most preferred holiday destinations, we expect the growth in demand for hotel rooms in the capital city to keep pace with new supply coming on stream this year,” Langdon concluded.
Related information | Hotel Destinations Thailand: http://www.jll.co.th/thailand/en-gb/Research/jll-hotel-destinations-thailand-january-2015.pdf
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
