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Bangkok hotels hit by political unrest

According to CBRE latest Quarterly highlights report, political unrest is taking a toll on hotels revenue, especially in Bangkok. But Phuket as well as other tourist destinations were less affected than Bangkok by the political situation.

Boris Sullivan

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Hotel Bangkok BTS

According to CBRE latest Quarterly highlights report, political unrest is taking a toll on hotels revenue, especially in Bangkok. But Phuket as well as other tourist destinations were less affected than Bangkok by the political situation.

• The Average Daily Rate (ADR) of all grades of hotels in Bangkok was around THB 3,200 with no growth Y-o-Y.

• Revenue per Available Room (RevPAR) of all grades of hotels in Bangkok was THB 1,800 in Q1 2014, dropping significantly by 30% Y-o-Y.

• CBRE forecasts that the supply of hotel rooms in Bangkok will increase 14% by 2017.

• Tourist arrivals for the whole country decreased by 3% Y-o-Y to 6.6 million.

China was still the biggest feeder market despite decreasing by 14% Y-o- Y to 0.97 million arrivals in Q1 2014, accounting for 14.7% share of total international tourist arrivals.

Bangkok goes down, but Phuket goes up

The number of international tourist arrivals to Thailand in Q1 2014 decreased slightly by 3.4% Y-o-Y to 6,598,240 arrivals. The number of international passengers disembarking at all AOT-managed airports in Bangkok decreased more, by 11.1% Y-o-Y to 5,318,064 but increased by 6.9% Y-o-Y in Phuket.

This means that the hotels in Phuket as well as other tourist destinations were less affected than Bangkok by the political situation.

The decrease in arrival numbers to Bangkok resulted in a sharp drop in occupancy rates. In Q1 though it was the high season, Bangkok’s hotels of all grades reported occupancy rates of around 55% in Q1 2014 compared to 80% in the same period last year and this number was the lowest recorded over the past five years.

Hotels near the anti-government demonstration sites reported occupancy rates even lower than 50%. Advanced room bookings were slower since travellers were still wary of the situation and MICE (Meetings, Incentives, Conferences, and exhibitions) events were also cancelled.

Despite the decline in occupancy rates of hotels in Bangkok, we saw a slight increase in the Average Daily Rate (ADR) by 0.6% Y-o-Y.

But, this increase was largely due to Thai Baht depreciation by 10% from Q1 last year. RevPAR dropped significantly by 30% Y-o-Y.

In Q1 last year Chinese arrivals to Thailand grew by 100.1% Y-o-Y but this quarter Chinese arrivals posted a decline of 13.8% Y-o-Y.

We expect another 5,000 hotel keys to be completed by 2017 and this will further increase supply by 14%, which is positive for the industry. We have seen a slowdown in new hotels opening and new hotel construction starts.

Source : http://www.cbre.co.th/en/ResearchCentre/Research/Bangkok-Luxury-Hotel-MarketView-Q1-2014

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