Hotel market bounces back for Q1 2011 but no respite for the industry

The Bangkok hotel market recorded strong numbers for the peak Q1 2011 period indicating that the troubles of last year have been largely left behind according to the latest Bangkok Hotel Market Report from Colliers International Thailand.
 
May 13, 2011 - PRLog -- Patima Jeerapaet, Managing Director of Colliers noted the strong rise in occupancy for Q1 to similar levels recorded in the same quarter of 2010. "Clearly the resumption of long term bookings are now taking effect and you could say it is business as usual for the industry", he said. However Mr Patima did warn that future new supply, especially in the Upper and Luxury end of the market will keep hoteliers on their toes. "Developers are still clambering to establish higher scale hotels and this will mean that tourism growth will need to continue apace to absorb new supply", he warned. It is anticipated that around 6,000 rooms will be supplied in the Upper/Luxury segment over the course of the next two years according to the report.

The ability for Thailand to bounce back after adversity is a unique quality for the country according to Jean Marc Garret, Director of Hospitality for Colliers. He dubbed this the "darling effect" as tourists are long accustomed to the travails of the country and are rather sanguine to these due to familiarity. "It takes years for some tourism markets to recover after a tragedy, witness the time it took for Bali to return to normal after the bombings", he pointed out. Mr Garret stressed that Thailand has a high level of returning visitors, around 60%, compared to other countries.  "In Thailand people know what is really happening compared to the news reports and will return after just a few months", he said.

However Antony Picon, Associate Director for Research, was more cautious about Bangkok's prospects in light of increasing competition from its neighbours. "Vietnam, Cambodia, Laos and Myanmar are growing more strongly and altogether account for about 60% of the arrivals figure for Thailand." Mr Picon is concerned that Bangkok risks being squeezed between cities such as Ho Chi Minh City, Yangon and Phnom Penh, which offer more of a wow factor of a frontier destination, and the more mature cities such as Singapore and Hong Kong which reinvent themselves to keep fresh to entice tourists. "Bangkok and the country must start doing the same rather than relying on Land of Smiles and elephants", he warned.

In Q1 2011 a total of around 75 rooms were added to supply in Bangkok in the Upper/Luxury segment with the opening of just one hotel, The Sivatel Bangkok, in the Northern CBD area. The total number of rooms at the end of Q1 2011 was more than 15,100 in the Upper/Luxury segment.

Average occupancy rates have been rising since Q2 2010 although Q4 2010 and Q1 2011 represent the traditional high season for the city. For the Luxury scale segment occupancy increased significantly in Q1 2011 compared to Q1 2010 from the mid sixties to the high seventies. However a small decrease was recorded in the Upper Scale segment with a few percentage points drop.

The increase in RevPAR for the Upper scale market for Q1 2011 is on the back of an increase in occupancy while the Luxury scale segment showed a slight decrease due to higher occupancy being more than cancelled out by lower room rates. On a comparison between Q1 y/y RevPAR fell dramatically due to lower rates in the Luxury segment but was stable for the Upper scale hotels.

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Colliers International Thailand - Experienced Real Estate Property Consultants in Thailand- was established through combining the resources of the global real estate services firm Colliers International, and Pasupat Realty Co.Ltd.
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