SIGNIFICANT GROWTH IN BANGKOK HOTEL SUPPLY IN 1H 2013

General Press Releases Thursday August 15, 2013 08:38
Bangkok--15 Aug--CB Richard Ellis

According to the latest survey by CBRE Thailand, the leading international property consultant, the hotel supply in Bangkok grew 12.1% year-on-year with the completion of six new hotels in the first half of 2013. Currently, there are 37,500 hotel keys in downtown Bangkok and there will be an estimated 4,400 additional keys by the end of 2015, bringing the total to almost 42,000. This represents an 11.9% increase on current figures.

Almost all of the new hotels are high-rise buildings. The most popular area for hotel development remains the Ploenchit/Sukhumvit area with 65% of the total hotel supply and four out of six new hotels opened in this area. The Silom/Sathorn area accounted for 21% of the total hotel stock while the Riverside area accounted for 14%.

Approximately 2,250 keys will be completed in the second half of 2013, comprising of luxury rooms 13%, first-class rooms 8%, mid-range rooms 46%, and economy rooms 33%.

The level of competition due to new openings is still high, although the supply trend this year is certainly encouraging for the industry with the number of construction permits declining significant over the past two years. "The big challenge for hotel owners is to raise the room rates which have not grown significantly for the last five years. The second half of 2013 may finally see the growth in visitor arrivals outpacing new supply allowing owners to raise rates," said Mr. James Pitchon, Executive Director - Head of CBRE Research & Consulting, Thailand.

There is a significant opportunity for economy hotels in Thailand. The increase in visitor arrivals in Bangkok has largely been driven by Asian feeder market and many Asian visitors prefer a budget hotel. Visitors want consistency in quality as well as value for money. And currently there are a limited number of players with branded product in this market. Many hotel operators have announced plans to open budget hotels in Bangkok. Central Plaza Hotel (CENTEL), who are known as a high-end hotel operator in Thailand under the brand "Centara", has jumped into this segment and introduced their new economy brand "COSI". The Erawan Group (ERW), a listed hotel developer, has also introduced their new budget hotel brand "Hop Inn", targeting to open 30 Hop Inn hotels in Thailand.

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Future Hotel Supply in Downtown Bangkok, 2005 - 2015F
Source : CBRE Research

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