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News Release

Bangkok

Bangkok Hotel Trading Performance Likely to Improve in Second Quarter

Cancellation of State of Emergency is expected to help restore demand


​After having enjoyed an improving trading performance for three consecutive years between 2011 and 2013, the Bangkok hotel market saw a decline in occupancy levels and revenues per available room in the first quarter of 2014. This was due to a drop in demand, following a decline in international visitor arrivals in response to political turmoil. Whilst uncertainty remains high, demand for hotel rooms are expected to rebound in the second quarter as the state of emergency was lifted, according to the latest research by JLL's Hotels and Hospitality Group.

Andrew Langdon, Executive Vice President of JLL Hotels and Hospitality Group, said "Continued political unrest that escalated in October 2013 and the introduction of the state of emergency in January 2014 have negatively affected the number of international visitor arrivals to Bangkok.  This has created a demand shortfall in the Bangkok hotel market as reflected by a drop in occupancies. However, there is good news in the first quarter hotel trading figures with the average daily rate increasing in the range of 1.2% to 5.4% across all hotel segments, compared to the same period in 2013."

According to the Department of Tourism, international visitor arrivals to Bangkok in 2013 increased 20.1% over 2012 to a record 17.5 million visitors but fell by 15% in year-to-date March 2014 from the same period in 2013. The decline in international visitor arrivals has had immediate impact on all hotel segments in Bangkok.

  • The five-star segment was hit hardest with the average occupancy rate falling from 75.2% in year-to-date March 2013 to 45.2% in year-to-date March 2014. Though the average daily rate (ADR) increased by 5.4% over the same period, the average revenue per available room (RevPAR) declined by 36.6% due to lower occupancy rates.
  • In the four-star segment, while ADR in year-to-date March 2014 increased by 1.2% from the same period in 2013, the average occupancy rates fell from 80.8% to 54.0% over the same period, resulting in a 32.4% decline in RevPAR.
  • In year-to-date March 2014, the three-star segment saw an ADR improvement of 1.6% from year-to-date March 2013. However, with the average occupancy rate falling from 81.3% to 55.3% over the same period, RevPAR declined by 30.9%.

"Whilst no official update has been made available since the state of emergency was lifted on March 19, a consensus is that the cancellation of the state of emergency should help restore demand in the Bangkok hotel market," said Mr. Langdon.

"In addition, the amount of new hotel supply planned for completion in Bangkok this year is relatively low compared to previous years, and thus should not have any significant effect on occupancy rates," he continued.

There are approximately 100,000 hotel rooms across Bangkok. An additional 2,200 rooms are planned for completion in 2014, compared to the past four years when an average of 3,700 new hotel rooms per annum was added to the market.

"Having said that, it is hard to predict where the Bangkok hotel market will be heading in the remainder of 2014 as it relies to some extent on the political situation which remains uncertain. But experience from a series of crisis that Thailand has faced in the past decade shows that the market is resilient and recovers very quickly, thanks to Bangkok's position as one the world's most popular holiday destinations," Mr. Langdon concluded.