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News Release

Bangkok

Bright prospects for Bangkok hotel market

Government’s approval for aviation reform plan will benefit the country’s tourism and hotel industry


​The Bangkok hotel market witnessed a solid performance in 2016, with healthy average occupancy rates staying around 75% across all segments. The short-to-medium term outlook is positive as the growth of demand is likely to continue, according to international property services firm JLL.

"We are positive about prospects in the Bangkok hotel market. Thailand's tourism boom is likely to continue and generate consistent demand for hotel accommodation in the city in the foreseeable future," says Frank Sorgiovanni, Head of Research Asia Pacific at JLL's Hotels & Hospitality Group.

Sorgiovanni's view is supported by a number of recent good news for Bangkok. Data from the Tourism Authority of Thailand shows the number of international visitors to the capital city reached 20.8 million in 2016, representing annual growth of around 7.5%, and are likely to rise further. In the Euromonitor International's 100 Top City Destinations Ranking 2017, Bangkok ranks second only after Hong Kong.

"Over the past several years, the hotel and hospitality sector not only in Bangkok but across the country has benefited greatly from the fast growth of the country's tourism industry, driven by the country's strong profile as one of the world's most popular tourist destination, and consequently continued growth in international visitor arrivals. In addition, improved international air connectivity, specifically the proliferation of regional low cost carriers, has contributed a lot to this growth," he says.

As far as air connectivity is concerned, the Thai government's recent approval for an aviation reform plan is more good news. The reform plan is aimed to enhance the country as a regional hub with some 400 billion baht to be invested over the next decade into airport infrastructure that will more than double annual passenger capacity to 277 million.

"With the aviation reform plan in place, Thailand is more fortunate than many of its peers in the region in this aspect as air traffic in Asia Pacific is expected to surpass those in US and Europe. The growth of Asia's aviation sector is expected to continue but its pace is likely to stagger as aviation infrastructure is not keeping stride, with many Asian airport hubs already operating well above capacity," says Mr Sorgiovanni.

In Bangkok, the future expansions of Suvarnabhumi and Don Mueang International Airports are expected to facilitate this strong growth of visitor arrivals. However, this major airport reform is countrywide with the upgrade of ten regional airports and 26 city airports also planned (with a combined investment cost of 86 billion baht).

Over the next decade, forecast arrivals at Suvarnabhumi are expected to double from the existing 45 million tourists the airport now facilitates. Don Muang could handle some 40 million passengers (up from 30 million currently) while U-Tapao International Airport which primarily services Pattaya may record 30 million passengers. This is astounding growth given U-Tapao could serve up to 3 million passengers a year when its current expansion is complete by 2019.

"Airport reform aside, the increase of international arrivals is further supported by the Thai Government promoting tourism campaigns on various destinations around the Kingdom and importantly, recent changes towards tourist visas, along with extending the long stay visa from one year to ten years. This is great news for Bangkok and the future looks bright for the tourism sector in Thailand more broadly," Mr. Sorgiovanni concludes.