Thailand hotel investment to normalize to THB13 billion in 2025: JLL

BANGKOK, 21 May 2025: Hotel investment growth in Thailand will likely normalize in 2025 with factors including the entry of new high-quality hotels in the market and favorable occupancy and average day rates (ADR), easing the record trading momentum seen in 2024. According to JLL ((NYSE: JLL), hotel investment is expected to stabilize in 2025 with over THB13 billion (approximately $385 million) in capital projected to be deployed into Thailand’s hotel sector.

In 2025, JLL estimates that Bangkok transactions will continue to dominate the investment market, comprising close to 60% of all deals nationally. Significantly, JLL analysis shows that the average transaction size will grow to THB1.8 billion ($53.2 million), 80% higher than the 10-year average of THB1 billion ($29.5 million). Furthermore, the market in 2025 is expected to be dominated by single asset deals, consistent with transactions including the Hyatt Regency Bangkok Sukhumvit, the largest ever single asset hotel deal in Thailand history closed by JLL in 2024.

JLL believes that strong tourism momentum and growth in trading performance amongst both domestic and foreign investors in Thailand’s hotel market, was an exceptional event. This surge in investor appetite led to a record-breaking volume of hotel transactions in 2024 of THB22 billion (approximately $650 million), reaffirming Thailand's status as a core investment market in the region.

Performance in higher-end hotel segments is likely to stabilize, whilst economy to midscale hotels will continue showcasing strong improvement in 2025. However, the pace of investment, more in line with historical levels, is expected to open new conversations with investors and operators on debt and green financing, as trading volumes tighten this year.

“The fundamentals of Thailand’s hotel market are extremely appealing to investors, further exemplified by the expected diversification of investment patterns and the mainstreaming of more innovative and flexible approaches to debt. Financing mechanisms play a critical role in facilitating growth, renovations, and new developments within the economically important Thailand tourism industry, but we see greater optionality emerging with non-bank financial institutions complementing traditional bank lenders to support anticipated tourism demand,” says Pimpanga Orn Yomchinda, Executive Vice President, Investment Sales, JLL Hotels & Hospitality Group, Asia Pacific.

According to JLL, commercial banks extend substantial long-term credit facilities at competitive interest rates, operating under the stringent regulatory framework overseen by the Bank of Thailand. Their focus typically centers on large-scale, established hotel projects supported by comprehensive due diligence processes. Long-term credit facilities generally emphasize collateral, predominantly in the form of the hotel property itself, coupled with financial covenants, to proceed.

On the other side, non-bank financial institutions – defined as leasing companies, finance corporations and specialized lenders – are playing a far more active role in meeting financing demands and flexibility. Investors are increasingly treating this segment as more adaptable and innovative in providing financing solutions, effectively addressing market segments underserved by traditional banking channels. Although interest rates are generally higher, reflecting increased risk exposure, these institutions often structure bespoke financing packages, coupled with expedited approval processes and flexible terms, that accommodate the cyclical nature of hotel revenues.

Furthermore, as global awareness of environmental issues grows, governments, lenders and borrowers have been giving more weight to the environmental impact of hotel operations and developments. This shift has led to the introduction of sustainable financing options being offered by some major Thai banks and international lenders in the Thai market. The evolution reflects changing investor priorities while anticipating future regulatory changes and evolving consumer preferences in the hospitality sector.

“Sustainability has never been more critical to both owners and operators of Thailand’s hotels, and their broader stakeholders. The contractual commitments made with lenders and broader stakeholders through sustainable financing, facilitated by the Thailand Taxonomy and issued by the Bank of Thailand, serve as a public demonstration of these stakeholders’ dedication to sustainability, which has been highlighted as key benefits for corporate reputation and stakeholder trust. Both bank and non-financial institutions will be a play critical role in this ongoing financing transition in Thailand,” says YouRee Park, Vice President, Strategic Advisory & Asset Management, JLL Hotels & Hospitality Group, Asia Pacific.

Read more here: https://www.jll.co.th/en/trends-and-insights/research/thailand-hospitality-financing-guide-2025

Pimpanga Orn Yomchinda (right), Executive Vice President, Investment Sales, JLL Hotels & Hospitality Group, Asia Pacific, YouRee Park (left), Vice President, Strategic Advisory & Asset Management, JLL Hotels & Hospitality Group, Asia Pacific.