Top Bangkok Hotels Can Only Fill 70%

[george]

Top hotels feel the pinch

BANGKOK: -- Luxury hotels in Bangkok will be fortunate to fill 70 per cent of their rooms this year, because of political uncertainties, a strong baht and a slowing, weak economy, an international property consultant predicted on Tuesday.

"We expect that overall occupancy rates for Bangkok's four- and five-star hotels will only be 70 per cent in 2007 compared to 75 per cent in 2006," said Navaphol Viriyakunkit, head of research at CB Richard Ellis Thailand.

CB Richard Ellis blamed the hotel occupancy decline on political uncertainties; New Year's Eve bombings in Bangkok last year, which killed two people and have yet to be solved; and a weak economy.

Despite the slowdown, the average room rate in Bangkok's finest hotels has risen 2 per cent this year in baht terms and more than 10 per cent in dollar terms because of the depreciation of the greenback against the local currency.

CP Richard Ellis predicted that the average room rate at Bangkok's luxury hotels was likely to hit 170 dollars per night at the end of 2007 compared with 158 dollars at present, primarily because of the dollar's ongoing slide.

Hotel prospects for 2008 looked worse because of a looming glut in the market.

The property consultant projected that more than 2,000 new four- and five-star hotel rooms would be completed in Bangkok in 2008, raising the supply by 24 per cent from 2007.

Thailand's tourist arrivals in 2007 have been disappointing. During the first eight months of this year, 9.59 million tourists visited the kingdom, up 2.3 per cent from the same period in 2006 but well below the more than 10-per-cent increase registered in 2006.

European arrivals grew by 14.3 per cent in the first six months of 2007. East Asian arrivals were down by 3.9 per cent, and South Asian visitors increased by 10.5 per cent over the same period last year.

The number of Russian tourists increased to 139,000 in the first six months, a 51-per-cent increase year-on-year, while arrivals from India reached 265,000 visitors, an increase of 14 per cent. Middle East arrivals were also up 20 per cent on a year-on-year basis.

But from January through June, arrivals from Thailand's traditionally strong markets dropped: 12 per cent from Malaysia, 7 per cent from Japan and 18 per cent from China.

--DPA 2007-10-30

[londonthai]

expected 5% drop in rooms rent this year is not bad and 70% rent is probably the average for all hotels - but the next year might see further 15-20% drop (due to new hotels being opened) and that would be significant slide.

it's fine to charge $170/night high season, with a shortage of accommodation during xmas/new year - but the rest of the year guests would simply rather rent an appartment or even a house for much less.

[torrenova]

I read that a number of the top hotels are returning to THB pricing because of the USD slide.

Personally, I thought they were severely underpriced from 10 years ago until about 3 or 4 years ago but have recently gone the other way and now offer very poor value for money. I do not consider a near USD200 a night (after the ++ rip off) good value given the country it is in and the local salaries.

[bruceboy]

I read that a number of the top hotels are returning to THB pricing because of the USD slide.

Personally, I thought they were severely underpriced from 10 years ago until about 3 or 4 years ago but have recently gone the other way and now offer very poor value for money. I do not consider a near USD200 a night (after the ++ rip off) good value given the country it is in and the local salaries.

I believe this to be a fact.

[lazeeboy]

I read that a number of the top hotels are returning to THB pricing because of the USD slide.

Personally, I thought they were severely underpriced from 10 years ago until about 3 or 4 years ago but have recently gone the other way and now offer very poor value for money. I do not consider a near USD200 a night (after the ++ rip off) good value given the country it is in and the local salaries.

I believe this to be a fact.

this year a hotel that has 70% occupancy can call themselves lucky .

[torrenova]

When they were around the 100 USD or less, many people used them for vacation stays but at near double that, they are not value options.

It appears that despite reduced occupancy and more rooms coming online next year, they will continue to increase rates. If so, I hope they get even less business.