Bangkok Hotels Take a Hit; ADR Growth in Resort Markets

It will come as no surprise that hotel performance in Bangkok has been negatively affected by the recent political turmoil, but the rest of the country seems relatively unscathed.

This is just one of many key facts shown in the latest Asia Pacific hotel performance report produced by STR Global and Horwath HTL that has been released this week.

Other key points in the report show that regardless of the unrest, all markets in Thailand managed to make year-on-year gains in average room rate for the first quarter, with the luxury sector making the biggest gains, although at the expense of occupancy.

On the supply side, the upscale segment is expected to experience the most significant growth in the country, with the pipeline showing the majority of these coming in the branded segment.

Ambika Gandhi, the consultant at Horwath HTL who co-wrote the report said, “The results show a resilience of a market place that has perhaps become used to the short term impact of political unrest. What is also clear is that these impacts have had far less effect on regional Thailand, which has a very strong leisure industry. We expect to have a much clearer view of what the rest of the year will be like once the elections have taken place in July.”

Elizabeth Winkle, managing director of STR Global, said, “Bangkok has suffered the most significant declines in demand of all Thai markets with demand down almost 30% in Q1, while ADR remained flat for the capital. With declining demand, we would expect ADR to begin to weaken unless the political unrest comes to an end. Contrary to the trends in the capital, the resort markets have seen a strong increase in ADR, most significantly in the Luxury segment, leading to a positive RevPAR performance for these markets.”