|
More hotels coming on the market in Asian countries
Over 23,000 four and five star hotel rooms are expected to be
completed in Bangkok, Singapore, Hanoi, Ho Chi Minh and Kuala Lumpur by the end
of 2012, according to a new report published by CBRE Hotels.
“The nature of demand for hotels is notoriously volatile, with factors impacting
demand as varied as they are unpredictable,” said Robert McIntosh, Executive
Director, CBRE Hotels Asia. “Conversely, forecasting market supply is somewhat
easier, despite some uncertainty in construction timeframes.”
He believes that a greater choice of options tends to lead to an increase in
demand for hotel rooms. “The result is an increase in total tourism expenditure
compared to the position if the supply had remained static. This has positive
implications for employment, demand for airline seats and expenditure in
restaurants and other tourism attractions. However, extra supply does have a
negative impact on the performance of existing hotels as occupancy levels and
room rates tend to fall leading to decreased profitability.”
The actual number of rooms to be added is greatest in Singapore. Although the
increase in Hanoi is high in percentage terms it is not substantial in terms of
the total number of rooms.
Singapore will experience the largest number of addition hotel rooms of the five
cities, with nearly 10,000 four and five star rooms expected to open by the end
of 2012. Assuming all projects proceed, this represents a 39 percent increase in
supply over a relatively short period of time.
Hotel supply in Bangkok is expected to increase significantly, with over 6,000
four and five star hotels rooms set to enter the market by the end of 2012. This
represents an increase of 26 percent bringing the total supply of four and five
star hotels in the city to over 31,000 rooms.
“We believe three-star hotels in Bangkok will benefit from cost-cutting measures
being employed by both businesses and individual travelers this year,” says
Nabeel Hussain, Manager of CBRE Research in Thailand. “Branded budget hotels,
such as the Ibis and All Seasons chains, are well-positioned to take advantage
of this trend.”
In Vietnam, the existing supply of four and five star hotels in key cities is
relatively small compared to other markets. In Hanoi, new four and five star
hotel supply is expected to total nearly 3,000 rooms representing an increase of
75 percent. Whilst this appears high, the market is growing from a relatively
small base of just under 4,000 rooms (Singapore and Bangkok have over 30,000
four and five star rooms each). In Ho Chi Minh City, existing supply of four and
five star hotel rooms is expected to increase by 38 percent to reach a total
supply of over 7,000 rooms by the end of 2012.
The addition of new supply to these cities is essential in promoting further
development of the tourism industry and to ensure capacity exists to accommodate
future growth of visitor arrivals. This is particularly important in Ho Chi Minh
City which currently suffers from a shortage of supply.
Finally, the hotel market in Kuala Lumpur will experience a modest increase in
hotel rooms to the end of 2012, with the market set to increase by just ten
percent to reach 20,400 hotel rooms. While average room rates and occupancy
levels are less than those in Singapore, the relatively small increase in supply
is unlikely to pose a significant challenge to the market in the next couple of
years but it should help boost total tourism revenues.
The extent to which the additional supply will affect hotel performance will
vary from market to market. “While additional supply combined with the current
economic climate will likely lead to weaker occupancy levels in most markets in
the short term, the increase in capacity will benefit some markets in the long
term,” McIntosh said. (Source CBRE Thailand)
Q4 2008 a tipping point
for Phuket resort property
According to the latest issue of CB Richard Ellis’ Phuket Property Report, the
fourth quarter of 2008 marked a turning point for the island’s property market
in terms of price appreciation and take-up, as the forward momentum of the past
five years came to a halt due to the global recession. This has resulted in a
significant drop in transactions and project launches, while project
cancellations have increased considerably.
“In many ways, the Phuket property market is a foreign-driven market located on
a Thai island,” states David Simister, Chairman of CB Richard Ellis Thailand.
“The bulk of visitors, hotels guests and property buyers are all foreigners.
“While the slowdown, exacerbated by the forced closures of the airports, became
apparent in December, when the numbers of bookings, tourists and traditional
buyers of Phuket property all declined sharply, we do not expect the Phuket
market to follow Spain or Florida into a headlong crash, as there are
fundamental strengths to Phuket which differentiate it from other global resort
markets,” he said.
Among these fundamental differences is the fact that most completed projects in
Phuket have sold out almost all of their units, leaving limited supply. The
latest issue of the Phuket Property Report, an in-depth quarterly analysis of
the island’s property sector that the company markets to those interested in
resort development in Phuket, Thailand and the region, shows that, of a total of
almost 3,000 villa units in completed projects, 89% have been sold out. Figures
for the condominium sector are similar, where 92% of just over 2,000 units in
completed projects have been sold out.
Additionally, Simister argues that Phuket occupies a unique position among
South-east Asian resort markets as it is the premiere resort destination in the
region. Also, the expected growth in supply will be curtailed by the recent
project delays and cancellations, which should prove to be positive for the
island in the long run.
“Our earlier estimates called for as many as 1,700 condominium units to be
completed in 2009, but we believe a number of projects will be delayed due to
slower take-up rates. Similarly, in the villa market, we have identified over
ten projects with more than 450 units that went on hold or were delayed during
Q4 2008 alone, while it also appears that around a quarter of all upscale hotel
rooms under development are now on hold as well,” states Nabeel Hussain, Manager
CBRE Research.
Since the start of 2009, CBRE has noted some positive elements to the current
situation. These include the fact that tourist numbers remain among the highest
of any Asian resort and the lack of bank financed mortgages which have played a
significant role in the demise of other markets. As evidence of the island’s
popularity, they point to the fact that the Ibis Patong recorded 100% occupancy
during the first weekend in March, which is after the end of high season.
“In the long-term, we remain bullish on this market, since we believe that
buyers of luxury and high-end properties tend to make choices based on lifestyle
and not primarily on pricing. That being said, it is unlikely that demand for
these high-end properties will recover before the global economy improves. Our
view is that potential buyers who are able to view investment as discretionary
and having little significant impact on their wealth will still be interested in
the near-term,” added Simister.
“Our research has shown that the effects on each sector and price segment of the
island’s property market will be diffe rent. For an analyst, Phuket is the only
credible market with enough transactions to offer insight on the future of Asian
resort development. The Q4 report and the ongoing data collected in 2009 make
for interesting reading,” he concluded. (Source CBRE Thailand)
|
