Koh Samui air access hits hotel performance

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Koh Samui’s four-year hotel building boom is threatening to undermine the destination’s long-term success, as supply outstrips a demand hamstrung by severely limited air access, according to a report released today by hospitality consulting firm C9 Hotelworks.

Samui Hotel Market Update 2010 reveals that oversupply and limited access heavily impacted last year’s operating performance for hotels on the island, with marked declines in occupancy (seven percent), average room rates (15 percent) and RevPAR (26 percent) compared to 2009.

C9 Hotelworks managing director Bill Barnett explained: “Private sector development in the hospitality sector has surged well ahead of transportation infrastructure improvements, which has caused the market to go into a tailspin.”

Located in an international flight corridor requiring low landing levels, coupled with environmental restrictions allowing only 36 flights a day and a runway length unable to handle larger aircraft, the long-term potential of the destination is effectively capped, especially with no airport expansion or relocation plans in the pipeline.

Comparing the destination to the more developed markets of Phuket and Bali, Barnett added that what was clearly missing in Koh Samui were high-demand generators such as regional low-cost carriers and charter flights. (TTG Asia)