Research by the hotels division of CBRE, the world’s largest real estate services provider, indicates that Bangkok hotels have, and are expected to continue to, perform exceptionally well.
The revenue per available room across Thailand has increased by a total of over 10% on average in the last two years. Whilst Hong Kong and Singapore have been relatively flat these figure beat countries like Malaysia and Vietnam and even Japan’s recovery from the Tohoku earthquake and tsunami.
The recovery since the Global Financial Crisis has been dramatic. At that time, occupancy rates fell to an average of close to 50% in Bangkok. By the beginning of 2011, these were still below 55%, but they have now accelerated to be around 75%.
Room rates are still similar to 2011 levels, having increased only between 5% and 10% over that period. Revenue per room, however, is up between 25% and 30% meaning that profits have increased by 50% to 100%. This suggests that there is now a real opportunity for operators to start to push rates upwards at peak periods.
At the same time, the level of investment in real estate across the Asia Pacific region has been increasing reflecting the growing wealth and the continued increase in real estate. Hotels have certainly been a beneficiary of this with a record level of hotel sales in Asia in the second quarter of 2013 at over USD 2.5 billion (THB 78.45 billion). The issue now for investors is finding quality hotels at reasonable prices.
Art Buser, Executive Managing Director of CBRE Hotels for Asia Pacific said, “The current market is dynamic and exciting with buyers and sellers in reasonable balance resulting in increased transactions. There was a short period when buyers were being wary of pricing in growth and vendors were overly optimistic, but there is more realism in the market. Given the positive outlook for Bangkok’s hotel performance we are confident that there will continue to be real interest in good quality assets. We are working closely with CBRE Thailand to assist both buyers and owners in identify opportunities”.
At a presentation in Bangkok to over 50 hotel investors and developers, Robert McIntosh, Executive Director CBRE Hotels Asia Pacific said, “The increase in visitors, particularly from China, coupled with Thailand’s excellent reputation for service and the increased supply of quality hotels means that tourism is set to grow yet further. The key driver behind this growth is the increased number of visitors to Thailand. These are up 20% for 2013 over the previous year. This is far better than the growth across Asia Pacific as a whole where the comparable figure is around 5%.”
(Source: CBRE Thailand)