Hotel Room Prices Decreasing Yet Developers Are Expanding

Hotels all over Thailand, regardless if owned by local investors or foreigners, are still undergoing expansions in order to meet the demand of tourism. This is despite the fact that the industry still struggles with the average room rate in the country since it has remained to be the lowest out of all the big cities in the region of Southeast Asia. These hotels are providing not just accommodation but other amenities such as one hotel with Italian grill in Rayong in order to offer guests with dining options.

The main reason for the continuous hotel expansion is the increase in the number of tourists coming from different countries as well as domestic travels. According to an estimate made by the Tourism Authority of Thailand, the country will be welcoming around 40.3 million international travelers in 2019. Local travelers, based on approximate by TAT, will be making a trip around the country 177 million times.

The last six months of 2018 is proof that there is still strong demand for hotels from foreigners and locals despite the decrease in the number of tourists coming from mainland China. Majority of the expansions are coming from domestic developers.

Moreover, local developers and investors have tried to improve their presence in the hotel industry through purchasing or improving their current assets. CBRE Asia-Pacific claims that tourism has more opportunities for growth compared to manufacturing which is originally the industry they are involved in.

International investors are also eyeing the hotel market of Thailand. In fact, a hotel operator based in Singapore recently signed a deal with a local hotel developer. InterContinental Hotels Group revealed that they are going to build eight more properties in key areas in Thailand – Koh Samui, Pattaya, Khao Lak, Phuket and Rayong.

Nikko Hotels International which is managed by a hotel chain operator in Japan also said that they are going to launch a new hotel in the capital early next year. With the growth, hotels are adding more to what they can offer such as Italian grill in Rayong in order for hotels to stand out among their competition.

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