Thai hotels face stiff competition

01 Mar 2017  2069 | World Travel News

BANGKOK Kasikorn Research Centre estimates Thailand’s hotel sector will generate THB560 to THB574 billion this year in gross revenue, an increase of 3.7% to 5.5% year-on-year, despite growing competition.

The bank’s think-tank  said competition in the hotel business continued to heighten in 2016, with more hotels in the pipeline.

“Now, as existing hotel operators carefully weigh their moves, new entrants venture into the market through mergers and acquisitions, bringing in new investment.”

It said there are more newcomers who are seeking opportunities to cash in on Thailand’s success in tourism, there are also large-scale conglomerates in the property sector making plans as well.

“This group will be pivotal to hotel investments during 2017,” the bank said predicting more new hotels will open and this will intensify competition. Occupancy rates and room rate hikes will therefore be under pressure in 2017.

For three-star or lower hotels, the competition is already fierce, since they all seek to attract mid-level tourists. To aggravate competition in the hotel market, certain conglomerates in the energy and retail businesses – as well as others – are also investing in new hotels, it said.

“Tourism in 2017 is expected to continue its momentum over 2016, for both Thai and foreign visitors. The recovery of events, meetings, seminars and weddings could bring in good earnings for venues.”

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