Drop in occupancy rates expected at Bangkok luxury hotels

The global economic downturn, anti-government protests and an oversupply of rooms will have a negative impact on Bangkok’s luxury hotels during the final months of 2008 and into next year, according to Knight Frank Chartered (Thailand), a Bangkok-based property agency.

Early signs began to appear earlier in the year, when for example, international arrivals at Bangkok’s international airport showed only a 1.2 per cent increase over the second half of last year, at 8.3 million passengers. The increase was attributed to a small bump in both business and individual arrivals, according to Knight Frank.

The company added that an oversupply in the number of four-star and five-star hotel rooms was starting to add to the problem.

During the first half of 2008, the new Centara Grand at CentralWorld added 505 rooms to Bangkok’s upscale hotel market, bumping the five-star hotel room supply to 7,574, which was an increase of 7.1 per cent over the last six months of 2007. The supply of rooms in the four-star market remained unchanged at 12,083.

Knight Frank cited the world economic downturn as a major factor affecting the tourism industry, leading to cuts in business travel and meetings during the first half of 2008.

In Bangkok, the five-star hotel occupancy rate averaged 70.8 per cent for the first half of the year, which was down 1.9 points from the last half of 2007. For the same period, four-star hotel occupancy was down 2.4 points, to 70.2 per cent.

www.knightfrankthailand.com