THE DOWNSIDE OF HOTEL OVERSUPPLY
While an abundance of new locations works to the advantage of tourists in keeping rates down, developers are finding it difficult to recoup their investment and also to keep skilled staff By Aliwassa Pathnadabutr
- Published: 26/02/2012 at 03:22 AM
- Newspaper section: Business
Those living in Bangkok will surely notice that there is a new hotel opening almost every month on average. Many may wonder why the city's hotel supply keeps growing given the frequent talk of oversupply, without any signs of slowing down. As of the third quarter of last year, there were a total of 30,815 hotel rooms in downtown Bangkok and a further 8,664 rooms in the pipeline to be completed by 2014, representing a 28% increase in existing supply.
The majority of future supply consists of three- to four-star hotels, totalling 6,050 rooms in 24 hotels. In the five-star segment, while the right site in a prime location is a prerequisite for success, there are still 2,131 rooms in seven hotels in the pipeline, including W Hotels, Hotel Okura and Park Hyatt (at Central Embassy).
As tourism is one of Thailand's key industries, with consistent growth and significant government support, many developers and investors are keen to invest in it to reap the benefits. Last year, tourist arrivals topped 19 million, a 19% increase from 15.9 million in 2010. Despite the flood crisis running into the high season and travel warnings against Bangkok issued by various governments, Thailand ranked fourth in Asia in arrivals last year.
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