Bangkok's hotel market has been thriving and the trend will likely continue well into the next decade given the approved aviation reform and fast-growing tourism sector.
“We are positive about prospects in the Bangkok hotel market. Thailand’s tourism boom is likely to continue and generate consistent demand for hotel accommodation in the city in the foreseeable future,” said Frank Sorgiovanni, Head of Research Asia Pacific at JLL’s Hotels & Hospitality Group.
Mr Sorgiovanni’s view is supported by a number of recent good news for Bangkok. Data from the Tourism Authority of Thailand shows the number of international visitors to the capital city reached 20.8 million in 2016, representing annual growth of around 7.5%, and are likely to rise further.
In the Euromonitor International's 100 Top City Destinations Ranking 2017, the city is second only to Hong Kong, said Mr Sorgiovanni.
As far as air connectivity is concerned, the Thai government's recent approval for an aviation reform plan is more good news. It will enhance the country as a regional hub with some 400 billion baht to be invested over the next decade into airport infrastructure. This will more than the double annual passenger capacity to 277 million.
"Over the past several years, the hotel and hospitality sector in Thailand has benefited greatly from the fast growth of the country's tourism industry. Improved international air connectivity, specifically the proliferation of regional low-cost carriers, has contributed a lot to this growth," he said.
With the aviation reform plan in place, Thailand is more fortunate than many of its peers in the region in this aspect as air traffic in Asia-Pacific is expected to surpass those in Us and Europe, he continued.
Asia's aviation sector is expected to continue but its pace is likely to stagger as aviation infrastructure is not keeping stride, with many Asian airport hubs already operating well above capacities, Mr Sorgiovanni added.
In Bangkok, the future expansions of Suvarnabhumi and Don Mueang airports are expected to facilitate the strong growth of visitor arrivals. However, the major airport reform is countrywide with the upgrade of 10 regional airports and 26 city airports also planned, with a combined investment cost of 86 billion baht.
Over the next decade, forecast arrivals at Suvarnabhumi are expected to double from 45 million tourists now. Don Mueang could handle some 40 million passengers, up from 30 million currently, while U-Tapao airport, which primarily services Pattaya, may record 30 million. This is astounding growth given U-Tapao could serve up to 3 million passengers a year when its current expansion is completed by 2019.
Airport reform aside, the increase of international arrivals is further supported by the government's tourism campaigns on various destinations and, importantly, recent changes involving free visas or reduced visa fees, along with the extension of long-stay visas to 10 years from one. This is great news for Bangkok and the future looks bright for the tourism sector in Thailand more broadly, Mr Sorgiovanni concluded.