Samui hotels cash in on tourism boom

Samui hotels cash in on tourism boom

Occupancy reaches 73% as visitors soar

While the political turmoil has damaged the Bangkok hotel market, Koh Samui hotels have suffered only minimal impact and continue to enjoy strong occupancy rates, according to the latest research by JLL’s Hotels & Hospitality Group.

Tourism in Koh Samui remains healthy with minimal impact from Thailand’s political turmoil and slowing economy, says a research house.

"Koh Samui's hotel market has remained relatively robust compared with Bangkok where demonstrations concentrate. The average hotel occupancy rate in Samui reached a record of 73% last year, growing by around 5% from 2012," said executive vice-president Andrew Langdon.

The growing prominence of Surat Thani airport as a secondary gateway to Samui has helped fuel demand for hotels.

Visitor arrivals to Samui airport last year grew by 14.5% from 2012 to 1.5 million. However, the average length of stay on the island has been declining as a result of the growth of short-stay visitors from the region.

Hotels' average daily rate (ADR) recorded growth of 1% to 3,940 baht last year after declining from 2008-12. Largely driven by strong occupancy, revenue per available room grew by 8.9% to 2,870 baht last year.

Samui has about 20,000 hotel rooms, but the supply pipeline will slow over the next three years and be largely concentrated in the mid-scale to upscale segments.

With its strong trading performance, Samui's hotel market attracts investors. However, limited investment-grade hotels are available for sale. Last year, only one Samui hotel was sold —Buddy Oriental Samui Beach Resort, a four-star, 133-room hotel sold by JLL.

Bhundari Spa Resort and Villas is currently for sale and being marketed by JLL. The 126-room hotel is offered for sale by tender and has received strong interest from investors.

"While the major source of demand for hotels on Koh Samui are tourists from Europe, we anticipate continued emergence of short-stay demand from key Asian source markets," said Mr Langdon.

"In addition, the China, Russia and India visitor markets are likely to be the strongest growth markets in the medium term.

"With healthy demand fundamentals and slow growth of new supply, we anticipate a positive occupancy outlook for 2014 with a moderate increase in ADR."

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