Hotel brands keep coming to Thailand despite steep competition

The Imperial Queen’s Park Hotel on Sukhumvit Soi 22 was rebranded as the Bangkok Marriott Marquis Queen’s Park.

Hotel brands keep coming to Thailand despite steep competition

A lively conferences and exhibitions sector and a robust outlook for tourism lure investors unbowed by warnings of a price war.

American and Singaporean hotel brands are penetrating Thailand to cash in on growing tourism despite an expert warning that competition will heat up over the next 3-4 years.

Urban Hospitality Group managing director Wutthiphon Taworntawat said more local and international hotel investors are scheduled to open new hotels in Bangkok, especially in the Sukhumvit area.

“Hotels under construction in the Sukhumvit area include the Hyatt Regency, Hyatt Place, Ibis & Mercure, Singapore’s Carlton group and Japanese hotel Solaria Nishitetsu,” Mr Wutthiphon said.

Sukhumvit has grown into an enclave of high-end condominiums. It has long been the residential location of choice for expatriates. In recent years, with the development of upscale malls, office buildings, bars and restaurants, the venue has become increasingly popular among both leisure and business travellers.

Thai Hotels Association president Supawan Tanomkieatipume said hotel rooms in Bangkok are in oversupply, leaving many hotels unable to raise room rates for years due to tough competition. A price war is likely if more hotels open, she warned.
In July, Marriott International announced plans to open 17 hotels in Thailand over the next four years to ride a wave of popularity in the meetings, incentives, conferences and exhibitions (Mice) sector.

The hotels will operate through various (mostly luxury) brands in the company’s portfolio. Some projects have already been unveiled to the public, including the Surawong Road Marriott, the Marriott at Asiatique the Riverfront and a Marriott in Pattaya. All three developments are owned by drinks tycoon Charoen Sirivadhanabhakdi.

The Sirivadhanabhakdi family recently relaunched its flagship hotel, the Bangkok Marriott Marquis Queen’s Park — formerly the Imperial Queen’s Park Hotel. Queen’s Park is the first Marriott in Asia-Pacific to reach the Marquis category, with a focus on Mice.
The venue’s 21,336 square metres features 37 event rooms, 1,360 modern rooms and suites, and six restaurants.

Marriott runs 39 hotels in the country and nearly 550 hotels and resorts worldwide.

Earlier in June, US-based Cachet Hospitality Group said it is accelerating its business growth in the Asia-Pacific region.

Hoping to capitalise on the hotel segment for millennials, Cachet is working with local investors throughout the region to develop or operate more than 40 properties.

Some projects have reportedly been secured under management contracts such as the 138-room Cachet Resort Dewa Phuket, which is now being renovated and is expected to reopen in December.

In Bangkok, Cachet has signed a management contract with Cachet Deluxe Hotel, a 63-room hotel located in the mixed-use Smile Square complex being built on Phetchaburi Road.

The complex will also have a shopping plaza and commercial area, a 400-room hotel and a 208-room residential zone.
The entire project is set to open in 2019.

According to the recent research by JLL Hotels & Hospitality Group, direct investment in Thailand’s hotel sector reached 10.7 billion baht in the first half of 2017, attributable mainly to four major transactions that entailed five hotels in Bangkok and Pattaya.

In comparison, 2016’s full-year investment volume was only 9.6 billion baht.

The robust investment activity recorded in the first half reflects investors’ continued appetite for hospitality assets in Thailand and confidence in the long-term outlook for the country’s tourism industry, said JLL.

The buyers were both domestic and regional investors, with the latest hotel acquisitions being made by Carlton Hotel Group and Hotel 81, both based in Singapore.

JLL in June facilitated Hotel 81’s acquisition of the Premier Inn portfolio, including two hotels in Bangkok and Pattaya.

With a combined 388 rooms, the portfolio marks Hotel 81’s first venture into the Thai market. Hotel 81 has appointed budget hotel chain Travelodge to manage both properties.

The portfolio was the first overseas transaction made by Hotel 81, the largest owner of hotels in Singapore, according to JLL senior vice-president Chakkrit Paul Chakrabandhu Na Ayudhya.

In May, Carlton Hotel Group acquired a hotel-development project in Bangkok. Situated at the corner of Sukhumvit Road Soi 27, the property accommodates more than two rai of freehold land and a partial 34-storey hotel development.

JLL represented the seller, Bangkok Management Co, a subsidiary of Principal Capital, in this 2.4-billion baht transaction. Planned for completion in 2019, the 342-room hotel is expected to carry the Carlton Hotel brand.

The other hotels sold in the first half of 2017 are the Bangkok Edition Boutique Hotel and Swissotel Nai Lert Park, also in Bangkok. While the acquisition of the latter was announced in 2016, the transaction was only completed this year.

JLL expects 2017’s full-year hotel investment volume in Thailand to reach over 14 billion baht by the end of 2017.

Source: http://www.bangkokpost.com/business/news/1318655/hotel-brands-keep-coming-despite-steep-competition