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Published on February 2, 2008

The projects are scheduled to open over the next three years, with a total of 5,054 rooms and a combined worth of more than Bt44 billion.

Of the development, the biggest portion will be located along Sukhumvit Road with seven hotels, followed by six hotels in the central business district of Silom and part of Rama IV Road.

Sathorn Road is another location for luxury hotels, with four new projects. Two high-end hotels are being developed on the river and two in other areas.

R Keith Humphreys, director of Colliers International, said many new international brands were set to operate in Thailand - Aloft, The Watts, Kempinski, St Regis, W Hotel and Four Points. Meanwhile local operators are planning to introduce S31, Siam on the River and Centara Group.

Humphreys said the development of the hotel business was divided into three categories: local investment, local joint ventures with foreigners and management by international chain operators.

"Many overseas investors - particularly from India, the Middle East and Asia - want to buy or invest in hotels in Thailand, as they foresee that the business has the potential to grow along with the tourism industry," said Humphreys.

CIT managing director Patima Jeerapaet said local and overseas investors believe that Thailand is an exciting opportunity for hotel investment despite its recent weak performance. The weakness was due mainly to political uncertainties, which placed considerable competitive pressure on operators. Patima said the formation of a new government should bring back international tourists along with investor and consumer confidence.

The group re-launched its hotel and leisure service unit in Thailand a year ago to serve the growing industry.

According to CIT, Bangkok's four- and five-star hotels have 11,582 rooms, with 4,880 in the 5-star category and 6,702 rooms in the four-star.

Risinee Sarikaputra, head of CIT's research department, said that by 2011 Sukhumvit would surpass the riverside area in having the highest concentration of 4- and 5-star hotel rooms in Bangkok, with 4,046 rooms, or more than double the room availability in 2007.

In terms of star rating, new developments in the five-star category are expected to outstrip the four-star by a ratio of 2.1 to 1, with some 3,478 new five-star rooms by 2011, or a 71-per-cent increase, as against 1,628 new 4-star rooms, or 24-per-cent growth.

"The huge increase in the number of luxury hotels will support Thailand's tourism industry shift to focussing on quality tourists with high purchasing power," said Patima.

Official figures from the Tourism Authority of Thailand (TAT) show continual growth in tourist arrivals.

However, the number of tourist arrivals at Bangkok hotels declined by 6.7 per cent year-on-year in 2007 from just over 10.5 million hotels guests at the end of 2006 to just over 9.5 million towards the end of 2007.

The drop in 2007 followed the September 2006 military coup and the 2007 New Year bombings as well as the economic slowdown during the past year. It is interesting to note that the average length of stay in Bangkok decreased from over two nights in 2003 to 1.83 nights in 2006. The length of stay is expected to remain the same for 2008 and 2009.

Of the total visitors, 52 per cent came from Asia, mostly from Japan, China and Singapore. The rest came from Europe, America and other parts.

The average occupancy rate in 2006 for the luxury segment dropped by 1.51 percent to 76.04 per cent from 77.55 per cent in 2005 and in 2007 by 4.99 per cent from 2006 to 71.05 percent.

However, the average daily room rate in 2006 rose by 8.4 per cent from Bt4,551 to Bt4,932 in 2005. In 2007 the rate rose to Bt5,010, an increase of 1.6 percent.

Patima added that with high levels of capital mobility, particularly in Asia-Pacific, investment funds are increasing their presence and actively competing for hotel assets, which are in limited supply.

Many players in the hotel sector who have not entered Thailand are now seeking to have a brand in the country.

Suchat Sritama

 The Nation