Hotels in Bangkok saw a significant decline in performance during the first quarter of 2014, as protests continue to hit the city’s tourism industry.
According to the latest data from STR Global, Bangkok’s occupancy has fallen more than 30% in the past year, from 79.7% in Q1 2013 to just 55.2% in this first quarter of this year.
This was driven by a 29.3% drop in demand for hotel rooms in the city, and while operators were able to limit the decline of rates (ADR fell just 0.6% to THB3,222 (US$99)), revenue per available room slumped 31.2% to THB1,778.
“The hotel industry in Bangkok has taken a hit as a result of the political unrest,” said Elizabeth Winkle, managing director of STR Global. “2013 was a good year for hotels in Bangkok, however 2014 is off to a rough start for the market. In February and March, Bangkok reported the lowest occupancy figures since August 2010. The greatest concern is the uncertainty of how long the conflict will last.”
The positive news however, is that Thailand’s major resort destinations only experienced a slight fall in occupancy in Q1. Hoteliers also increased rates to compensate for the falling demand, which resulted in higher revPAR in these markets.
Resort destinations like Koh Samui and Phuket traditionally command higher rates than Bangkok and the recent unrest has increased the gap even further. Rates in Koh Samui in Q1 2014 were nearly three times higher than in Bangkok.
Overall however, Thailand’s performance in Q1 has been dampened by Bangkok, as demand fell 16.6% and the country reported the lowest occupancy levels (65.7%) of any first quarter since 2009.
This negative performance follows a strong year for Thailand’s hotels in 2013. Last year the country posted growth in occupancy (+6.3%) and ADR (+6.5%), driving revPAR up 13.2%.
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