Despite the decline the tourism sector has experienced since the military seized power in May, investors have concluded some big deals at hotels in Bangkok and major tourist destinations.
Andrew Langdon, executive vice president for the hotels and hospitality group at Jones Lang LaSalle (JLL), said Thailand remained attractive for hotel investment despite the drop in arrivals to the Kingdom in the wake of the coup on May 22.
“There are still many local and foreign investors looking for new investment in Thailand. We are now working on best investment solutions for them,” he said.
He added that JLL helped local investor reach two big deals just after the junta seized power from the elected government but declined to give further details.
However, a hotel analyst confirmed that the deals were Hilton Hua Hin Resort and Spa and a hotel in Bangkok’s Sukhumvit area. Hilton Hua Hin transferred ownership to a big local investor, while details about the property in Bangkok have not been disclosed yet.
Earlier, before the coup, JLL facilitated a transaction for a hotel in Khon Kaen in the Northeast, but it was not a big property.
Properties sold in Bangkok last year were Centre Point Saladaeng and the 108-room Swiss Park Hotel.
Also on the market with JLL are leasehold rights to the 243-room Ma Hotel Bangkok on Surawong Road, which may be expanded to 253 rooms. Another one is a 129-room international-brand serviced apartment complex.
Langdon said demand for hotel investment increased over the previous three years, and the situation now looked positive again as the political mayhem subsided.
JLL found that average hotel occupancy in Bangkok dropped by 50 per cent in the first half year on year, but surprisingly the average daily rate (ADR) grew by 2 per cent. Moreover, revenue per available room (RevPAR) at hotels in the capital grew by 25 per cent during the first six months. These figures showed that operators could manage their operating costs and keep rates high even during a crisis.
JLL has facilitated hotel transactions worth Bt25 billion over the past four years. Half of those properties were bought by foreign investors, particularly from Singapore, Malaysia and Hong Kong.
An investor from Malaysia bought Moevenpick Phuket, a Singaporean investor now owns Buddy Samui, and a Hong Kong investor bought Sofitel Silom in Bangkok.
According to JLL research, 4,857 rooms are expected to be added to the hotel market by the end of 2016. Most openings over the next three years will be concentrated in the upscale segment, with Sukhumvit being the most prominent location for new investment.
There will also be major renovation at Four Seasons Hotel Bangkok next year on a budget of Bt300 million. Minor International’s new brand Avani this year will take over management of the Atrium Bangkok.