Hotels improve performance

Thailand hotels enjoyed an improved performance in August registering double digit occupancy based on revenue per available room in Bangkok and Phuket according to a report by STR Global Company released late last week.

The Asia Pacific performance report conducted by STR Global, claims Thailand gained the highest improvements in occupancy in the region; a 26.7% to 65.3% in Bangkok followed by Phuket, up 25.2%, to 71.8% when compared to August last year.

However, this should be tempered by the fact the country was suffering an unprecedented loss of hotel bookings in 2010 due to political discord and violent street protests.

Occupancy improvements around the region showed a 2% improvement in Australia (74.4%), 0.4% in China (65%) and 1.3% in Singapore (83.6%).

In terms of revenue per available room ( RevPAR), hotels in Bangkok and Phuket also reported improvements of 32.2% to Bt1,878.67 and Phuket up by 31.2% to Bt2,00.64 in August.

Thailand’s performance still lagged behind competitors in the region. Hotel earnings were well below Singapore and again political unrest and street violence that began in 2008 and continued through 2010 was the key factor in driving down hotel revenue.

Other key markets reported increases in RevPAR: Singapore (+8.4%; S$236.24); Australia (+6.5%; A$125.13); China (+4.3%; 483.96 yuan).

Bangkok hotels have also to contend with a huge increase in room capacity prompted by new properties joining the market and the inclusion of apartment rooms that are rented on a daily basis mainly to corporate travellers.

Unlike Singapore where new hotel development is controlled by the government through building permits, Bangkok is a free-for-all market where hotel investors routinely ignore common sense and market reports and build more hotels that suffer losses from the day they open until the banks reclaim them.

STR Global managing director, Elizabeth Randall noted in the report: “We see almost equal demand and supply growth across Asia Pacific, keeping occupancy levels steady for the moment”.

However, her comment is irrelevant to Bangkok’s situation as hotel building continues unabated without firm business justification.

“Average room rates continue to improve …. Looking at Japan, five months post 11 March, hoteliers reported 81% occupancy, matching August 2010 results. Demand is returning month on month and we would expect it to soon grow again against last year,” she added.

Markets that reported double digit decreases in occupancy rate were: Shanghai, China (-21.1%; 56.3%); New Delhi. India (-19.4%; 52.9%) and Jakarta, Indonesia (-13.4%; 51.7%).

In 2008 STR combined its non-North American operations with the two international leaders in the benchmarking arena, Deloitte’s HotelBenchmark and The Bench, to form STR Global.

STR Global track supply and demand data for the hotel industry and provides market share analysis for all major international hotel chains and brands.

Source - ttrweekly