Room prices fall in Koh Samui

HOTEL rates in Koh Samui saw a drop in the first half of this year, although unprecedented occupancies resulted in an overall growth in RevPAR.

Market-wide room occupancy in Koh Samui peaked in the first half of 2012, the best six months since the global financial crisis of 2008.

Data collated by C9 Hotelworks recorded 67 per cent occupancy for 1H2012, compared to 59 per cent for the same period last year, driving average RevPAR up by 12 per cent in 1H2012, despite a one per cent decline in ADR to US$144.

“Many resorts have dropped rates because the market is very competitive with a lot of big brands coming in,” said Manish Jha, general manager, Anantara Bophut Resort & Spa, Koh Samui.

“We realised that by dropping rates and creating value, we could generate volume. ADR at my resort fell five per cent year-on-year, and as a result occupancy increased from 71 per cent in the first half of 2011 to 83 per cent in 2012. As a result, RevPAR surged 16 per cent,” he added.

The upscale segment reported 73 per cent occupancy, followed by midscale and luxury hotels at 69 per cent and 59 per cent respectively. The budget segment lagged behind at 52 per cent, suffering from a lack of budget airline access to the island.

Increased arrivals, partially driven by improved connectivity between the island and key regional hubs of Singapore, Malaysia and Hong Kong, also boosted occupancy, rising 16 per cent year-on-year. International arrivals jumped 25 per cent, with strong growth from traditional European markets, pushing up the average length of stay from 4.8 to 5.5 days.

Bill Barnett, managing director, C9 Hotelworks, said growth was sustainable in the long term.

“The development pipeline is limited to just a few properties over the coming years, and air connectivity is likely to improve. Meanwhile arrivals should continue to grow, lured by branded properties and destination fatigue in longhaul markets to places like Bali and Phuket,” he explained.

Jha shared his optimism, but was more cautious in his assessment. “Obviously 16 per cent growth in arrivals cannot hold, and this will probably drop to around four per cent growth through the next year.”

Sourced: TTG Asia