Investors are interested in acquiring hotels in Thailand for a number of reasons. These reasons include lower capital values, relatively higher yield returns whether the opportunity for the incoming investor to add value and the long term prospects or the outset of the investment in Thailand’s tourism industry than in more developed market such as Singapore or Hong Kong.
The initial investment destinations for investors mostly cover the main Bangkok, Phuket, and Samui markets. Chiang Mai, Pattaya, KhaoLak, and Krabi come under secondary markets which also attract some investors.
Bangkok, one of the most visited cities in the world remains Thailand’s most attractive hotel investment destination attracting both leisure and corporate travelers all year round. In Bangkok, investor demand for assets has driven asset prices ever higher in spite of a huge amount of new supply of hotel rooms of a hotel in the prime Sukhumvit area.
Phuket has also proven to be an extremely flexible market in recent years. This happened when JLL advised resort transactions on nine resorts deals for a combined volume of approximately THB 14.8 billion. Investors are attracted to Phuket due to the growing infrastructure of direct airlift that is available to Phuket International Airport (PIA) which isolates the market from disturbances in Bangkok.
For instance, in 2014, the protests caused visitor arrivals to drop by 11.3 percent when compared to 2013. Compared to Bangkok, expansion of PIA’s capacity, road infrastructure and the ability to achieve a higher yield return will make it as one of Asia’s investment hotspots.
Other than these two, Samui is also a good investment destination. It is named more ‘boutique’ destination rather than the ‘mass tourism’ characteristic of Phuket as its limited airlift and high airfares resulting in some of the highest Revenue per Available Room in Thailand. The arrival of Suratthani as a low-cost airport hub has also increased access to Samui. This is the main thing that supported the growth in the number of visitors to the island.
Also, new resorts construction presents a favorable environment for hotel investors investing in Samui. Currently, a number of resorts in Samui are being marketed for sale by JLL which have received strong interest from investors. There is an abundance of opportunities and operating costs are relatively low.
Moreover, the airports of Thailand have achieved new records during the year 2015. The country has six main airports which made a new record of the number of passengers. The count reached to around 110 million travelers last year. The Don Mueang Airport, terminal 2 which has been renovated, is now formally working to handle a larger number of passengers i.e. up to 30 million which was around 18.5 million till last year.
Also, there are reports that the pending expansion project of Phuket airport is to be completed soon. This will double the total passenger processing capacity annually from approximately 6 million to 12 million. The Tourism Industry of Thailand is very strong in spite of facing huge challenges.
The country of Thailand is highly optimistic and hopeful for the coming years as the number of tourists visiting the Thai Kingdom is continuously increasing. The Hospitality Industry of Thailand also offers good opportunities for career development in the international hoteliers.