Thailand Key Hotel Market Trends & Outlook - November 2021 - Horwath HTL
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Thailand
Key Hotel Market Trends & Outlook
November 2021
Thailand Key Hotel Market Trend & Outlook
Horwath HTL Methodology
Analyze historical performance, demand characteristics, travel Review existing supply and pipeline to
01 and tourism drivers for Thailand relative to global markets
03 identify trends and model supply outlook
Historical Reopening and Historical Historical RNA
ADR Vaccination Progress RNO Source: STR
Source: STR Source: TAT and Our World in Data Source: STR &
Horwath HTL
Estimate Room Additions to Hotel Markets
Forecast hotel performance based on historical statistics, Source: Horwath HTL
02 recovery patterns, demand growth by segment & nationality
Forecast RNO Forecast RNA
04 Use RNO and RNA to calculate market occupancy
Forecast ADR Forecast Occupancy %
05 Check for anomalies and draw conclusion
2022 THAILAND HOTEL MARKET OUTLOOK
Note: RNO = Room Night Occupied, RNA = Room Night Available, ADR = Average Daily Rate
© 2021 Horwath HTL 2
Thailand Reopening & Vaccination Progress
Reopening Plan Update • The Thai authorities expect one million tourist
arrivals from November 2021 to March 2022. For
• The kingdom has reopened its doors to fully the first half of November, a new record of 50,000
vaccinated travellers from 63 countries without a visitors is a big improvement from 100,000 visitors
quarantine requirement since November 1, 2021. through various entry schemes during January-
The list includes a majority of Thailand’s October. The Phuket Sandbox program in
important source markets, such as China, the particular attracted 60,000 visitors from July to
U.S., the UK, and many European countries. October, with the top five markets being the U.S.,
Israel, the UK, Germany, and France.
• Besides full-dose vaccination, the Thailand entry
checklist includes additional screening measures: • However, the travel and tourism industry should
1. A stay in the listed 63 countries for the past 21 be mindful of inconsistency and uncertainty of
consecutive days; restrictions across countries. China and Australia,
2. Negative PCR test result within 72 hours for example, have maintained border closures
before departure; over travel to Thailand. Reciprocal free travel
3. PCR test upon arrival; and between Thailand and any countries depends on
4. Medical insurance with a coverage of USD both the achievement of national vaccination
50,000. coverage and the governments’ sentiment
towards the pandemic.
• Fully vaccinated travellers from countries that are
not on the exemption list will be able to choose Vaccination Progress
from the 17 ‘Blue Zone’ destinations (expanded
coverage from the Sandbox model), including • Thailand has started COVID-19 vaccination since
Bangkok, Phuket, Pattaya and Hua Hin, for a February, 2021. As of October 31, around 11.5
seven-night mandatory stay within the destination million (16 percent) of the Thai population are
before travelling to other parts of the country. partly vaccinated and 30.7 million (44 percent) are
fully vaccinated. The inoculation rate accelerated
• A ten-day quarantine measure remains in place in the second of half of 2021 and, since October,
for unvaccinated travellers. around 600,000 to 800,000 doses are
administrated daily. The vaccines used are mainly
• A night-time curfew (11pm to 3am) was lifted Sinovac/Sinopharm (49 percent) and Astra
nationwide except for 6 high risk provinces, which Zeneca (45 percent). mRNA makes up a small
are not tourism hotspots. Meanwhile, a temporary fraction of 6 percent.
ban on night entertainment has been extended to
mid January. • The government aims for 100 million doses or 50
million fully vaccinated people, a 70 percent target
© 2021 Horwath HTL for national immunity, by the end of 2021. 3
Global Pandemic Situation at a Glance
As of October 31, 2021
Europe
Vaccination Rate: 55%
Total Cases (millions): 65.38
Cases per Million People: 87,292
Death Rate%: 2.0%
North America
Vaccination Rate: 52%
Total Cases (millions): 55.28
Cases per Million People: 92,666
Death Rate%: 2.0% Asia
Vaccination Rate: 43%
Total Cases (millions): 79.37
Cases per Million People: 16,964
Death Rate%: 1.5%
South America
Vaccination Rate: 52% Africa
Total Cases (millions): 38.37 Vaccination Rate: 6%
Total Cases (millions): 8.50 Oceania
Cases per Million People: 88,369
Cases per Million People: 6,188 Vaccination Rate: 48%
Death Rate%: 3.0%
Death Rate%: 2.6% Total Cases: 260,526
Cases per Million People: 6,028
Death Rate%: 1.1%
Vaccination Rate
© 2021 Horwath HTL Source: OurWorldindata.org 4
Pandemic Situation in Thailand vs. Key Source Markets
As of October 31, 2021
China 75% 10% 85% 97,320 67 4.8%
Total Cases Cases per Mil People Death Rate
United Kingdom 67% 6% 73% 9.1 M 133,424 1.6%
Total Cases Cases per Mil People Death Rate
United States 57% 9% 66% 46.01 M 138,195 1.6%
Total Cases Cases per Mil People Death Rate
Thailand 44% 16% 60% 1.91 M 27,334 1.0%
Total Cases Cases per Mil People Death Rate
Europe 55% 5% 59% 65.38 M 87,292 2.0%
Total Cases Cases per Mil People Death Rate
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Share of people fully vaccinated Share of people only partly vaccinated
© 2021 Horwath HTL Source: OurWorldindata.org 5
Pandemic Situation in Thailand vs. Key Source Markets
Vaccinations vs. Deaths – January 1, 2021 to October 31, 2021
20
Daily new COVID-19 deaths per million people
15
10
5
0
0 40 80 120 160
January 1, 2021 Total vaccination doses administered per 100 people October 31, 2021
UK China US Thailand Europe
© 2021 Horwath HTL Source: OurWorldindata.org 6Thailand Hotel Performance Trends
Occupancy ADR
• As in many tourism-dependent countries, • The nationwide ADR in Baht dropped by 9
Thailand’s hotel market has been hit hard by the percent in 2020. Phuket’s unusually high ADR
COVID-19 pandemic. In 2020, hotel occupancy was led by a peak season in Q1 before COVID-
dropped sharply by 44 percentage points 19 hit the world. With strong domestic support,
nationwide. Pattaya and Hua Hin benefitted from Hua Hin maintained its ADR level. Meanwhile,
strong domestic demand and were able to volume driven markets like Bangkok and Pattaya
achieve relatively higher occupancies compared continued to register rates below the nationwide
to Bangkok and Phuket. These two world-famous average. Bangkok’s ADR took the most severe
destinations are vulnerable to international hit as its shortfall was more significant than in any
demand volatility. of the three markets.
• With a series of major outbreaks and lockdowns • As of YTD August 2021, ADR weakened further
in 2021, Pattaya and Hua Hin could not sustain across all four markets, to a larger extent for
Bangkok their occupancy levels. A downfall was more Phuket and Bangkok. Phuket’s rate fell by 46
apparent in Pattaya while Hua Hin was better at percent YOY as its focus switched to the
Pattaya containing the spread. As of YTD August, domestic market. Bangkok’s rate slid by 33
Pattaya and Phuket’s occupancy levels were percent YOY and was ranked at the bottom due
below the nationwide average. Despite the mass to low-rate quarantine business.
Hua Hin vaccination coverage and the launch of Phuket
Sandbox model by July, complicated travel
measure and low season weather deterred RevPAR
holidaymakers from spending time in Phuket. On
the other hand, Bangkok and Hua Hin recorded • The nationwide RevPAR declined significantly
superior occupancy levels, attributed to from THB 2,329 in 2019 to THB 848 in 2020, by
quarantine and domestic vacation demand 64 percent.
respectively.
Phuket • As of YTD August 2021, a further decline to THB
391 was recorded. In comparison to 2019 level,
RevPAR was down by 83 percent.
© 2021 Horwath HTL Source: Google Images 7Thailand Hotel Performance Trends
Performance Snapshot, 4 Key Markets, 2019 to 2021 YTD August
THB 4,500
THB 4,000
Phuket Hua Hin
Hua Hin
THB 3,500 Phuket
Hua Hin
ADR
THB 3,000 Bangkok
Pattaya Pattaya
THB 2,500 Bangkok
Phuket
THB 2,000
Pattaya
Bangkok
THB 1,500
0% 10% 20% 30% 40% 50% 60% 70% 80%
Occupancy
YTD 2021 2020 2019
© 2021 Horwath HTL Source: STR and Horwath HTL Analysis 8Thailand Hotel Performance Trends
Occupancy & Recovery Index Comparison, 4 Key Markets, 2019 to 2021 YTD August
Occupancy Recovery Index Against 2019 Level
© 2021 Horwath HTL Source: STR and Horwath HTL Analysis 9Thailand Hotel Performance Trends
ADR & Recovery Index Comparison, 4 Key Markets, 2019 to 2021 YTD August
ADR Recovery Index Against 2019 Level
© 2021 Horwath HTL Source: STR and Horwath HTL Analysis 10Thailand Hotel Performance Trends
RevPAR & Recovery Index Comparison, 4 Key Markets, 2019 to 2021 YTD August
RevPAR Recovery Index Against 2019 Level
© 2021 Horwath HTL Source: STR and Horwath HTL Analysis 11Thailand vs. Global Comparison
• Several factors come into play for the healing of Latest news showed the widespread emergence of
the travel and tourism industry, which could turn Delta variant in China and sudden outbursts in many
into a gradual and lengthy process. Looking at the parts of Europe such as the UK, Germany and
global hotel market, a recovery journey is Austria. The uncertainty raised a public concern over
contingent on not only vaccination progress, but vaccine efficacy against new variants and the
also the relaxation of movement control and border readiness of health care system in handling a new
restriction. Air connectivity and travel procedures, normal of living with COVID-19.
such as the EU Digital COVID-19 certificate, play
important roles in influencing a return of travellers. ADR
• Demand in the early stage of the world’s reopening Overall, rate recovery appears to be weak to mild
is mainly from domestic and short-haul regional across most hotel markets while they are rebuilding
travels. China benefited from keeping opulent occupancy. Without high yielding international
tourism demand within the country. Singapore rode demand, Thailand and Singapore saw ADR plunging
out the pandemic with quarantine and staycation through 2021.
bookings on the back of its relatively small market.
Specifically for the U.S. and Europe, a strong The only exception, Maldives drove 2020 and 2021
summer travel season signalled a market rebound. YTD ADRs up from the pre-pandemic level mainly
due to high season performance in Q1.
• On the contrary, Maldives’ success story hinged on
its first mover advantage to consolidate beach
vacation demand while access to tropical islands RevPAR
around the world remained tightly controlled. Its
promotion of winter escapes strongly appealed to Maldives is one of the pioneers to successfully open
the European market, particularly Russian- up for foreign travellers even when it had not
speaking countries. The number of visitors from achieved herd immunity. Its focus on tranquil getaway
this region in 2021 exceeded a pre-covid level. experience is compatible with social distancing norms
and isolation requirements.
• However, during a transition period, several
frontrunning countries on the national vaccination The U.S. and China were able to curb the virus
coverage experienced a subsequent surge in new spread and stabilize domestic activities for the most
cases after the easing of travel precautions. They part of 2021, resulting in a quick RevPAR turnaround.
went back into another lockdown, which became a
setback for the hotel market. Examples include In contrast, Thailand was ambushed by the Delta
The UK, UAE and Maldives. variant and entered another long lockdown while
ramping up inoculations, hurting 2021 RevPAR.
© 2021 Horwath HTL Source: Google Images 12Thailand vs. Global Destinations
5 Select Markets, Occupancy & Recovery Index Comparison, 2019 to 2021 YTD August
Occupancy Recovery Index Against 2019 Level
© 2021 Horwath HTL Source: STR and Horwath HTL Analysis 13Thailand vs. Global Destinations
5 Select Markets, ADR & Recovery Index Comparison, 2019 to 2021 YTD August
ADR Recovery Index Against 2019 Level
© 2021 Horwath HTL Source: STR and Horwath HTL Analysis 14Thailand vs. Global Destinations
5 Select Markets, RevPAR & Recovery Index Comparison, 2019 to 2021 YTD August
RevPAR Recovery Index Against 2019 Level
© 2021 Horwath HTL Source: STR and Horwath HTL Analysis 15Thailand Demand and Supply Factors
Demand and supply trends in Thailand and a broader However, some headwinds listed below are inevitable.
global context are taken into consideration to determine
where the Thailand hotel market is heading in 2022. • Gradual return of international demand has been
evident from the Phuket Sandbox Model on the
The following positive movements in Thailand and its back of tedious and unclear travel procedures as
key source markets will stimulate demand growth. well as additional travel costs from testing and
insurance requirements;
• Thailand’s reopening to fully vaccinated travellers
from countries on the quarantine exemption list. • China, the largest single source market for
Such a bold move is expected to induce demand Thailand, is likely to keep its border closed until
from key source markets that have scaled back the National Congress in October 2022. Another
border restrictions such as the U.S., the UK and major demand source for Thailand beach resorts,
Europe; Russia is not on the quarantine exemption list in
the meantime due to low vaccination rate;
• Pent-up demand and the upcoming high season.
Several industries and affluent business people • Vaccine efficacy against new variants, uncertainty
are not affected by the COVID-19 situation and of vaccine immunity period and risk of subsequent
have a high propensity to spend; outbreaks as evident across the world;
• Thailand’s full-dose vaccination rate is expected to • Competition from destinations that have recently
reach 70 percent by end-2021 and higher levels in followed Thailand’s restriction easing; and
main tourism spots;
• Supply pressure on occupancy and ADR growth
• Domestic corporate and leisure demand boosted from newly constructed hotels, alternative
by travel stimulus packages (so-called in Thai accommodations (e.g. condotels and room
“Rao Tiew Duay Gan”); rentals) and reopening of hotels that were closed
during the pandemic.
• Further improvement of immunization coverage
globally and green shoots evident in the U.S. and Going forward, it is expected that transient demand,
Europe; and particularly among leisure travellers, will enjoy the
most significant recovery in 2022. Meanwhile, group
• Appreciation of major currencies against Baht. demand will likely be sourced from the domestic
corporate market. International corporate and leisure
groups from China, South Korea, Japan and India
show no sign of immediate return.
© 2021 Horwath HTL 16Demand Characteristics
Business Mix (LHS) & Nationality Mix (RHS), 2019
Business Mix Nationality Mix
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Bangkok Pattaya Hua Hin Phuket
Transient Group Others
© 2021 Horwath HTL 17Supply Pipeline
By Opening Year (LHS) & By Positioning (RHS)
New Hotel Rooms by Opening Year 2022 New Supply by Positioning
5,000
Luxury
4,500
4,000
Upper
Midscale & Upper Upper
3,500 Below Upper Midscale & Upscale &
Upscale & Below Upscale
3,000 Upscale
2,500
2,000
Bangkok Pattaya
1,500
1,000 Luxury
500
0
Upper
Bangkok Pattaya Hua Hin Phuket Upper Upper Upscale &
Midscale & Luxury Midscale & Upscale
2019 2020 2021 2022 Below Below
© 2021 Horwath HTL Hua Hin Phuket 18Supply Movements
Total Room Nights Available, YOY Change, 2018 to 2022
40%
Bangkok Pattaya Hua Hin Phuket
30%
20%
10%
0%
-10%
-20%
-30%
-40%
2018 2019 2020 2021 2022
© 2021 Horwath HTL 192022 Thailand Hotel Market Outlook
Thailand’s continued efforts in achieving herd Despite a strong domestic support and a relatively
immunity and reopening for a much needed moderate supply increase, Pattaya is expected to
international support, on top of optimism in major pick up even more slowly, due to its heavy reliance
advanced economies, show a glimpse of hope that on Asian markets and group demand. According to
the country is coming out of the pandemic. In our the International Air Transport Association (IATA),
opinion, the overall hotel market is also expected to Asia’s regional travel is anticipated to be relatively
bottom out, but its initial recovery is known to be sluggish due to the modest easing of border controls.
slow and unsteady. The market performance is Uncertainty looms over outbound travels from China
unlikely to return to a pre-COVID level in 2022. and India, which have proven to be a strong base for
Pattaya in normal days.
Hua Hin is expected to lead the performance in
both occupancy and ADR in 2022, driven by the The recovery of Hua Hin and Pattaya will drive
first wave of returning Europeans on the back of its growth in Bangkok, the gateway to Thailand.
strong reputation among locals. The domestic However, it will inevitably face supply challenges
market makes up at least one-third of total demand. similar to Phuket i.e. a massive supply pipeline and a
Additionally, the commercialization of the Hua Hin full resumption of existing hotels’ operation. Like
International Airport will make Hua Hin “open to the Pattaya, the capital will endure a slow recovery in
world” and thus attract more foreign visitors who Asian markets, particularly group demand. The two
prefer relaxed and peaceful holidays with local negative causes will exert an enormous pressure on
lifestyles. Bangkok’s occupancy and ADR growth.
As the very first Asian resort destination to open up,
Phuket should witness a relatively strong
international demand rebound in the high season,
especially with the reopening of Phi Phi islands
after a two-year rehabilitation. However, it is
anticipated that Phuket’s recovery pace will be
slower than Hua Hin’s due to a rapid increase of
new supply, the reopening of existing hotels that
previously suspended operation, and limited
demand from two major source markets, China and
Russia.
© 2021 Horwath HTL 20Thailand Hotel Market Outlook Forecast vs. Historical Performance, 4 Key Markets, 2019 to 2022 © 2021 Horwath HTL Source: STR and Horwath HTL Analysis 21
Thailand Hotel Market Outlook
Occupancy Forecast, 2022
2019 2022 Forecast
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Bangkok Pattaya Hua Hin Phuket
© 2021 Horwath HTL 22Thailand Hotel Market Outlook
ADR Forecast, 2022
2019 2022 Forecast
THB 4,000
85-95%
Recovered
THB 3,200 80-90%
Recovered
75-85% 80-90%
THB 2,400 Recovered Recovered
THB 1,600
THB 800
THB 0
Bangkok Pattaya Hua Hin Phuket
Exchange Rate: EUR/THB=36.9715
© 2021 Horwath HTL 23Thailand Hotel Market Outlook
RevPAR Forecast, 2022
2019 2022 Forecast
THB 2,500
THB 2,000
THB 1,500
45-60%
Recovered
THB 1,000
30-45%
25-40% Recovered
Recovered 25-40%
Recovered
THB 500
THB 0
Bangkok Pattaya Hua Hin Phuket
Exchange Rate: EUR/THB=36.9715
© 2021 Horwath HTL 24Authors
Nikhom Jensiriratanakorn (aka Nick) is a Director Vicky Jian is a Project Director of Horwath HTL, based in
of Horwarth HTL. Nikhom has advised both local the Singapore office. She joined Horwath HTL in 2014
and international investors in the Thailand after graduating from the School of Hotel Administration
hospitality sector and extends oversight to the at Cornell University. Since then, she has worked on
Indochina region. more than 50 hotel related assignments in 8 countries
across the Asia Pacific region, including Maldives,
He has brought with him comprehensive skills in Indonesia, Malaysia, Vietnam, Thailand, China,
feasibility analysis, investment underwriting and Philippines, and Singapore. She has strong experience in
asset management, as well as years of conducting feasibility studies, valuations, repositioning/
experience with hotel management companies, renovation studies, and destination master planning.
investment funds and consulting firms, namely
Pan Pacific Hotels Group, Jumeirah Group, Host Vicky’s expertise is in market and financial feasibility and
Hotels and Resorts and PricewaterhouseCooper valuation for resort destinations, which involves market
Thailand respectively. research, site inspection, competitor analysis, best-use
Nikhom Jensiriratanakorn Vicky Jian facility recommendations and financial projections. She
Director Project Director also manages the Horwath HTL Annual Benchmarking
Horwath HTL Thailand Horwath HTL Singapore Studies, which cover 15 Asian markets with a total of
nikhom@horwathhtl.com vjian@horwathhtl.com approximately 2,500 hotels and serviced apartments
participating every year.
© 2021 Horwath HTL 25Horwath HTL
At Horwath HTL, our focus is one hundred percent Our Expertise: Horwath HTL Thailand
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who have successfully carried out over 30,000 Bangkok, Thailand
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We are part of Crowe Global, a top 10 accounting Horwath HTL Singapore
and financial services network. We are the number • Expert Witness & Litigation
15 Scotts Road, #08-10/11,
one choice for companies and financial institutions • Tourism & Leisure Thong Teck Building,
looking to invest and develop in the industry. Singapore
• Hospitality Crisis Management
We are Horwath HTL, the global leader in hotel, +65 6735 1886
tourism and leisure consulting.
www.horwathhtl.asia
© 2021 Horwath HTL 26Thank You
Africa
Rwanda
South Africa
Asia Pacific
Australia
China – Beijing
Europe
Andorra
Austria
The Netherlands
Poland
Latin America
Argentina
Brazil
North America
Atlanta, GA
Denver, CO
China – Hong Kong Croatia Portugal Chile Los Angeles, CA
China – Shanghai Cyprus Russia Dominican Miami, FL
China – Shenzhen Germany Serbia Republic New York, NY
India Greece Spain Mexico Norfolk, VA
Indonesia Hungary Switzerland Orlando, FL
Japan Ireland Turkey Canada – Montréal
Malaysia Italy United Kingdom Canada – Toronto
Middle East
New Zealand
Singapore UAE and Oman
Thailand
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