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Pattaya Hotel Market 2009

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  • 8/3/2019 Pattaya Hotel Market 2009


    MarketReearchPATTAYA HOTEL MARKET OVERVIEW | 1 sT HAL | 2009


  • 8/3/2019 Pattaya Hotel Market 2009


    Th Kwd Rprtco l l i e R s i n T e R n aT i o n a l | T H a i l a n D

    PaTTaYa HoTel MaRKeT oVeRVieWThe Pattaya hotel market is still suering rom last Novembers airport closure in Bangkok and romthe more recent political unrest in April. Hotel operators are expected to suer even more ollowingthe global economic crisis and panic over the type-A (H1N1) inuenza pandemic.

    Tourists and investors have chosen to holiday and invest in other countries, as they have lost all

    confdence in Thailand ollowing the recent fascos. It is noted that the occupancy rate in Pattayahas dropped sharply due to visitors rom key destinations such as China, Russia, Taiwan and Europeavoiding the city in large numbers. However, tourists rom India and other neighbouring South EastAsian countries continue to arrive in volume.

    Pattaya has the resilience to bounce back rom this downturn, just as it has done so in the past. Thecity has a good inrastructure which includes several international standard hospitals, schools andgol courses, well renowned sporting and yachting acilities, together with world class shopping,dining and entertainment venues. Pattaya will always pull through a crisis and go on to attractmillions o visitors rom all over the globe, mainly due to the wide array o attractions and servicesavailable to tourists.

    However, it must not be orgotten that in recent years along with the citys incredible growth hascome poor quality zoning and management. Pattaya city desperately needs to address its zoning

    issues in order to improve upon its current global and domestic image o sleaze and crime, i it wantsto attract more sophisticated and auent visitors.

    Pattaya has recently welcomed much needed investment rom the Thai government to include aboat pier, cultural events, music estivals, motor racing, a convention hall, a new public hospitaland low cost housing. These eorts will no doubt bring about optimism in Pattaya once again andwe expect to see a growth in visitor numbers towards the end o this year, bringing with it a muchneeded kick start to the local economy.

    It should also be considered that i urther political tension and violence reveals itsel once more, ithas the potential to bring lasting damage not only to Pattaya, but to the entire Thai tourism industryas a whole.

    MaRKeT inDicaToRs

    1H 2009 2H 2009F



    occUPancY RaTe

    eRage DailY RaTe


    PaTTaYa H oTel M aRK eT | 1 s T H a l F | 2 0 0 9

    Ptty w wy pu thruh r d t ttrt m vtr rm vr th ,my du t th wd rry ttrt d rv v tturt.

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    sUPPlY TRenDs

    Hotel LocationsOur study ocuses on the major areas o hotel accommodation in

    Pattaya, which can be subdivided into fve main areas:

    1. North Pattaya is the area to the north o Pattaya Nua. It isdivided into a larger northern section that spans the areas to theeast o Naklua Beach (the most northern beach). This area isconsidered a peaceul location, and current developmentsin the area are Centara Mirage Beach Resort and HolidayInn Pattaya.

    2. Central Pattaya is located alongside the city centre,covering the section o beach rom Central Road(Pattaya Klang) south to Pattaya Tai and the entranceto Walking Street.

    3. South Pattaya is the area rom the border o CentralPattaya to the Bali Hai pier and is adjacent to the coreo Pattayas busy nightlie area. This area is popularamong Middle Eastern, South Asian and Russianvisitors.4. Pratumnak Hill is the area coveringthe main thoroughare connectingPattaya and Jomtien Beach.

    5. Jomtien Beach is about 1 kmsouth o Pratumnak Hill. Thearea is home to many high-rise

    condominiums, beachront hotels,shops and restaurants. The area at thebeginning o Jomtien is considered busy,while the area at the end o this beach,called Na Jomtien, is considered peaceuland tranquil. There are many plots ovacant land available at Na Jomtien or uturedevelopment.

    Th Knwdg Rprt | 1t H | 2009 | Ptty Ht Mrkt

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    Th Knwdg Rprt | 1t H | 2009 | Ptty Ht Mrkt

    There will be approximately 40,076 hotel rooms in Pattayain all grades by the end o 2009. The number o roomsincreased by 4.89% compared to 2008, representing 1,526

    rooms by the year end. During the frst hal o 2009,there were 604 hotel rooms added. It was reported thatapproximately 893 rooms closed or renovation in 2008.

    Source : Thai Hotels Association (THA), Tourism Authority o Thailand (TAT) & Colliers International Thailand Research

    FigURe 1 : PaTTaYa HoTel RooM sUPPlY, 2009F

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    Future Supply

    Pattaya is the provinces commercial tourist and residentialproperty investment centre. It is approximately 147 km romBangkok and is Asias premier beach resort, catering with equalappeal to those in search o a relaxed tropical ambience, whichis synonymous with every ingredient needed or a memorableholiday. Theme and amusement parks, obeat museums andlush botanical gardens oer numerous orms o leisure activities

    and cultural entertainment or the whole amily. In addition tobeing one o the countrys top water sports destinations, thereare over 20 championship-standard gol courses in the area.An additional 1,562 hotel rooms added to the supply betweenJuly 2009 and 2011, while a urther 500 rooms will be added in2015.

    During the frst hal o 2009, there were 39,154 hotel rooms, themajority o hotel rooms (9,622) are located in South Pattaya,ollowed by Central Pattaya and North Pattaya, with 7,566 and

    7,470 rooms, respectively. Due to such completed acilitiesas shopping malls, international restaurants and beaches,hotel developers are keen to develop properties in the area.

    Source : THA, TAT & Co lliers In ternational Thailand Research

    Source : Colli ers International Thailand Research

    FigURe 2 : PaTTaYa HoTel RooM sUPPlY bY locaTion, 1H 2009

    FigURe 3 : FUTURe neW sUPPlY oF HoTel RooMs, 2H2009-2015F

    Th Knwdg Rprt | 1t H | 2009 | Ptty Ht Mrkt

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    Table 1 : PaTTaYa HoTels scHeDUleD FoR coMPleTion, 2H2009-2015F

    No. HoTel NaMe locaTioN No. of RooMs esT. coMPleTioN

    1 ctr Mr bh Rrt (st) Wmrt 555 2009

    2 Hdy i Ptty nrth Ptty 367 2009

    3 ctr Ht & Rrt (Ht) ctr Ptty 340 2010

    4 MbK Prprty Dvpmt ctr Ptty 500 2015

    5 Th cv Wmrt na na

    6 Rft Jmt na na

    Source : Colli ers International Thailand Research

    DeManD TRenDs

    The global slowdown has put the tourism industry in Thailandand around the world in the doldrums. Thailand has experienceda large decline in hotel occupancy in many regions and touristarrivals have allen sharply. However, the economic problemshave been exacerbated by Thailands political conicts, whichled to the week-long closure o Suvarnabhumi Airport in late-November/early-December 2008. The economic slowdown willprompt companies to cut corporate travel, meetings and incentiveexpenses. On the other hand, it is possible that many companieswill relocate conerences to this region to beneft rom cost savings.

    We believe that, during these difcult times, many companieswill still be proactive in training sta and implementing team-building activities as this will be a good opportunity to prepareor the return o stronger revenues and growth cycles. Thus,we see potential or the meetings, incentives, conerences andexhibitions (MICE) sector in the Japanese and other marketswhere currencies are weak against the US dollar and the Euro.

    Th Knwdg Rprt | 1t H | 2009 | Ptty Ht Mrkt

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    International Tourist Arrivals to accommodation at Pattaya

    Ofcial fgures rom the Tourism Authority o Thailand (TAT)reveal that the number o international tourist arrivals to Pattayadeclined by as much as 37% in 2008, down rom around 5.83

    million in 2007 to 3.69 million in 2008. It is orecasted that theinternational tourists arrivals Pattaya will be decreased by 20%rom 2008, to 2.95 million persons.

    From the breakdown o international travelers in accommodationin Pattaya, visitors rom East Asia (Japan, China), South Asia(India), South East Asia (Malaysia, Singapore), Europe (Germany,

    the UK, France), the USA, Australia and the Middle East madeup the majority o inbound travelers to Pattaya. Approximatelyhal o the total came rom Europe in 2008.

    FigURe 4 : inTeRnaTional ToURisT aRRiVals aT HoTels in PaTTaYa, 2002-2009F

    FigURe 5 : inTeRnaTional ToURisT aRRiVals aT HoTels in PaTTaYa bY Region, 2008

    Source : Ofce o Tourism & Colliers International Thailand Research

    Source : Ofce o Tourism & Colliers International Thailand Research

    Th Knwdg Rprt | 1t H | 2009 | Ptty Ht Mrkt

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    occUPancY anD RooM RaTes

    Average Length of Stay

    The average length o stay in Pattaya decreased rom 3.0 nightsper guest in 2002 to 2.57 nights in 2004. Ater a slight revival to

    3.09 nights in 2005, the average is orecasted to all to 2.30nights in 2009.

    Occupancy Rates

    The average occupancy rate at Pattaya hotels ell to 55.12%in 2008, with the downturn particularly pronounced in thefnal quarter, when occupancy was only 25%, well below

    the normal average o 75% in that period. As a result, theaverage occupancy rate in the hotel sector is orecasted to be38.6% in 2009.

    FigURe 6 : aVeRage lengTH oF sTaY oF inTeRnaTional ToURisT aRRiVals aTHoTels in PaTTaYa, 2002-2009F

    FigURe 7 : aVeRage occUPancY RaTes FoR PaTTaYa HoTels, 2002-2009F

    Source : Ofce o Tourism & Colliers International Thailand Research

    Source : Ofce o Tourism & Colliers International Thailand Research

    Th Knwdg Rprt | 1t H | 2009 | Ptty Ht Mrkt

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    Room Rates

    The Average Daily Rate (ADR) o hotels in Pattaya reveals a biggap. The lowest ADR is less than THB1,000 per night and thehighest is over THB4,500 per night. The majority o hotels in

    Pattaya, approximately 18,336 rooms, have an average ADR lessthan THB1,000 per night.

    The ADR o 4-star hotels is the range o THB2,500-3,500 pernight, while that o 5-star hotels is higher than THB3,500 pernight.

    Business travelers, especially rom the Asia-Pacifc region,are more price-conscious than ever beore and are spendingmore prudently. Corporate expenditure, such as on travel andentertainment, is now being scrutinised more closely. During thiscurrent situation, many hotel operators are applying price-

    cutting strategies. When operators start to cut prices, it is otendifcult to increase the rates back to their prior levels becausecustomers expectations change. The successul and surviving

    hotels are those that oer attractive promotions to potentialcustomers. Promotions and price cuts are dierent strategies.One o the most important actors is to cater to the needs obusiness travelers who will be making ewer, shorter and cheapertrips during the slowdown. Hotel operators should, thereore,ocus on value-or-money packages.

    FigURe 8 : aVeRage DailY RaTes aT PaTTaYa HoTels, 2008

    Source : Ofce o Tourism & Colliers International Thailand Research

    Th Knwdg Rprt | 1t H | 2009 | Ptty Ht Mrkt

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    The economic mainstay o Pattaya is tourism and over the past ten years, thenumber o tourists has jumped sharply rom 3.0 to 8.0 million. Pattaya is currentlygoing through difcult times, as are many other markets, and its strength is as a

    resort city that is able to attract a higher number o tourists than Phuket and Samuicombined. I U-Tapao Airport had direct ights rom Hong Kong, we would see ahuge resurgence in the Pattaya market.

    Pattaya has the right environment or branded resorts, with the Bang Saray area,located south o Jomtien Beach, ideal or high-end resort developments. Inact, Bang Saray is superior to Phuket because o its proximity to SuvarnabhumiInternational Airport, yet has similar topography to the southern island, withmountains, beaches and very lush vegetation. Moreover, Pattaya is set to welcomea comprehensive master plan that promises to transorm the resort city into anorderly, green and clean destination. Thus, we believe that, in the near uture,the number o international visitors to Pattaya could top 12 million. Pattaya alsowelcomes repeat visitors who oil the engine o the local economy.


    The hotel rating used in our research is based solely on property rating and achievedrates obtained rom market research. The rating system used in our report is notthat o Colliers International.

    conTacT inFoRMaTion

    THailanD:Patima JeerapaetManaging Directorcr itrtbkk o:17/F Ploenchit CenterKlongtoeyBangkok 10110Tel: 662 656 7000Fax: 662 656 7111

    Ptty o:492/2 Thappraya RoadNongprueBanglamungChonburi 20150Tel: 6638 364 411Fax: 6638 364 414

    Risinee SarikaputraDirector | Research

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    294 oFFices in 61 coUnTRieson 6 conTinenTs

    Usa 94canaDa 22laTin aMeRica 17

    asia PaciFic 64eMea 97

    Us$ 1.6 billion in annUal ReVenUe1.1 billion sqUaRe FeeT UnDeRManageMenT12,700 PRoFessionals

    Th Knwdg Rprt | 1t H | 2009 | Ptty Ht Mrkt

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    www.co l l i e r . co . th

    Thi report and other reearch material may be ound on our webite at www.collier.co.th Quetion related toinormation herein hould be directed to the Reearch Department at the number indicated above. Thi documentha been prepared by Collier International or advertiing and general inormation only. Collier International makeno guarantee, repreentation or warrantie o any kind, expreed or implied, regarding the inormation including,but not limited to, warrantie o content, accuracy and reliability. Any intereted party hould undertake their owninquirie a to the accuracy o the inormation. Collier International exclude unequivocally all inerred or impliedterm, condition and warrantie ariing out o thi document and exclude all liability or lo and damage ariingthere rom Collier International i a worldwide afliation o independently owned and operated companie