Hotels in Thailand are starting to see the green shoots of recovery, following a dismal first half of 2014.
According to the full-year data from STR Global, the recovery began late in the third quarter of last year and “blossomed” in Q4, as guests started to return to the country following months of political strife.
Revenue per available room (revPAR) increased 2.5% year-on-year in the final quarter of 2014, and Bangkok‘s Q4 occupancy was the highest recorded by STR Global since 2006.
But this late surge couldn’t help Thailand’s hotel industry overcome such a poor first half, and the country ended the year with an overall occupancy decline of 11.3% compared to 2013.
This slide was largely driven by Bangkok, which bore the brunt of the year’s unrest. The Thai capital registered a 16.2% decline in occupancy last year, and for more than six months of the year it was down 20%.
In local currency terms, Thailand’s average daily rate (ADR) actually increased 2.6% in 2014, which is a positive sign that despite the declining demand, hoteliers did not resort to major discounting.
And STR Global also noted the “impressive” performance of Chiang Mai, which offset a 4.2% decline in occupancy with rising rates, which actually led to the city experiencing a full-year increase in terms of revPAR. Pattaya however, suffered more due to a 10% decline in occupancy.
The performance of Thailand’s hotel sector has been helped by the relatively slow expansion of room supply. STR Global said it “hasn’t seen such low supply growth in Thailand as a whole for 10 years”, with Bangkok being the main contributing market to that trend.