Chiang Mai Hotel Market Update March 2017
Low-cost carriers push total airport arrivals to Chiang Mai past 4.5 million threshold Thai travelers made up 71% of hotel demand last year
Thai Provincial Airport Passenger Arrivals Number of Passengers 8,000,000
“Chiang Mai trails only Phuket in airport traffic compared to other Thai destinations outside of Bangkok. In 2016, it hosted a total of 4,664,938 inbound passengers which highlighted year-on-year growth of 13%. The uptrend in airlift has been stimulated by international demand, which showed a compound annual growth rate of 44% for the past five years. This segment began to surge in 2011, with traction coming from Greater China. A strong shift in overseas source markets was due to media exposures in 2012, which popularized the destination amongst Chinese visitors due to the success of the Lost in Thailand film. Although domestic arrivals expanded at a more moderate pace with CAGR averaging 18% from 2012 to 2016, the sector featured 439,561 incremental travelers last year. This is largely attributed to the increase of low-cost carriers, which added a total of 903 flights during the year.
Trends
7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2012 Chiang Mai
2013
2014
Phuket
2015
Krabi
2016 Surat Thani
Source: Chiang Mai Provincial Office and C9 Hotelworks Market Research
We foresee solid demand from the broader market, with LCCs expected to add new routes to the destination. As we move through early 2017, the impact of Thailand’s crackdown on zero-baht Chinese tours is expected to ease and foreign arrivals normalize.
Bill Barnett, Managing Director, C9 Hotelworks
Forward Outlook
•
Thailand’s Ministry of Tourism and Sports estimated total tourist arrivals grew 3.65% last year, with strong domestic uplift offset by a slight contraction in foreign travelers.
•
Plans for the upgrading of Chiang Mai International Airport includes runway expansion and terminal extension, which will increase total capacity to 20 million passengers by 2030.
•
In 2016, Hong Kong, Shanghai, Chongqing and Chengdu were amongst the top feeder cities from Greater China, with 5,346 direct flights routed between the region and Chiang Mai.
•
An intercity motorway project connecting Chiang Mai to Chiang Rai is currently under review by the Highway Department, with a potential commencement by 2020.
•
Hotel average daily rate market-wide increased to THB3,385 according to STR, as occupancy was slightly down due zero-baht tourism crackdown.
•
Increasing flights from domestic airports and new international routes will enhance Chiang Mai as a leading gateway for the Mekong region.
TOURISM Airline Indicators • In 2016, a total of 4,664,938 passengers arrived at Chiang Mai International Airport, 77% of which were from domestic routes and 23% from international flights. Chiang Mai Airport Domestic & International Arrivals Number of Passengers
Number of Flights
400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0
3,000 2,500 2,000 1,500 1,000 500 0 Jan
Feb
Mar Apr May 2016 Domestic Arrivals 2016 Domestic Flights
Jun
Jul
Aug Sep Oct Nov 2016 International Arrivals 2016 International Flights
Dec
Source: Airports of Thailand and C9 Hotelworks Market Research
Top 5 Key Geographic Source Market Trend Number of Passengers 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 Mainland China
Malaysia
South Korea
Hong Kong
United States
2014
2015
Top 5 overseas source markets accounted for 78% of total arrivals last year
2016
Source: Chiang Mai Airport Immigration and C9 Hotelworks Market Research
Airport Arrivals and Inbound Flights from Greater China Number of Passengers
Number of Flights
1,200,000
10,000
1,000,000
8,000
800,000
6,000
600,000
4,000
400,000
2,000
200,000 0
0 2012
2013
2014
Arrivals from Greater China Inbound Flights from Greater China
2015
2016
Total International Arrivals Total International Inbound Flights
Source: Airports of Thailand and C9 Hotelworks Market Research
2
C9 Hotel Market Update: March 2017
Arrivals from Greater China saw the highest growth in 2013 by 235% due to impact of Chinese film Lost in Thailand
HOTEL OVERVIEW Hotel Performance RevPAR increased to THB2,502 despite lower occupancy due to a 6% uplift in ADR
Performance Comparison 2016 vs. 2015 In THB
%
4,000
77 76 76 75 75 74 74 73 73 72
3,500 3,000 2,500 2,000 1,500 1,000 500 0 2016
2015 RevPAR
ADR
Occupancy Source: STR
Hotel Supply • Currently, Chiang Mai has a total of 33,593 keys in 831 registered and unregistered tourist accommodation establishments. An additional 524 keys are expected to come on stream by 2019, with the majority of pipeline properties concentrated in the Old City catchment area. Hotel Supply Growth
Room inventory per hotel is scaling down with trend towards boutique hotels and hostels
In THB
%
40,000
10 5
30,000
0
20,000
-5
10,000
-10
0
-15 2012
2013
2014
2015 Total Keys
2016 Growth Rate
Source: Thailand Ministry of Tourism and Sports
Hotel Name
Location
Keys
Opening Date
Suriwongse Hotel Chiang Mai
Changklan Road
36*
2018
X2 Chiang Mai Riverside
Charoen Rat Road
33
Nov-17
Shama Chiang Mai
Huaykaew Road
45
Apr-17
Icon Park Hotel
Manee Nopparat Road
60
Nov-17
U Nimman Chiang Mai
Nimmanhaemin Road
150
Mar-17
Dusit Princess / Dusit Residence
Nimmanhaemin Road
200
2019
*Additional keys for existing hotel
Source: C9 Hotelworks Market Research
C9 Hotel Market Update: March 2017
3
Chiang Mai’s Tourism: A 10 Year Perspective (2007-2016) 10 Year Growth in Domestic and International Passenger Arrivals Number of Passengers
%
Between 2008-09, international tourism dropped temporarily due to political issues
4,200,000 3,600,000 3,000,000 2,400,000 1,800,000 1,200,000 600,000 0
80 60 40 20 0 -20 -40
2007
2008
2009
2010
2011
2012
Domestic Arrivals Domestic Arrivals Growth Rate
2013
2014
2015
2016
International Arrivals International Arrivals Growth Rate
Passenger Arrivals on Full Service Carriers vs. LCCs
38% Full Service Carriers 62% Low-Cost Carriers
Over the past 10 years, total passenger arrivals to Chiang Mai have increased by nearly
3X
Data as of FY2016
CAGR from 2007 to 2016 for hotel room supply averaged 5% while airport arrivals grew by 12% per year
Top 5 Markets at Tourist Accommodation Establishments
2015
2007
1.
Thailand
1.
Thailand
2.
Mainland China
2.
Malaysia
3.
Japan
3.
France
4.
United States
4.
Germany
5.
France
5.
United States
Source: Thailand Ministry of Tourism and Sports, Airports of Thailand and C9 Hotelworks Market Research