Hua Hin Hotel Market Update May 2020
Hua Hin Airport’s expansion is key to unlocking the destination’s international tourism ambitions Pent-up domestic tourism demand expected to highlight hotel recovery storyline
Hua Hin Visitor Arrivals
“Hua Hin has continued its journey down a sustainable path of visitor arrivals with a 5-year CAGR of 6%. Post Covid-19 we expect Hua Hin to recover faster than other tourist destinations in the country, due to a locational advantage and close driving distance to Bangkok. With the domestic sector being the dominant source market accounting for 74% of the demand, the market-wide average room rate has held over the past few years and surpassed the THB4,000 level in FY2019. It is notable that other key resorts markets in Thailand have seen rates retreat, as rates have been marginalized by an appreciating baht and new supply. Two key infrastructure projects that will attract a broader tourism growth is the development of a high-speed rail system, and a double-track railway (60% completed). Moreover, a budget of THB350 million has been approved for Hua Hin Airport’s runway expansion and a new passenger terminal.
Trends
Others 11% Domestic 74%
International 26%
Asia 28%
Europe 61%
Source: : Thailand Ministry of Tourism and Sports and C9 Hotelworks Market Research. Data as of FY2018
With the launch of international direct flights from Kuala Lumpur by AirAsia since May 2018, Hua Hin’s Airport expansion project will enable larger aircraft. Hence, we expect to see low-cost airline carriers implement direct routes from regional markets such as Mainland China, India, and ASEAN countries once completed.” Bill Barnett, Managing Director, C9 Hotelworks
Forward Outlook
•
In 2019, Hua Hin Airport hosted 44,613 passenger arrivals via AirAsia direct flights from Kuala Lumpur, Malaysia.
•
Two new hotels, the U Hua Hin and Veranda Resort and Spa Hua Hin which were expected to open in Q1/Q2 this year has been postponed.
•
Emerging international markets from Asian countries with y-o-y growth were led by Taiwan (23%), Hong Kong (19%), and Japan (19%).
•
There are five new hotels, totaling 1,627 keys in the accommodation pipeline, with most of these in the midscale segment.
•
Domestic visitors are the main market feeders through direct FITs, OTAs, and MICE segment. Overseas guests are leveraged with European wholesale FITs and Chinese tour groups.
•
Escalating number of long-stay visitors amplifies demand for villa rentals, with many seasonal travelers who are ‘snowbirds’ or winter visitors from Europe.
TOURISM Visitor vs. Seasonality Trend Average Rainfall (mm)
Number of Visitors 500,000
300
School Break
School Break
400,000
240
300,000
180
200,000
120
100,000
60
0
Domestic visitors during school holidays in April and October spike demand
0 Jan
Feb Mar Apr May 2016
2017
Jun
Jul 2018
Aug
Sep
Oct
Nov Dec
Average Rainfall
Source: Thailand Ministry of Tourism and Sports and C9 Hotelworks Market Research
Top 5 International Markets
Top 5 Asian Markets
Top 5 European Markets
U.K.
-6%
U.K.
-6%
Mainland China
+11%
Germany
-0.5%
Germany
-0.5%
South Korea
+7%
Mainland China
+11%
Sweden
-3%
Japan
+19%
Sweden
-3%
Denmark
-5%
Hong Kong
+19%
Denmark
-5%
Finland
-4%
Malaysia
+7%
Source: Thailand Ministry of Tourism and Sports and C9 Hotelworks Market Research. Data as of FY2018
Visitor Average Length of Stay (ALOS) No. of Days 6 5 4 3 2 1 0 2012
2013
2014 Phuket
2015 Phang Nga
2016
Hua Hin
Source: Thailand Ministry of Tourism and Sports and C9 Hotelworks Market Research
2
C9 Hua Hin Hotel Market Update: May 2020
2017
2018
Hua Hin has a shorter ALOS, but domestic visitors have longer stays on public and school holidays
HOTEL OVERVIEW Occupancy
Average Daily Rate
RevPAR
%
In THB
100
4,500
50
3,000
3%
0
%
3,000
100
2,000
50
60%
0
1,500
In THB
-50 2018
-4%
1,000
0
0
2019
-50 2018
2019
Source: STR. Data as of FY2019
Market-wide ADR hit THB4,049, with a y-o-y growth of 3%
Occupancy reduced in H2 vs. previous year resulting in a 5% y-o-y decline
RevPAR dropped y-o-y by 4% due to lower demand
Hotel Supply Growth & Pipeline No. of Keys
Registered Accommodation Establishments
15,000
450
10,000
300
5,000
150
0
Registered accommodation in Hua Hin totaled 12,050 keys in 2019
0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021* 2022* Keys
Accommodation Establishments
Source: Thailand Ministry of Tourism and Sports and C9 Hotelworks Market Research. *2021 – 2022 projected
Tourism Expenditure
Accommodation by Type
20% 31%
27%
Accomodation
41%
Guesthouses
F&B Expenses
11%
Shopping 15%
23%
Bungalows and Villas
Entertainment Others
32%
Registered Hotels
Source: Ministry of Tourism and Sports and C9 Hotelworks Market Research
C9 Hua Hin Hotel Market Update: May 2020
3
About C9 Hotelworks C9 Hotelworks is an internationally recognized consulting firm with extensive experience in the Asia Pacific region. Its core business focus includes: • • •
Hotel and Resort Development Asset Management / Ownership Representation Project Feasibility and Analysis
Key competencies include international hotel operator search, selection and contract negotiation, mixed use hotel and residential planning and operation reviews. A wide range of both institutional and private developers and a comprehensive portfolio of completed projects give C9 the skill set and background to focus on key issues, evaluate complex ones and assist clients in achieving solid results. Based in Phuket, Thailand and led by Managing Director Bill Barnett, who has 30 years of experience in Asia Pacific, the firm is well positioned to serve an increasing demanding marketplace.
C9 Hotelworks Company Limited 9 Lagoon Road, Cherngtalay, Thalang, Phuket, 83110, Thailand (Office located at the entrance of Laguna Phuket) T: +66(0)76 325 345 www.c9hotelworks.com info@c9hotelworks.com