Hotel slump may last two years

       Average occupancy at Bangkok's highend hotels will remain anaemic at about 50% to 60% for the next two years, says Jones Lang Lasalle Hotels.
       Bangkok has registered the most significant decline in average hotel occupancies across Asia, with the five-star segment contracting by 33.3% year-onyear in the first half.
       The global hotel investment services firm forecast occupancy rates at the city's four- and five-star hotels of between the low-50% and low-60% range over the next two years. Any recovery relies entirely on their being sufficient numbers of visitors to absorb new hotel supply.
       About 7,154 new international standard hotel rooms, representing an 11.2%increase in the Bangkok's total room supply, will come online within 2011.Of the total,50.7% is in the four-star segment, with the remaining supply evenly spread between three and five-star categories, said JLL.
       Weak international arrivals and an oversupply of rooms will create a very challenging environment from now until 2012, said the firm.
       Hotel developers will focus more on internationally branded and managed three-star limited service hotels, said Andrew Langdon, senior vice-president of Jones Lang LaSalle Hotels in Thailand.
       Average year-to-date occupancy rates for the five-star segment was 46.5%, down 23.4% year-on-year. Average daily rate (ADR) declined by 9.8% year-on-year,to 5,175 baht per room per night, with revenue per available room (RevPar) was down 39.7% to 2,430 baht.
       Four-star hotel average occupancy dropped to 50.8%, down by 20.5% yearon-year, with ADR contracting by 10.5%to 2,729 baht per room per night, with RevPar falling by 36.2% to 1,387 baht.
       Bangkok has registered the biggest decline in hotel occupancy in Asia, for the year up to June. The five-star segment contracted by 33.3% and the four-star by 28.8%. However, the decline in local average room rates appears to have eased when compared to the 20% and larger drops witnessed in Hong Kong, Singapore, and Beijing and Shanghai.
       The combination of ongoing domestic political uncertainty, the strengthening Thai baht and the global downturn has contributed to the 21.2% year-on-year decline of Bangkok's international visitor arrivals.
       The company projected hotel financing from Thai banks will remain challenging due to stricter lending criteria.However, a number of Thai groups have started investing in attractively-priced hotel properties
       outside of Thailand over the past 12 months. The firm expects this trend to continue into the second half.