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With 12,000 New Rooms Planned for 2013-2014, Thailand's
Capital, Bangkok, Faces Future Hotel Room Glut

By Peter Janssen, dpa, BerlinMcClatchy-Tribune Regional News

Sept. 07, 2011--BANGKOK -- Thailand's capital Bangkok faces a looming oversupply of hotel accommodation in 2013-14, when 12,000 new rooms come on the market, a leading property consultant warned Wednesday.

Despite low occupancy rates and zero hotel property sales last year, when Bangkok's tourism industry was hurt by street protests, investments in new hotels have continued apace, Jones Lang LaSalle property consultant said.

The new properties will add 12,000 rooms to the existing 50,000 already available in the capital, said Mike Batchelor, investment sales managing director at Jones Lang LaSalle Hotels.

New investors are attracted to hotels, rather than office or retail properties, because they see growth potential in Thailand's tourism industry, Batchelor said.

"The problem is a lot of people see this as an option, and there have been too many hotels built in the short-term, so it may be three to four years before we see the slack taken up," he said.

Prospects for hotel property sales have improved as tourist arrivals picked up this year.

During the first seven months of 2011, an estimated 11.2 million tourists visited Thailand, compared with 8.8 million during the same period last year.

In Bangkok alone, arrivals were up year-on-year almost 30 per cent to 7.4 million as of July, Jones Lang LaSalle estimated.

Since the start of the year, there have been 2 billion baht (66.7 million dollars) worth of hotel property transactions in Bangkok and 1.5 billion (50 million) on the resort island of Phuket.

"The only sales that have taken place have been from institutions or corporate clients, not from your traditional Thai owners," Batchelor said of hotel property sales this year.

It is rare for Thai hotel owners to sell their properties, no matter how bad the market is.

"Most of them invest on a generational basis, to pass on to a family member, and they just don't sell, good times or bad," Batchelor said.

Last year, when Bangkok was rocked by violent street protests between March 12 to May 19 which left 92 people dead and parts of the city in flames, there were no major hotel sales in the capital.


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