February 14, 2022
JLL
Ease of travel restrictions will lead to a brighter tourism market outlook and more participation of foreign investors this year
The latest report from property consultant JLL reveals that Thailand saw 23 hotels sold in 2021 with approximately 3,000 keys and a combined transaction value of THB 13.2 billion. This represents an increase of 550% from 2020 and 30% over the 10-year average pre-Covid volume witnessed between 2009-2019. JLL’s report covers sale transactions of investment-grade hotel assets in Bangkok and Thailand’s key leisure markets and do not include non-arm’s length transactions.
JLL’s data reveal that the average value of the 23 hotels sold last year was circa THB 500-600 million per asset, with only one hotel in Samui sold at a price above THB 1 billion, the average hotel transaction size witnessed in Thailand between 2010 and 2020.
Larger discounts on selling prices in resort markets where hotel owners have felt stronger impact from the tourism market slump was another reason explaining how Koh Samui attracted more hotel investment than Bangkok in 2021.
“Prices of investment-grade hotel assets in Bangkok have held their ground throughout the pandemic period with generally no deep discounts relative to pre-pandemic levels. Over 75% of the transaction volume in the Thai capital city was considered to have only 0 to 5% discount compared to the pre-pandemic level and the remaining 25% was sold by the Legal Execution Department at a public auction. On the other hand, assets in Phuket and Koh Samui have seen a larger discount,” Ms. Pimpanga explains.
JLL expects the momentum in Thailand’s hotel investment market to continue this year.
“We have seen several hotel investment deals that are currently under negotiation in Bangkok and key resort markets and a number of these deals are worth over THB 1 billion. In addition, the ease of travel restrictions across the region and Thailand will facilitate the participation of foreign investors, leading to higher competition for quality assets. For these reasons, we expect 2022 to be another active year for the investment market in Thailand with volume potentially surpassing that of 2021, not to mention that Thailand was the most active market in Southeast Asia in 2021,” Mr. Chakkrit concludes.