AccorHotels defends big Thai expansion

Company to go from 24 to 32 hotels in Bangkok alone
AccorHotels is defending its aggressive expansion in Thailand despite the oversupply of rooms in Bangkok.
It currently has 60 properties with close to 14,000 rooms across Thailand, TTG Asia writes. In Bangkok alone it has 24 hotels with almost 7,000 rooms.
By 2019, it plans to add to this a further 17 properties, including eight in Bangkok, translating to another 4,000 rooms, said Patrick Bassett, COO, AccorHotels, Upper Southeast & Northeast Asia.
Accor’s expansion in Thailand is being made in response to the continued growth of international arrivals there, with double-digit percentage growth year-on-year since 2010, peaking at 29.9 million arrivals last year. Thailand’s Department of Tourism anticipates visitors to reach 45 million by 2020.
“In 2015, our intra-Asian market grew by 39.6% year-over-year, while Europe expanded by 14.5%, Oceania by 34.9% and the Americas by 17.9%. As a gateway city, Bangkok benefits greatly from these visitors. The enduring popularity of Thailand and Bangkok continues to appeal to investors,” Bassett tells TTG Asia.
However, “room oversupply is a long-term problem in Bangkok as hotels tend to be part of the assets of local family groups who see themselves as owners, not sellers,” commented Bill Barnett, managing director of consultancy C9 Hotelworks.
“(Post global financial crisis), a significant trend has been large listed property firms adding hospitality assets to their portfolios for the purpose of mitigating risk and ensuring there is recurring income should the property market cool down.”
But Bassett stressed that there are pockets of unmet demand in the Thai capital even considering the existing room inventory excess.
“Some of Bangkok is still underserved by international brands and distribution systems, presenting investors with compelling opportunities.”
An example, he said, is the area around the Impact Exhibition and Convention Centre, which is set to undergo development and receive new attractions including a theme park, marina, restaurants and shops.
“The 380-room Novotel Bangkok Impact already services visitors to the area, but we will be opening the 600-room ibis Bangkok Impact in 2019 to meet growing demand,” Basset said.
TTG Asia