Thailand 'still attractive for hotel investment'

He said Thailand was still one of the most attractive places for hotel investment despite setbacks caused by the coup in May. Political problems have eased since then and a lot of tourists should return to the Kingdom during the coming high season. Langdon said the average daily room rate at mid- and large-scale hotels had grown although occupancy rates had suffered.

“The Koh Samui hotel market is the best-performing hotel trading destination in Thailand this year,” he said.

In the first six months of this year, hotel transactions throughout Asia were valued at US$3 billion (about Bt97 billion). At this level, it has already exceeded the total amount of transactions by value for all of 2012. 

Thai hospitality property funds are still small, with average net asset value of Bt2.24 billion excluding the Thai Hotel Investment Fund. THIF is largest property fund in Thailand, representing just over half of the total asset value of all hospitality property funds in the country. With the recent establishment of real estate investment trusts (REITs), JLL expects hotel investment activity to increase.

Wichit Na-Ranong, a hotel-sector veteran based in Phuket, said the hotel business on the island would continue to grow, not just because it is a famous tourist destination, but because it has become a multinational community.

“Many foreigners are looking for properties for their second homes. They are considering some other cities like Hong Kong and Singapore, but Phuket is the answer because it is very much cheaper,” Wichit said.

He added that with great connectivity, foreigners were able to travel directly from Phuket to major destinations such as Scandinavia, Hong Kong, Singapore, mainland China, South Korea, the Middle East and Malaysia. “Apart from Bangkok, Phuket is only city [in Thailand] that can offer great convenience in air travel and even land connectivity. This will help push the growth of the hotel and property businesses.”