Bangkok hotels see higher occupancy with lower room rates and revenue

Thailand’s hotel market did not grow across the board during the first half of 2026.

Bangkok hotels relied on diverse demand to support occupancy, while Phuket retained the power to raise room rates.

Both markets, however, face a new challenge as substantial upper-tier supply is due to enter over the next two years.

Carlos Martinez, Director of Research and Consultancy at Knight Frank Chartered (Thailand) Co., Ltd., said Bangkok’s occupancy rate rose during the first half of 2026, but revenue fell.

This signalled that the capital’s hotel market was at a turning point: more rooms were occupied, but rates could not be raised.

Bangkok hotels recorded an average occupancy rate of 76.2%, up 1.1% from the same period a year earlier.

The average daily rate (ADR), however, fell by 2.1% to THB4,013, causing revenue per available room (RevPAR) to decline by 0.6% to THB3,056.

“This is a major challenge for Bangkok’s hotel market at present and could continue into 2027–2028, with more than 17,000 new rooms in the pipeline.”

The pattern shows that hotel operators still have limited pricing power.

As new supply enters the market, some hotels are using “price” to retain their customer base and market share, particularly those offering similar products and competing for the same customers.

Premium hotels retain advantages through their brands, locations, design and distinctive experiences, while properties closely resembling their competitors are more likely to be drawn into a “price war”.

Upscale segment faces the greatest pressure

Differences become clearer when the market is divided by segment.

Luxury hotels maintained an ADR of THB7,010, up 0.6%, while the midscale segment increased its ADR by 0.4% to THB2,151.

The upscale segment came under the greatest pressure, with its ADR falling by 4.4% to THB4,197 because customers could compare and switch between hotels more easily.

As new hotel brands enter the market and rates are displayed transparently on online platforms, customers are making decisions based not only on brand but also on the “price relative to the experience” offered.

More than 17,000 rooms due within two years

At the end of the first half of 2026, Bangkok had 105,038 hotel rooms, an increase of 1,211 rooms, or 1.2%, from the end of 2025.

Branded hotels accounted for about 69% of the total, with non-branded properties making up 31%.

Local and regional operators continued to play a prominent role, managing 56% of the market’s rooms, compared with 44% managed by international operators.

Luxury and upscale properties accounted for 65% of all rooms, reflecting Bangkok’s high proportion of upper-tier hotels.

The first half also saw new openings, reopenings and rebrandings.

Grand Nikko Bangkok Sathorn began opening in phases in April with 405 units, including 36 serviced residences, while akyra Bangkok 11 opened with 100 rooms and Aiden Surawong Bangkok with 77.

Properties reopening under new brands included the 244-room voco Bangkok Surawong, which brought the former Tawana Hotel building back into operation, and the 178-room Radisson Hotel Chateau de Bangkok, which resulted from a rebranding.

These additions may represent only the first wave of competition, as another 17,590 rooms are in the pipeline, equivalent to 16.7% of the supply currently operating.

Sukhumvit and Siam emerge as new battlegrounds

Projects due to open in 2027 contain a combined 7,635 rooms, with several more scheduled for 2028.

Of all projects scheduled to open, 80% are in the luxury and upscale segments, while more than half of those with specified locations are concentrated in Sukhumvit and Lumpini–Siam.

Bangkok is also preparing for several new hotels and rebrandings during the second half of 2026, including Canopy by Hilton Bangkok Sukhumvit, Hotel Indigo Bangkok Thonglor, The Quarter Ekkamai, YOTEL Bangkok Sukhumvit at Cloud 11 and Fairmont Bangkok Sukhumvit.

The Ratchathewi–Siam area will also gain Mercure and ibis hotels in the Siam Ratchathewi project.

“Competition in Bangkok is shifting from city level to submarket level. Accessible locations, strong demand generators and differentiated products will become increasingly important.”

High season and major events offer year-end support

Bangkok’s hotel market is expected to remain stable during the second half of 2026, although growth is unlikely to be evenly distributed.

The third quarter could experience a seasonal slowdown before the market recovers towards the end of the year, during the tourism high season and a period with numerous major events.

Rising air-passenger numbers during the first half also provided support, increasing by 2.0% internationally and 2.5% domestically.

The MICE sector, medical travel, shopping, concerts and major events also serve as a “buffer”, reducing the market’s reliance on leisure travellers alone.

Government measures, including changes to visa arrangements, accommodation co-payment support and air-ticket discounts, have stimulated travel during certain periods but have not been sufficient to generate significant growth across the hotel market as a whole.

Phuket raises rates despite lower occupancy

While Bangkok hotels face the challenge of higher occupancy but limited scope to raise rates, Phuket hotels are experiencing the opposite pattern.

They can still increase room rates despite lower occupancy.

During the first half of 2026, average occupancy fell by 3.2%, from 80.0% to 76.8%, while ADR rose by 5.3% to THB7,117. RevPAR consequently increased by 1.1% to THB5,465.

This represents a “rate-led market”, where growth does not come from selling more rooms but from maintaining and raising room rates.

Beneath the market’s continuing strength, however, is a warning sign.

Every increase in Phuket’s rates raises key questions about whether customers will continue to pay and how many room nights may be lost in exchange for higher rates.

Traveller numbers decline, but Phuket remains popular

International air travellers passing through Phuket International Airport totalled 2.74 million during the first half of 2026, down 0.9% from 2.77 million in the same period a year earlier.

Domestic traveller numbers fell by 2.3% to 1.65 million, bringing total air travellers to 4.39 million, a decline of 1.4%.

Although the figures may appear negative, the slowdown followed a strong growth base in the first half of 2025 and did not change Phuket’s status as a tourist destination.

More significant than the overall figures is the diversity of Phuket’s visitor base.

The resort market is supported not only by short-stay tourists but also by long-stay visitors from Russia, Kazakhstan and Europe, as well as travellers from China, Malaysia and South Korea.

Russia remains the largest market, with China second

Data from the Tourism Authority of Thailand’s Phuket Office showed that Russia remained Phuket’s largest international market, with 574,315 visitors, followed by China with 314,130.

The United Kingdom and Australia each accounted for 123,000 visitors, while Germany, France, Kazakhstan, Malaysia and South Korea remained important markets.

This visitor mix gives Phuket a significant advantage, as many long-haul travellers tend to stay longer and show stronger demand for premium resort accommodation than short-stay visitors.

“But the same advantage becomes a risk when Phuket depends heavily on international air travellers. Its ability to accommodate flights, or airlift capacity, therefore immediately becomes a key market variable, along with exchange rates, economic conditions and geopolitics.”

Seasonality remains Phuket’s weakness

January and February together accounted for 43.4% of all air travellers during the first half of 2026, while June represented only 10.8%.

The RevPAR Seasonality Index, in which 100 represents the average, made the contrast clearer: it stood at 196 in January before falling to 41 in June.

This means Phuket’s hotel market performed at almost twice the average in January, while June was more than 50% below the average.

“This difference is significantly greater than in Bangkok and explains why looking at average occupancy or RevPAR for the whole year may not be sufficient for the resort market. What operators actually have to manage is cash flow that swings sharply with the seasons.”

The first-half figures provide the clearest illustration of the shift.

Occupancy stood at 76.8%, down 3.2%, while ADR increased by 5.3% to THB7,117 and RevPAR rose by 1.1% to THB5,465.

This produced Phuket’s notable equation: although hotels sold fewer room nights, higher rates were sufficient to offset the decline in volume.

Phuket therefore retained destination-level pricing power, unlike Bangkok, where competition and supply pressure pushed ADR lower.

RevPAR growth of only 1.1% despite a 5.3% increase in ADR also indicated that rate rises were beginning to carry a cost.

As prices increase, customers become more sensitive to them, potentially reducing the number of room nights sold.

Another 2,498 rooms scheduled for the second half

A combined 2,498 hotel rooms were scheduled to open during the second half of 2026.

This does not mean that all of them will enter the market as planned, because some projects could be delayed until the following year.

Looking further ahead, approximately 1,460 rooms are scheduled for 2027, while a total of 1,193 rooms are scheduled for 2028.

Around 89% of new supply between 2026 and 2028 remains concentrated in the luxury and upscale segments.

This requires close attention because most new supply will consist of branded resorts, upper-tier hotels, branded residences and luxury villas, making the market increasingly dependent on high-spending customers.

If demand from this group fails to keep pace, new supply could place pressure not only on occupancy but eventually on pricing power.

Hotels in both markets are entering a period in which the “quality of revenue” may become more important than the “number of rooms sold”.

Operators must therefore manage ADR, sales channels, labour costs, F&B and ancillary revenue efficiently, while new hotel supply in 2027–2028 will intensify competition.

The challenge for Bangkok’s luxury and upscale hotels is how to maintain rates amid excess supply, while Phuket must determine how to preserve its pricing power when demand is volatile.

Source: Bangkokbiznews