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Samui Hotel Market Update March 2014

Surat Thani airport emerging as second ‘Plan B’ island gateway Triple digit growth of Chinese and Russian travelers “In 2013, Samui saw a record high 1.7 million travelers visit the island. Foreign visitors account for 88% of the total market, with nearly half coming from Western Europe. A key stimulator of demand has been the rising prominence of Surat Thani airport as a second gateway to Samui. Passenger arrivals substantially grew at 38% and 32% in 2012 and 2013. Low-cost airlines and non-scheduled flights (charters) are lead indicators pushing up airlift. While Samui’s airport capacity hit 86% in 2013, the second mainland gateway has the ability to drive numbers up. Hotels across the island enjoyed an upswing in performance during the year. Room night demand and average daily rates increased at 5% and 7% over 2012. The key metric of RevPAR

Samui vs. Surat Thani Airlift No. of Passenger Arrivals 1,200,000

% 40

1,000,000

30

800,000

20

600,000 400,000

10

200,000 2009

2010

Samui Annual Growth of Samui

2011

2012

2013

Surat Thani Annual Growth of Surat Thani

Source: Department of Civil Aviation and C9 Hotelworks Market Research

registered double digit growth of 14% spurred by higher room rates. The island landscape is seeing a growing impact from the mass tourism sector, mainly from China and Russia. In 2013, these markets shot up by 127% and 171% compared to 2012. It remains to be seen if the shift will be sustained or is a cyclical trading pattern.” Bill Barnett, Managing Director, C9 Hotelworks

2013 Trends

2014 Outlook

• Total passenger arrivals through Samui Airport continued

• Luxury and upscale tier hotels will continue to

to increase year-on-year, registering a 6% compound annual growth rate between 2007 through 2013.

• Surat Thani airport was increasingly a factor, driven

by AirAsia's and China Eastern Airlines’ direct flights from Malaysia and Mainland China. Non scheduled airline flights delivered nearly 60,000 passengers during the year.

• Hotel-wide performance achieved 73% occupancy,

with an average room rate and RevPAR of US$156 and US$112, respectively.

perform well given steady growth in the affluent visitor profile. Midscale and lower tier properties face challenges from growing mass tourism demand.

• The sustained trend of high load factors on

international flights demonstrate pent up demand for direct flights to the island.

• It is expected that a limited number of new

hotel projects will come into the planning and development stage during the year.


TOURISM Airline Indicators • Total passenger arrivals through Samui Airport registered 5% growth in 2013 vs. 2012. The international sector was highlighted by a 37% year-on-year surge while the domestic leg rose marginally by 2%. • International inbound passengers sharply rose between 2008 and 2013, recording a compound annual growth rate of 16%. Over half of these arrivals came from Hong Kong.

Samui Airport Visitor Arrivals Number of Passengers 1,200,000 1,000,000

International flights accounted for 16% of air traffic in 2013 compared to 6% in 2007

800,000 600,000 400,000 200,000 2006

2007

International

2008

2009

2010

Domestic

2011

2012

2013

Total Passengers

Source: Department of Civil Aviation and C9 Hotelworks Market Research

Number of International Flights

Arrivals from Key Overseas Cities

Number of Flights

%

Number of Passengers

2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200

20 18 16 14 12 10 8 6 4 2

70,000

120

60,000

100

50,000

80

40,000

60

30,000

40

20,000

20

2007

2009

No. of Flights

2011

%

10,000

0 -20 Hong Kong

2013

International to Total Traffic Ratio

2012 Passengers

Source: Department of Civil Aviation and C9 Hotelworks Market Research

Singapore 2013 Passengers

Kuala Lumpur Annual Growth of Passengers

Source: Department of Civil Aviation and C9 Hotelworks Market Research

Tourism Indicators • The top three European countries in 2013 were Germany, Russia and the U.K. with a 17%, 13% and 9% market share respectively. European travelers represented 66% of visitors to the island during the year.

Total

% 100 80

20

% 100

100

80

60 40

Key Geographic Sources Market Share Europe % Asia 80

60 7% 7% 4% 10% 9% 2012 U.K. Australia

_ <> + + +

6% 7% 9% 11% 12% 2013

Russia Germany

Thailand

40 20

3% 4% 13% 7% 17%

+ + _ + <>

2012 Switzerland Italy

4% 5% 9% 13% 17% 2013

U.K. Russia

Germany

40

4% 4% 4% 11%

20

37%

60

_ <> + + +

2012 Japan Malaysia

3% 4% 6% 22%

58%

2013 India China

Thailand

Source: Surat Thani Provincial Office of Tourism and Sports and C9 Hotelworks Market Research

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C9 2013 Hotel Market Update: March 2014


HOTEL MARKET Hotel Performance • Island-wide market performance registered 5% growth in occupied room nights in 2013. • The upscale accommodation segment registered Samui’s top occupancy achieving 76%, following by midscale properties with 73%. Budget and economy and luxury hotels hit 70% and 66% respectively.

Performance by Tier

Performance by Key Locations

%

US$

%

US$

100

600

100

400

80

450

60

80

300

60 300

40

200 40

150

20

Luxury

Upscale

Midscale

2012 Average Room Rate 2012 Occupancy

Budget & Economy

100

20

Chaweng

2013 Average Room Rate 2013 Occupancy

Bo Phut

Mae Nam

2012 Average Room Rate 2012 Occupancy

Source: C9 Hotelworks Market Research

Lamai & Maret

2013 Average Room Rate 2013 Occupancy

Source: C9 Hotelworks Market Research

Monthly Performance 2013 vs. 2012

m be r O ct ob er N ov em be r D ec em be r YT D De c

te

us t

y

Bo Phut led island occupancy with 76%, closely following by Chaweng at 75%

Se p

Au g

Ju l

Ju ne

M

Ap

2012 Average Room Rate

ay

200 180 160 140 120 100 80 60 40 20 ril

US$

Ja nu ar y Fe br ua ry M ar ch

% 100 90 80 70 60 50 40 30 20 10

2013 Average Room Rate

2012 Occupancy

2013 Occupancy

Source: Thai Hotels Association and C9 Hotelworks Market Research

Hotel Openings • In 2013, there were 299 rooms added into Samui’s registered accommodation inventory, which now has a total of 17,778 hotel units. • By the end of this year, 268 keys are anticipated to enter the market, added in the vicinity of Chaweng and Bo Phut. Hotel Name

Location

Ozo Samui Sala Chaweng (conversion and expansion of Muang Kulaypan Hotel) Prana Resort Nandana Sofitel So Samui Mövenpick Resort & Spa Mae nam Beach Koh Samui

Chaweng Chaweng Bo Phut Choeng Mon Mae nam

*To Be Announced

Rooms 208 60 60 120 80

Opening Date Q1 2014 2016 Jul 2014 2016 TBA*

Source: C9 Hotelworks Market Research

C9 2013 Hotel Market Update: March 2014

3


About C9 Hotelworks C9 Hotelworks is an internationally recognized consulting firm with extensive experience in the Asia Pacific region. Its core business focus includes: Hotel and Resort Development Asset Management / Ownership Representation Project Feasibility and Analysis Key competencies include international hotel operator search, selection and contract negotiation, mixed use hotel and residential planning and operation reviews.

Bill Barnett

Managing Director

A wide range of both institutional and private developers and a comprehensive portfolio of completed projects give C9 the skill set and background to focus on key issues, evaluate complex ones and assist clients in achieving solid results. Based in Phuket, Thailand and led by Managing Director Bill Barnett, who has 29 years of experience in Asia PaciďŹ c, the ďŹ rm is well positioned to serve an increasingly demanding marketplace.

The Source for all Hotel and Real Estate News www.thephuketinsider.com

C9 Hotelworks Company Limited 9 Lagoon Road, Cherngtalay, Thalang, Phuket, 83110, Thailand (Office located at the entrance of Laguna Phuket) T: +66 (0)76 271 535 F: +66 (0)76 271 536 www.c9hotelworks.com info@c9hotelworks.com


Samui Hotel Market Update March 2014