Samui Hotel Market Update November 2019
Mono airlift and accessibility remain key barrier to island’s broader tourism success Supply growth to challenge market’s premium hotel rates “This year, the hotel market in Samui has been shaken by declining demand and reduced airlift to the island. The China slowdown is widely cited as a key factor, together with high airfares. According to Bangkok Airways, half of the company revenue is generated by flight routes connecting with Samui. The carrier reported a loss in the first half of 2019 followed by a strategy to cut costs with reduced frequencies for domestic flights. In addition, it has suspended direct flights from Guangzhou and decreased frequencies for flights from Chongqing and Chengdu by 50%, According to the latest available statistics, airport passenger arrivals to Samui had a marginal growth last year as flight arrivals declined by 3% y-o-y during the same period. We anticipate the downward trend will continue in 2019 as a result of reduced flight connections. Much of the island’s tourism future is linked directly to how Bangkok Airways will address shifting market profiles.
Samui International Airport Flight Arrivals Number of Flights
%
20,000
10
16,000
7
12,000
4
8,000
1
4,000
-2
-
-5 2015
2016
2017
2018
Source: The Civil Aviation Authority of Thailand (CAAT) and C9 Hotelworks Market Research
Currently, there are 6 hotels representing 913 keys expected to come on stream by 2021. Over 46% of the pipeline are in upscale and luxury tiers. With the current limitation to the island’s accessibility, the stronger competition will put pressure on hotel rates in the mid to long term.” Bill Barnett, Managing Director, C9 Hotelworks
Trends
Forward Outlook
•
Market-wide RevPAR decreased by 19% as of YTD July 2019 compared to the same period in 2018 as a result of a drop in both ADR and occupancy.
•
Upcoming hotel pipeline is mainly in uppermidscale to upper-upscale tiers, accounting for 80% of the future pipeline with all properties having an international brand affiliation.
•
Europe continues to be the dominant core source market, representing 46% of the total guest arrivals at accommodation establishments for all of last year.
•
Bangkok Airways has budgeted THB692 million for the renovation and upgrading of Samui International Airport, with the plan now undergoing an environmental approval process.
•
Total tourism revenue hit THB 64 billion in 2018, representing a 12% increase compared to the previous year.
•
Aside from traditional hotels, alternative accommodation choices of private villa rentals has intensified accommodation competition.
TOURISM MARKET Demand Indicators Samui International Airport drew 14,872 flight arrivals and 1,299,244 passenger arrivals last year (latest available data).
Samui International Airport Arrivals & Flight Arrivals Number of Passengers
Number of Flights
1,600,000
16,000
1,200,000
12,000
800,000
8,000
400,000
4,000
-
2014
2015
2016
2017
Total Arrivals
2018
Demand growth fell by 0.5% last year compared to an increase of 4% in 2017 and 22% in 2016
Flight Arrivals Source: CAAT and C9 Hotelworks Market Research
Seasonality Number of Passengers 150,000 130,000 110,000 90,000 70,000 50,000 Jan
Feb
Mar
Apr
May
Jun
Jul
2018
Aug Sept
Oct
2017
Nov
Dec
Seasonal trading has returned with increased demand during high season
2016
Source: CAAT and C9 Hotelworks Market Research
Top 5 Key International Geographic Source Markets Number of Guest Arrivals at Accommodation Establishments 500,000 400,000 300,000 200,000 100,000 -
Germany
Mainland China 2016
Australia 2017
United Kingdom
France
2018
Source: Thailand Ministry of Tourism and Sports and C9 Hotelworks Market Research
2
C9 Samui Hotel Market Trends: November 2019
Top three source markets experienced a significant drop in growth rates from 30% in 2017 to 6% in 2018
HOTEL MARKET Hotel Supply As of 2018, total licensed accommodation in Samui was 622 establishments with 22,617 keys. By the end of next year, there are 480 keys expected to enter the market which are focused on upscale and upper-upscale tiers.
Accommodation Establishments
Hotel supply recorded a compound annual growth rate of 2% from 2013 to 2018
Number of Keys
%
25,000
50
22,000
40 30
19,000
20 16,000
10
13,000
0
10,000
-10 2010 2011 2012 2013 2014 2015 2016 2017 2018 Keys
Annual Growth Rate
Source: Thailand Ministry of Tourism and Sports and C9 Hotelworks Market Research
Hotel Performance
Market-wide occupancy dropped by 14% y-o-y as of July YTD 2019, and ADR fell by 6% during the same period
%
THB 5,000
100
4,000
90
3,000
80
2,000
70
1,000
60
-
50 2016
2017
2018
YTD July YTD July 2018 2019
ADR
Occupancy
Source: Thai Hotels Association and C9 Hotelworks Market Research
Hotel Pipeline Hotel Name
Location
Sol Beach House Koh Samui* Unnamed Hyatt Regency Koh Samui Sofitel So Samui Holiday Inn Express Bophut Holiday Inn Resort Bophut Holiday Inn Express Samui Chaweng Centara Grand Beach Resort*
Choeng Mon Choeng Mon Bophut Choeng Mon Bophut Bophut Chaweng Chaweng
*Rebranding or upgrading of existing hotel
Keys 203 138 139 83 200 150 300 N/A
Opening Date Q1 2020 Q1 2020 2020 2021 2021 2021 2027 N/A Source: C9 Hotelworks Market Research
C9 Samui Hotel Market Trends: November 2019
3
Samui 2019 Key Domestic & International Scheduled Flights By Region (Monthly)
THAILAND 728 Flights Bangkok Phuket Pattaya Chiangmai Krabi
560 84 28 28 28
MAINLAND CHINA 48 Flights Chongqing Chengdu Xian
4 16 28
MALAYSIA
HONG KONG (SAR)
SINGAPORE
Kuala Lumpur: 28
56
104
Source: C9 Hotelworks Market Research.
C9 Hotelworks Company Limited 9 Lagoon Road, Cherngtalay, Thalang, Phuket, 83110, Thailand (Office located at the entrance of Laguna Phuket) T: +66 (0)76 325 345 www.c9hotelworks.com info@c9hotelworks.com