Chiang Mai Hotel Market Update 2019

Overview

Chiang Mai airport’s passenger arrivals surpassed 5 million for the first time in 2018 with a boost during the low season from the end of February to June. March and April jumped from a low period in 2017 to high months in 2018. 

CHIANG MAI AIRPORT PASSENGER ARRIVALS

Chiang Mai Airport’s passenger arrivals for the first half of 2018 grew by 15% compared to the same period in 2017. However, this year the situation changed with a heavy haze covering the northern part of Thailand, leaving challenges for hotels with booking cancellations and declining demand. This is reflected in data from STR that shows for the period of January through June 2019 market-wide hotel occupancy dropped by 5.1% vs. the same period in 2018.

Nevertheless, international arrivals increased by more than 17% in 2018 due to increasing flight connections. One market to eye is Taiwan as AirAsia and Eva Air launched direct daily flights. The number of Taiwanese passengers rose from 2,773 passengers in H1 2018 to 30,669 passengers in H2 2018.

Even though hotel supply increased by 33% in 2018, both occupancy and ADR were fairly stable with RevPAR standing at THB2,417. There are 5 hotels in the pipeline with the majority in the upscale tier and most with brand affiliations. Looking forward, 2019 looks to have challenging trading conditions for hotels and tourism across the board.

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