Samui Hotel Market Update November 2019

Overview

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.

SAMUI INTERNATIONAL AIRPORT FLIGHT ARRIVALS

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.

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.

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