LCC Samui Muzzle Pushes Room Rates Up

Thailand’s resort island of Samui continues to see its tourism sector steadily grow despite standing quietly alone in a maddening storm of low-cost airlift growth across the country. In 2015 airport passenger arrivals eclipsed the one million marker and year-on-year growth registered a 7% increase.

But the story doesn’t stop there, as room rates across the Kingdom remained volatile in a year where national tourism arrivals topped 29 million, Samui market-wide average room rates pushed up 12% compared to 2014.  According to data from C9 Hotelworks newly released Samui Hotel Market Update the domino impact of high rates pushed up the all important metric of RevPAR (revenue per available room) y-o-y  by an impressive 15% 

As Samui’s privately operated airport remains a hotly contested issue amongst tourism stakeholders,  the actual fact is that the muzzling of low-cost airline incursion which in many other Thai destinations has hoteliers struggling to drive up or any many cases retain rates, for the island in the Gulf of Thailand has been a mixed-blessing.

Commenting on the trend we think the systematic trigger of increasing the daily flight ceiling imposed by the government from 36 to 50 flights per day has regulated growth and has had an overall organic positive factor for the market. Hotel supply and demand issues remain favorable and in fact the increase in flight capacity has dually benefited from Bangkok Airways switching a growing number of flights to larger Airbus A-319s instead of ATR-72’s which has added overall seat capacity.

With tourism number surging, Samui’s hotel’s are seeing a systematic upgrading which this year is being highlighted by the completion of a US$20 million renovation of the Santiburi Beach Resort and the reopening of the Amari in Chaweng which was closed for a substantial make-over. While another Thai hospitality giant TCC Group recently announced plans for an upgrade and rebranding of the Imperial Boat House to Spanish hotel chain Melia under their Sol brand.

One key highlight of C9’s report is the growing significance that international chains are having on performance. Branded hotels achieved higher market-wide average daily rates (ADR) in 2015 compared to the previous year by 24%. Looking at the incoming pipeline of 14 hotels currently in development in Samui, well known groups such as Ritz-Carlton, Holiday Inn and ACCOR’s Sofitel figure prominently into the island’s future landscape. Meanwhile the Samui Airport is in the early stages of study and public hearings over a US$29.2 million expansion plan.

To download the full report  C9 Hotelworks Samui Hotel Market Update