Bangkok April 2021

BUSINESS SUPPLEMENT
Cover Story
HOTEL INVESTMENTS EXPECTED TO
RISE IN BANGKOK AND ACROSS ASIA
Many hotel investors
consider that the hospitality
industry in Bangkok
and across the region has
started to turn a corner
and are actively seeking
to buy properties, according
to JLL Hotels and Hospitality
group, a well-regarded
property services
company. This is in spite
of the fact that there are
continued travel restrictions
in place and these
may persist for some time
to come.
Senior managing director
and head of investment
sales in Asia Pacific with
JLL Hotels & Hospitality
Group, Nihat Ercan, was
quoted as saying, “The
cycle has been reset and
we are now on the cusp of
a period of recovery,” adding,
“Optimism around the
deployment of vaccines
and an eventual recovery
in tourism has started to
drive activity and investors
don’t want to miss the
opportunity. At the same
time record amounts of
capital have been raised
to be deployed into the
real estate sector in general,
including into hospitality.”
2020 was a year when
the market paused and
investors waited to see if
there would be any distress
evident, along with
the fire sales that would
undoubtedly follow. However,
in many respects
this did not occur.
Managing director and
head of advisory and asset
management in Asia
Pacific at JLL, Xander Nijnens,
was quoted as saying,
“The past year has
been all about protecting
cash flow and this will
continue for the coming
12 to 18 months,” adding,
“Seasoned owners realize
that now is the time
to invest in existing hotels,
with little displaced
business. However, it is a
balancing act in keeping
operating costs flexible,
while investing ahead of
the recovery to edge in
front of competitors and
meet guest needs.”
One advantage of the
current period is that investors
looking to renovate
properties have a
window of opportunity to
do so without losing significant
business since
occupancy rates are low
anyway at the current
time.
Mr. Nijnens was also
quoted as saying, “There
are deals to be done in
the current environment,
yet value-add players
will have the upper hand
as they are willing to roll
up their sleeves to invest
and reposition hotels with
a view to selling them in
three to five years.”
In Bangkok, prior to
the pandemic, Chinese
tourists made up 38.3 per
cent of all hotel arrivals.
With a travel bubble between
Thailand and China
now being actively discussed,
investors in the
hotel market in Bangkok
are becoming more confident
that this is the correct
time to secure assets
ahead of the floodgates
opening.
The president of the
Association of Thai Travel
Agents, Vichit Prakobosol,
was quoted as saying,
“The Chinese market
could take just two months
to resume after regulations
are settled. Chinese
arrivals could reach 10
million within one year.”
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