Chiang Mai hotels battle disruptors

by Bill Barnett

Thailand’s northern tourism hub of Chiang Mai has become a victim of its own volume-driven success. According to hospitality data provider STR, market-wide hotel occupancy for the first five months of the year is down 5.1%, compared to the same period in 2018.

In the newly released C9 Hotelworks Chiang Mai Hotel Market Update, the comparison between 2018 when the gateway airport surpassed a record-high 5 million passenger arrivals and now in 2019 as haze and air pollution strongly impacted tourism, are startling reminders how fragile travelers shifting appetites can be.

Looking into the numbers this year, total hotel supply in the market is 48,000 keys which is creating a powerful necessity for Chiang Mai to step outside its boutique image and find ways to fill rooms with more mainstream offerings.

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A number of properties in the incoming pipeline are branded with international operators, as owners are looking for a competitive edge. The recent opening of the Novotel Nimman Journeyhub is just one example of a Bangkok developer looking to diversify into more affordable hotel assets outside of Thailand’s capitol.

Talking to hotel operator’s C9’s research has highlighted that Chiang Mai’s mounting reliance on the Mainland Chinese sector, which is in the midst of a slowdown is cause for concern. In the first half of last year, China was the number one international source market, holding a 14% share in hotel guests.

In the longer-term, moving past pollution, Chinacation and over-development issues, the bigger issue is how will Chiang Mai evolve from a headlong dive into a far bigger tourism pool and still retain the destination’s long-lasting image as a cultural icon? Same same, but different looks to be a challenging task ahead.

To download and read C9 Hotelworks full Chiang Mai Hotel Market Update, click the following link HERE.

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Bill Barnett

Bill Barnett has over 30 years of experience in the Asian hospitality and property markets. He is considered to be a leading authority on real estate trends across Asia, and has sat at almost every seat around the hospitality and real estate table. Bill promotes industry insight through regular conference speaking engagements and is continually gathering market intelligence. Over the past few years he has released four books on Asian property topics.

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