Bangkok hotels face crunch as occupancy rates tumble
Analysts warn of fierce competition with 5,100 new rooms set to open by year-end
Bangkok’s hotel industry is heading into a storm in the second half of this year, with falling occupancy rates, soaring competition and a sharp drop in Chinese arrivals casting a shadow over the capital’s hospitality market.
A report by Knight Frank Chartered (Thailand) revealed that average occupancy slipped by 3.7% to 75.1% in the first half of this year, while the average daily room rate (ADR) edged up just 3.3% year-on-year to 4,260 baht. RevPAR growth remains weak, squeezed between rising supply and sluggish demand.
The biggest blow has been a near 35% year-on-year plunge in Chinese visitors, a vital market for mid-range hotels reliant on tour groups. While outbound travel from China has surged elsewhere, Vietnam welcomed 2.7 million Chinese travellers and Japan 3.1 million, Thailand has struggled to compete due to safety concerns, negative media coverage and shifting tourist preferences.
Domestic tourism has been unable to fill the gap, prompting the government to roll out measures such as the Half-Half Thai Tourism scheme and new tax breaks to boost local travel, particularly in the off-season.
Despite the challenges, the pipeline of new hotels shows no sign of slowing. More than 5,100 rooms are expected to be added in 2025, the fastest annual growth since the pandemic. Seven new properties opened in the first half, including the Grande Centre Point Lumpini and Four Points by Sheraton, with a further 12 hotels due before year-end.
This wave of supply is intensifying competition, especially in the mid-range segment, where pricing power is limited. Analysts warn that ADR pressure will persist as new entrants fight for market share.
Luxury hotels, meanwhile, are expected to remain relatively stable, supported by high-income travellers from regional markets and long-haul destinations. Bangkok still holds an advantage over hubs like Singapore and Hong Kong thanks to its competitive pricing, which appeals to experience-driven tourists seeking value.
There are some bright spots: visitor growth from India and Russia rose by 14.6% and 11.1% respectively in the first half of the year, while ASEAN markets continue to provide steady demand, reported The Nation.
Still, these gains are not enough to offset the shortfall from China and South Korea.
For now, hotel operators are banking on strong November–December bookings, fuelled by year-end holidays and MICE events, to carry them through an increasingly crowded market.
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