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Affluent Travelers Drive Samui Resort Occupancies and Rates Up

Category: Hotels, Posted:20 Mar 2012 | 06:00 am

While Thailand's frenzied hotel development pipeline continues to be driven on steroids, Koh Samui has been quietly going about its business with high-end property openings that are driving occupancies and rates higher and establishing the destination resort island as a bright spot on the horizon.
Upscale hotel demand drove market-wide average room rates up 16% and spiked occupancy 6% last year according to C9 Hotelworks' 2011 Hotel Market Update, (<link>http://www.c9hotelworks.com/downloads/samui-2011-hotel-market-update-march-2012.pdf*click to download report</link>), released today and the series of high profile internationally branded hotels which have rolled out on the island are now having a profound impact on traditional trading patterns.
New direct overseas flights from key regional hubs in Singapore, Malaysia and China are aiding rather than abetting the cause, with total international passenger arrivals from 2007 – 2011 increased at a compound annual growth rate (CAGR) of 7%.
Growth in luxury and upscale properties is spurring the cyclical pattern of volume and average rates forward. Be it induced demand or a reaction to overcrowding in Asia's key leisure destinations, the storyboard is etching a niche into the market.
The report further reflects a changing profile of visitors with China, Korea and Japan accounting for 63% of total Asian hotel guests. Germany remained the top overall source with 14%, from a list that includes the UK with 8% followed closely by Australia just one percentage point down on that.
Analyzing the tourism demographics the five-year trend comparison magnified the island's reliance on international travelers. Occupancy and RevPAR metrics in the budget and economy sector which is favored by the domestic sector show downward performance.
Looking inside the numbers, the lack of a low-cost airline service to Koh Samui has restrained local demand, unlike other Thailand destinations such as Phuket. This can be seen as a hindrance in terms of volume but in terms of attracting travelers with high disposable income and limiting the impact of the island's strained infrastructure it is a positive development.
C9's market research states that at the end of last year there were 448 hotels with 17,204 rooms in Koh Samui. Viewing the development pipeline for the next few years there will only be a 3% rise in supply with 513 new rooms coming into inventory.

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