Tourism and Real Estate in Thailand
Most foreigners who purchase a property in Koh Samui have previously enjoyed holidays here, and have subsequently fallen in love with the island’s many charms, affordability and relaxed way of life. It is therefore important, when looking at the future potential of “overseas” investment regarding the property market, to first see how the Thai tourist industry, the leading industry in Thailand, has been and will continue to perform as it is today’s tourists who will become tomorrow’s investors.
Below are some comments taken from a Jones Lang LaSalle report regarding their views on tourism in Thailand:
2016 saw international arrivals increase by 7.5% y-o-y to 20.8 million. This represents a more moderate increase compared to the 24.8% seen in 2015, mainly due to the slowed growth of visitors from Mainland China in response to the crackdown on zero-dollar tours in late 2016. As at YTD November 2017, arrivals had risen 20.6% y-o-y to 21.1 million.
Mainland China is Bangkok’s largest source market, contributing almost 30% of international visitors as at YTD July 2017 according to latest available statistics. Despite the government crackdown, Bangkok tourism was not significantly affected, with strong y-o-y growth from South Korea (20.1%) and India (17.4%) further supplementing visitor arrivals.
Approximately 1,900 keys were added in 2017. While 2016 saw a concentration in the midscale segment, accounting for close to 50% of new supply, 2017 saw a shift to the budget and upscale segments, contributing close to 30% each. Approximately 9,800 rooms remain in the pipeline between 2018 and 2020. In terms of location, we are seeing a shift beyond the traditional Sukhumvit area, as the Riverside and Ratchadapisek areas gain traction.
Despite stable arrival figures from Mainland China, Bangkok continues to see strong growth in visitor numbers from other major source markets, particularly from South Korea and India, as the government shifts focus from arrival figures to visitor spending by targeting higher-spending niche markets. The newly released first edition of the Michelin Guide to Bangkok will further strengthen Bangkok’s forefront position as a culinary destination.