In 2018, hotel investment transactions in Thailand reached 14 billion baht, down 22% from a record 17.1 billion in 2017 but higher than the 13.2-billion-baht five-year average, according to real estate firm JLL.
"Both local and international investors have continued to show keen interest in Thailand's hospitality market, but the lack of investment-grade assets available for sale and a wider gap between buyers' and sellers' pricing expectations contributed to the lower investment volume recorded in 2018," said Nihat Ercan, managing director for Asia at JLL's hotels and hospitality group.
Seven hotel assets were sold in Thailand in 2018, compared with 12 in 2017. Sales activity in 2018 took place at fewer locations, including Bangkok, Phuket and Koh Samui, compared with 2017 when sold assets were spread across six markets: Bangkok, Hua Hin, Chiang Rai, Nakhon Ratchasima, Pattaya and Koh Lanta.
Bangkok continued to dominate with investment activity, accounting for over 73% of the country's total volume last year.
Most investment came from Thai investors, representing more than 80% of hotel buyers in 2018; almost 70% of these Thai investors were corporations outside the hospitality industry looking to diversify their portfolios, a distinct trend in recent years. Most foreign investors investing in Thai hotels were from Singapore and Britain.
Thailand was the region's fifth most active hotel investment market after Japan, China, South Korea and Hong Kong.
"We expect momentum in Thailand's hotel investment market to continue into 2019," said Mike Batchelor, chief executive of JLL's Hotels and Hospitality Group. "Long-term prospects for the country's tourism remain promising. Despite a drop in the number of Chinese tourists, international arrivals rose to 38.3 million in 2018, and are expected to hit 40.3 million in 2019."
The government's continued efforts to encourage local and international demand for tourism and improve related infrastructure will give a big boost to the tourism industry, Mr Batchelor said.
