Let’s celebrate the recession… by opening 11,150 new hotel rooms by 2010

Collision course… of different business and investment cycles… collision course of state of mind (euphoria) and reality of the economy, leading to malinvestments and overcapacity… and then crash. Eventually.

This is exactly what is happening for the hotel rooms market in Bangok, and around.

Relying on past strong growth, and doing inane projections of this growth for the future… investors rushed in. And they are about to get burned. Seriously burned.

And this is not new. This madness was already detected end of 2007... with an astonishing expansion of the luxury market (5 stars hotels).

Sixty-five hotels with a capacity of 11,150 rooms are scheduled to open this year and next despite the economic crisis and political uncertainty, said Prakit Chinamourphong, president of the Thai Hotels Association (THA).

“Thailand’s tourism industry is projected to grow in the long term, as the country can offer tourists a range of products at cheaper prices than other destinations. Many investors are expanding and undergoing investment to tap the trend,” said Prakit.

However, he does wonder how the new operators can build market share during these tough times. That said, newcomers and existing players are all hoping the situation will recover from the second half of this year.

We see the same idea, served over and over to the suckers by the suckers… It makes them feel good… And looking less stupid. But there is NO DATA to support a miraculous “recovery” in the second half of 2009. It’s a fantasy. A wet dream.

Consumers and tourists from Mars and Jupiter are not going to support the car industry, the exports markets, nor the hotel rooms market in Bangkok this year.

The THA has reported that 9,911 rooms came onto the market last year. Twenty-five hotels with a total of 3,823 rooms opened in Bangkok, followed by 25 hotels with 3,119 rooms in the South, nine hotels with 2,028 units in the East, five hotels with 621 rooms in the North and two with 320 rooms in the West. (Nation)

2 Responses to “Let’s celebrate the recession… by opening 11,150 new hotel rooms by 2010”

  1. 1 A.F. 9 February 2009 at 4:30 am

    Overcapacity is inevitable regardless of the state of the economy; it’s the normal state of affairs. More is automatically better to the Thai psyche.

  2. 2 jeplang 9 February 2009 at 7:53 am

    A.F. I agree-it is not confined to Thailand.
    This state of affairs is akin to Australian authorities invariably granting more fisheries licenses than the fishery can support.Then after a while they buy back ,at great public expense ,many of the licenses they granted in the first place.Now ,how can that be anymore stupid?

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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