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.
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)