Bangkok’s hospitality market is experiencing strong growth, driven primarily by the upscale segment along the Chao Phraya River.
Speaking at the 14th Thailand Tourism Forum (TTF) 2025 held at the InterContinental Bangkok, Jesper Palmqvist, Vice President, STR Asia Pacific, spoke about the resilience of Bangkok’s hotel market and how luxury hotels are the future of the city. He emphasized how important it is in shaping the world.
“Bangkok has a long history of resilience in absorbing and adapting to new supply,” he said, noting that the city’s hotel supply has grown by an average of 3% annually since 2010, but remains underperforming. He added that the market was solid.
One of the most notable trends is the rise of luxury riverside hotels. Compared to 2019, rates in Bangkok’s luxury segment increased by 43 per cent, outpacing major destinations such as London (34 per cent) and Singapore (37 per cent).
“Luxury in Thailand has grown rapidly. Twenty percent of Bangkok’s luxury hotels now sell rooms for more than $300 per night, half of which are on the river, which has driven the market. We are making great progress,” Palmqvist said.
The Chao Phraya River and Silom areas have the highest concentration of new luxury developments, enhancing Bangkok’s reputation as an upscale destination.
Although the supply boom peaked in 2022-2023, most of the rooms currently planned are being delivered in 2023-2024, indicating a transition to more stable growth.
In the future, it is expected that small hotels with a small number of rooms will become the mainstream of new development, excluding the economy and medium-sized sectors.
“Another general trend is that hotels and (developments) tend to have fewer rooms. This has been a 15-year trend since 2015. The only area where this is not completely true is in the economic sector. Elsewhere, hotels are being built with fewer rooms,” he said.
Additionally, branded hotels are becoming more common, with 58 percent of Bangkok’s luxury hotels and 36 percent of mid-sized hotels now affiliated with major chains.
“Hotel brands are increasing their share of total supply in all classes in Bangkok. The only segment that is lagging is the economy segment. Elsewhere, it’s brand, brand, brand,” Palmqvist he said.
Looking ahead, Palmqvist predicts “modest but positive sales growth” for Bangkok’s hotel sector in 2025.
Occupancy in Q1 2025 is already 10% higher than last year for river and Silom properties. However, rising labor costs remain a challenge as revenue growth slows.
“Bangkok’s hoteliers have worked hard to rein in labor costs over the past two years, but expenses continue to rise while revenue growth slows,” he said, especially in the first half of 2025. Hotels “need to strike a careful balance” in the next two to three quarters, he added. Expenses and Revenue”.
Although interest rate growth is stabilizing, overall performance remains strong. “Revenue per available room is still improving,” he said.
Looking ahead, he emphasized that 2025 will be about maintaining this balance, saying: “Hoteliers will need to manage labor costs wisely while leveraging growth in the luxury sector to sustain performance. “Yes,” he concluded.
