PROFITABILITY UPDATES

FOR PATTAYA HOTELS &

EEC IMPLICATIONS TO
HOTEL SECTOR
Nikhom Jensiriratanakorn, Horwath HTL
Annual Survey of Hotel Operations
Annual Study Advisory Board
PATTAYA vs THAILAND
Thailand Business Mix – YE 2018
Thailand Nationality Mix – YE 2018
 Thailand Key Markets – YE 2018

Greater Hua Hin / Chiang Mai /

Bangkok Koh Samui Pattaya
Phuket Cha Am Chiang Rai

# Hotels 79 50 15 14 18 23

Occupancy 80% 76% 72% 71% 72% 82%

ADR (THB) 3,277 3,864 3,823 3,072 6,833 2,553

RevPAR (THB) 2,628 2,955 2,738 2,182 4,898 2,104

(in millions)

Total Rev PAR 1.57 1.56 1.48 1.26 2.53 1.06

Total Exp PAR 1.01 1.00 1.06 0.81 1.57 0.64

GOP PAR 0.56 0.56 0.42 0.44 0.96 0.41

GOP % 36% 36% 29% 35% 38% 39%

 Thailand Key Markets – YE 2018

Greater Hua Hin / Chiang Mai /

Bangkok Koh Samui Pattaya
Phuket Cha Am Chiang Rai

Room Exp 22% 22% 24% 22% 18% 21%

F&B Exp 68% 69% 76% 69% 71% 69%

Total Dep Exp 39% 36% 41% 35% 33% 35%

A&G Exp 9% 10% 12% 12% 12% 10%

S&M Exp 7% 6% 7% 8% 7% 5%

R&M Exp 4% 6% 6% 5% 6% 5%

Utility Exp 5% 6% 6% 5% 5% 6%

Total UDOE 26% 28% 31% 29% 29% 26%

GOP % 36% 36% 29% 35% 38% 39%

Thailand Key Markets – YE 2018
 Thailand by Price Points – YE 2018

THB1,500- THB2,500- THB3,500-

< THB1,500 >THB5,500
THB2,500 THB3,500 THB5,500

# Hotels 40 51 45 53 36

Occupancy 73% 78% 77% 78% 75%

ADR (THB) 1,127 2,008 3,014 4,416 8,315

RevPAR (THB) 821 1,572 2,336 3,459 6,257

(in millions)

Total Rev PAR 0.45 0.81 1.28 1.98 3.66

Total Exp PAR 0.31 0.52 0.81 1.28 2.37

GOP PAR 0.14 0.28 0.47 0.70 1.29

GOP % 31% 35% 37% 35% 35%

 Thailand by Price Points – YE 2018

THB1,500- THB2,500- THB3,500-

< THB1,500 >THB5,500
THB2,500 THB3,500 THB5,500

Room Exp 26% 23% 22% 21% 20%

F&B Exp 66% 69% 69% 68% 71%

Total Dep Exp 38% 36% 37% 38% 38%

A&G Exp 15% 12% 11% 10% 10%

S&M Exp 5% 6% 6% 7% 7%

R&M Exp 5% 5% 4% 5% 5%

Utility Exp 8% 7% 6% 5% 5%

Total UDOE 31% 28% 27% 26% 27%

GOP % 31% 35% 37% 35% 35%

Thailand by Price Points – YE 2018
Thailand by Price Points – 5 Year Trend
PATTAYA vs ASEAN RESORTS
 Key ASEAN Resort Markets
4 Star Hotels & Below – YE 2018
Vietnam
<USD120 Pattaya Bali Phuket
Coast

# Hotels 20 69 26 18

Occupancy 81% 74% 76% 60%

ADR (USD) 58 61 70 81

RevPAR (USD) 48 45 53 48

(in thousands)

Total Rev PAR 23 22 26 28

Total Exp PAR 15 15 16 17

GOP PAR 8 7 10 11

GOP % 35% 33% 38% 40%

Converted at THB32.61 per USD

 Key ASEAN Resort Markets
4 Star Hotels & Below – YE 2018
Vietnam
<USD120 Pattaya Bali Phuket
Coast

Room Exp 24% 24% 22% 19%

F&B Exp 71% 67% 64% 60%

Total Dep Exp 35% 38% 33% 33%

A&G Exp 12% 13% 12% 9%

S&M Exp 6% 5% 6% 6%

R&M Exp 5% 6% 5% 4%

Utility Exp 7% 6% 7% 8%

Total UDOE 30% 29% 29% 27%

GOP % 35% 33% 38% 40%

Key ASEAN Resort Markets
4 Star Hotels & Below – YE 2018
EASTERN ECONOMIC CORRIDOR
EEC Synopsis
“Economic catalyst, attracting USD43 billion FDI by 2022 vs USD9 billion in 2017”

Infrastructure Development Completion

• Highspeed Eastern Rail Route 2023
• Mabtapud Port (Phase 3 expansion) 2025
• Laemchabang Port (Phase 3 expansion) 2025
• Aircraft Maintenance, Repair and Overhaul (MRO) Center 2022
• Utapao International Airport 2023
• Motorway from Pattaya to Utapao 2020
• Dual-track railway connecting Bangkok (Hua Mak) to 3 ports in EEC 2023
EEC Synopsis
EEC Promotional Zones for new
investments in targeted industries
• Eastern Airport City 6,500 rai,
Rayong (Utapao Airport)
• EEC of Innovation (EECi) 3,000
rai, Rayong (Wangchan district) and
Chonburi (Sri Racha district)
EECd
• Digital Park Thailand (EECd) EECi
709 rai, Chonburi (Sri Racha district) EECi

• 21 EEC Industrial Estate

Promotional Zones 28,666 rai, 12 Eastern
in Chonburi and 8 in Rayong Airport City
EEC Synopsis
Major Demand Generators
I) Existing Industries
• Development & Construction
– BBS Joint Venture, Grand Consortium: Utapao Airport
– Zhengzhou Airport Economy Zone (ZAEZ): Aerotropolis development
– CP Group: High-speed rail and Mabtapud industrial park
– GPC: Laemchabang Port
– WHA: 9 Industrial Estates
• Oil & Gas
– PTT: Expansion
– B Grimm: Powerplants
– Amata BIG: Gas supply
• Manufacturing
– Construction material: Xiamen Golden Egret Special Alloy Co (GESAC)
– Automotive: Chinese and Japanese firms
EEC Synopsis
Major Demand Generators
II) First Targeted Industries
Next generation automotive, smart electronics, advanced agriculture and biotechnology,
food processing, and high-wealth and medical tourism
III) New Targeted Industries
Digital, robotics, aviation and logistics, comprehensive healthcare, and biofuel and
biochemical
– Alibaba’s e-commerce park, Chachoengsao
– EEC Digital Park, Si Racha, Chonburi
– Airbus’s aircraft MRO center joint investment with Thai Airways, Utapao
– Air Asia’s MRO center
– Government’s genome sequencing facility
EEC Synopsis
Major Demand Generators
IV) Potential Tourism
– Ferry and cruise from Pattaya to Hua Hin, Pranburi and Rayong, and Pattaya to
Koh Kong and Sihanoukville (Cambodia)
– Ecotourism (fruit farms and community lifestyles)
– Medical and wellness tourism
– MICE (PEACH, Nongnooch Tropical Botanical Garden, and new facilities)
Comparable Success Stories

Songdo City, South Korea

Yokohama City, Japan

Comparable Success Stories

Changi Airport / Jewel / Expo /

Changi Business Park,
Singapore
Comparable Success Stories

HK Airport / Disneyland /
Sky City / Ngongping Buddha,
Hong Kong
“OPPORTUNITIES”
Opportunities in the Hospitality Sector
• Demand volume and growth beyond Pattaya
• Diversity (business segments, source markets, industries, price points)
• Weekday-weekend parity and less seasonality
• Repeat business (Bangkok stories), benefiting more than mainstream attractions
• Stability (economic center vs resort destinations)
• Local & expat consumptions (accommodation, F&B, MICE, recreation)
• Investors appetite and capital appreciation
• Exit strategies
• Development and operational efficiencies
“RISKS”
Risks in the Hospitality Sector
• EEC materialization & ramp-up
• Delays
• Shifting trends
• Demand and supply growth
• Regional competition
• Wrong product and pricing for the location
• Environmental issues
• Insufficient infrastructure
• Optimistic underwriting
• No hospitality experience
 “What is Greater Pattaya?
How is it DIFFERENT from cities in Thailand
and regional destinations?
Is it a BEACH or BUSINESS destination?
Which city would be ideal benchmarks?
 THANK YOU
Horwathhtl.asia