Bangkok: New in town

1 May 2019 by Craig Bright
Rosewook Bangkok - Manor Suite

Bangkok’s constant flow of new hotels is great for travellers but a growing challenge for the properties themselves.

Standing in the heart of Bangkok’s Silom central business district, the city’s tallest skyscraper – the abstract “pixel” designed King Power Mahanakhon tower – is an ideal property to house a high-end hotel. When the building first opened in late 2016, it was expected that the opening of Thailand’s first Edition Hotel, the luxury brand developed between Marriott and renowned American hotelier Ian Schrager, would follow shortly after in 2017. But this never happened, leaving the property without one of its planned standout features. In the fourth quarter of 2019, this is set to change with the opening of Accorhotels’ first property under its revived and reimagined Orient Express Hotels brand.

The opening is set to cap off yet another flourishing year for Bangkok’s ever-growing hotel sector, which began with the opening of the Rosewood Bangkok in the city’s Lumpini commercial and embassy district at the end of March. By the time the Orient Express Hotel opens its doors, the Capella Bangkok, Avani Sukhumvit Bangkok and Four Seasons Hotel Bangkok at Chao Phraya River are also expected to have opened.

This flow of new properties into an already crowded market makes Bangkok a delight for visitors wishing to stay with their preferred brand, but it also makes the Thai capital a uniquely challenging prospect for the hotels themselves, both new and old. “There aren’t many brands that are missing in Bangkok,” says Herman Ehrlich, general manager of the Conrad Bangkok, which opened 16 years ago in Lumpini. “Most large brands are represented here, so competition drives the product.”

For newcomers, this makes differentiating oneself from the existing competition essential, a task Rosewood Bangkok’s managing director, Thomas Harlander, likens to “being a special goldfish in a shark tank”. This is made especially difficult by the fact that much of the competition has the highest-quality hardware, making it harder to offer something better.

“In the world of luxury hotels, looking around us every property has beautiful furniture, amazing hardware and wonderful architecture,” says Harlander. “But ultimately, it means nothing if you don’t get the software right.”

For the city’s existing hotels, the plethora of properties with top-quality hardware isn’t something that can simply be ignored, and established brands are having to overhaul their hardware to keep up with the competition. When I visited the Conrad at the end of March, the hotel was in the latter stages of a two-phase renovation project that is giving its main public areas, conference facilities, guestrooms, suites and executive lounge a facelift.

Such large overhauls can be necessary for long-time hotels in Bangkok’s crowded market, but they are not easy to accomplish. “What makes owners hesitate in markets like Bangkok is the tremendous competition and the concern there may not be sufficient yield to justify large renovations,” says Ehrlich. “In this town there are a lot of legacy properties that have gone through soft refurbishes, but owners have been hesitant in driving in huge amounts of money. We closed the lobby for eight months – that wasn’t a cheap experience.”

Across the city in the Bang Kho Laem district – and adjacent to the upcoming Four Seasons and Capella Bangkok hotels – Chatrium Hotel Riverside Bangkok has similarly been undergoing progressive renovations over the past three years. Coinciding with the property’s ten-year anniversary this year, the overhaul has seen its riverside restaurant, ballroom facilities and a sizeable portion of its guestrooms receive a facelift.

“It was a natural time to start doing renovations on the hotel,” says general manager, Patrick Manthe. “In the past few years there’s been an incredible boom in terms of new hotels. The whole river destination is changing dramatically, which is fantastic to see.”

But with all this development, is demand actually strong enough to warrant Bangkok’s ever-growing supply? “For about half of the year, demand is just about sufficient and more hotels will have their place,” says Manthe. “Low season is a bit more challenging – you need to have a good base.”

This challenge isn’t helped by the fact that, despite being a modern capital, Bangkok commands some of the lowest hotel rates in Asia, especially when compared to other major cities such as Hong Kong, Singapore or Kuala Lumpur. “Bangkok still remains a city where you pretty much can get the best deals worldwide for ultra-luxury hotels,” says Rosewood Bangkok’s Harlander. “I wouldn’t call it a burden, rather it’s just the way it is.”

Chatrium Riverside’s Manthe agrees that Bangkok is something of an anomaly when compared to other cities in the region. “The rates are fantastic for customers, but generally you wouldn’t find them in other cities,” he says.

As a local brand, Chatrium Riverside also has to contend with being a smaller player compared to the many international brands that are increasingly making their way into the market. Larger brands have the benefit of being able to leverage their international databases and launch promotions when times are tough, says Manthe, though he notes that the hotel is beginning to be able to do that itself now.

“When I started here the hotel was already well known, but it’s a struggle – if you’re not one of the big brands, you are in a way disadvantaged internationally,” he says. “You can only make up for that by reputation.” That being said, Manthe adds that the hotel has been able to leverage its Thai ownership and service to position itself as a more “authentic brand” compared to the international competition. “It’s a bit of a double-edged sword, but for now it’s working very well and it’s a good niche to be in,” he says.

But the challenging nature of the city’s hospitality sector doesn’t mean there aren’t promising prospects for the future. For starters, visitor numbers to Thailand are continuing to grow, with the figure hitting a record high of 38.3 million in 2018, according to the country’s tourism ministry. This year, that number is predicted to hit 41.1 million. “The 41 million is a projection from the current trend,” tourism minister Weerasak Kowsurat said at a briefing back in January. “If we actually reach that level, I’ll have a headache.”

More than a quarter of this total is made up of visitors from China – Thailand’s single largest source of visitors – which exceeded ten million in 2018. “We have a country next door that pushed out 100 million visitors [across the world],” says Conrad Bangkok’s Ehrlich. “To put that in perspective, Japan sends out about 17 or 18 million people. You look at those figures and China is here to stay.” Visitors from South Korea are also a growing source market.

Thailand’s hospitality sector is also expected to benefit from ongoing investment and development as part of the Eastern Economic Corridor (EEC), a strategic industrial region on the Gulf of Thailand close to Bangkok that is being looked to as the gateway to the Thai government’s future economic model, dubbed “Thailand 4.0”. The government has allocated some THB1.5 trillion (US$43 billion) in funds to the EEC over a five-year period to develop new infrastructure and improve connectivity. “I wouldn’t say the EEC is singlehandedly responsible for the wellbeing of the hospitality industry of Thailand, but is there an advantage ultimately? I’m sure there is,” says Ehrlich.

Within the capital itself, significant development is also under way, especially by the riverside. “The whole destination has just been improved dramatically,” says Manthe. “It’s incredible just how much more development is planned in this area.” Back in November, the new 750,000 sqm mixed-use development Iconsiam opened its doors in Khlong Ton Sai district, bringing with it two large shopping complexes, two residential condominiums – including a Residences at Mandarin Oriental Bangkok – and a large performance auditorium.

In the wake of the ongoing developments along the river, a number of hotels in the area have joined the Bangkok River industry group, a collaborative project comprising partners from the tourism, gastronomy and hospitality sectors aimed at promoting the Chao Phraya River as an alternative to the city’s popular Sukhumvit district.

“The group has grown a lot and it’s been very useful for us to promote the destination at the river,” says Chatrium Riverside’s Manthe. “Yes, we’re competitors, there’s no question about it, but we all compete fairly. There’s such a variety of hotels, in a way we don’t get in each other’s way.”

Other areas of Bangkok are also thriving, and for hotels such as Rosewood and Conrad, the Lumpini commercial and embassy district has its own merits, especially connectivity through the city’s BTS Skytrain. “Bangkok’s not a big, big city, but the traffic is so bad it can take you two hours just to go two kilometres,” says Rosewood Bangkok’s Harlander. “What we definitely have is that we cater perfectly to the businessperson with all the embassies and special office towers around. This is not what you’re going to get if you’re on the river or in a part of Bangkok where you have to rely on taxis. The business is shifting to this part of town as it’s so much more convenient.”

With Rosewood Bangkok being the first new hotel to open in 2019, and the only one expected to open in the first six months of the year, Harlander is confident it will be able to make its mark. “The year 2019 belongs to us.”

New and upcoming hotels in Bangkok

Akyra Sukhumvit Bangkok
Opened May 2018

Waldorf Astoria Bangkok
Opened August 31, 2018

Novotel Ibis Styles Bangkok Sukhumvit 4
Opened October 1, 2018

Hyatt Regency Bangkok Sukhumvit
Opened December 21, 2018

Rosewood Bangkok
Opened March 31, 2019

Capella Bangkok
Opening 2019

Avani Sukhumvit Bangkok
Opening mid-2019

Four Seasons Hotel Bangkok at Chao Phraya River
Opening Q3, 2019

Orient Express Hotel
Opening Q4, 2019

Kimpton Bangkok
Opening 2020

Steigenberger Hotel Riverside
Opening Q1, 2020

X2 Vibe Bangkok Udomsuk Station
Opening 2021

Holiday Inn Express Don Mueang
Opening 2022

Newly renovated hotels

The Sukhothai Bangkok – Club Wing
Completed December 2018

Shama Lakeview Asoke Bangkok
Completed April 3, 2019

Mandarin Oriental Bangkok – River Wing
Reopening October 2019

Conrad Bangkok
Current phase completed

Chatrium Hotel Riverside Bangkok
Current phase completed

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