Largely driven by the strength of luxury travel, Thailand has been a bit of a darling for hotel investors, but now facing geopolitical headwinds, the country could have a more complex outlook than before.
Speaking on the monthly Hotel News Now podcast discussing hotel activity in the Asia Pacific region, STR area director for Asia Pacific Jesper Palmqvist said even high-end travel has suffered in that market in recent months because of that uncertainty.
"What happens is you have a couple of months of softer demand," he said. "It does make a difference. Mid-March to mid-May was [down] 5 to 10 percent points in occupancy compared to last year, and rates are not great either. So my first question is, 'Is luxury holding up better?' Because that's usually what happens. But not in Bangkok. Luxury and upper upscale actually dropped the most in recent months."
A border dispute with neighboring Cambodia is chief among Thailand's issues, at the moment.
But Palmqvist noted people still see significant opportunity for investment, especially with the potential of legalizing casinos.
"There's faith in Thailand as a market. ... And there's so much more that could be done and change in terms of visa policies, investment, regulation, transparency," he said, noting Thailand has a track record of "four or five decades of very strong and resilient tourism activity."
For the rest of the interview with Palmqvist, including discussions on the trajectory of hotel performance in China, the broadening to more secondary markets, the rise of banded residences and just how much longer Japan can continue its hot streak, listen to the podcast above.