For those looking for new Asian resort success stories, they need to look no further than Krabi. A high velocity growth spurt which has seen airport passenger arrivals multiply by 5.4 times over the past decade, has further accelerated during last five year by a remarkable 33% compound annual growth rates.
From a mere 376,000 who arrived at the airport ten years ago, last year the number exceeded 2 million according to C9 Hotelworks newly released Krabi Hotel Market Update. Is Thailand’s continued Chinacation behind the numbers? Connectivity certainly remains a factor, though 27% of total flights landing at the destination came from Greater China.
The offshoot of the boom resulted in tourism receipts to Krabi totaling an estimated 84 billion Thai Baht last year, and has more than doubled since 2016. Despite China sitting in a starring role, Scandinavia and Russia both registered double digit arrival growth for 2016. With mounting airport traffic a plan is underway to upgrade the two existing terminal buildings at Krabi International as well as construct a third together with extending aircraft parking slots.
Speaking about hotels, despite mounting rate pressure across most of Southeast Asia’s resort markets STR’s Area Director Jesper Palmqvist noted “ Krabi hotels’ average rate growth in the first quarter of 2017 spiked up by nearly 3%, off-setting a 5% increase in new supply. Demonstrated demand is clearly stimulating higher rates.”
Looking across the bay and comparing the trading story to mainstream Phuket, Krabi’s broad international standard hotel market for FY2016 outperformed that of Phuket in terms of market-wide ADR, which raised the overall RevPAR for the Province, according to STR.
C9’s report indicates that registered accommodation establishments in Krabi at year-end of 2016 totaled 502 properties with 19,905 keys. Non-registered accommodation continues to represent a considerable portion of inventory in the market, though Thailand’s government is becoming increasingly active in enforcing hotel licenses.
As to whether Krabi’s all important supply and demand fundamentals remain balanced, C9 Hotelworks Managing Director Bill Barnett forecasts “a total of 598 new keys are anticipated to enter the hotel market throughout 2017, with 160 keys already introduced in Q1 of this year. The numbers speak for themselves and bode well when stepping back and seeing how the last five years have established a strong platform for continued success.”
To download and read the full report http://www.c9hotelworks.com/downloads/krabi-hotel-market-update-2017-05.pdf