Thailand’s hotel sector is entering a phase of operational maturity, with the focus shifting from aggressive inventory expansion to more sophisticated cost management and asset flexibility.
While the national room pipeline has grown over the past 18 months, the projected average supply addition of three per cent is notably lower than growth levels seen over the previous decade.
According to data presented by Jesper Palmqvist, area director, Asia Pacific at STR, a division of CoStar Group, the industry is recalibrating for a more volatile demand environment. Owners are moving away from traditional blanket cost-cutting measures in favour of higher-yield strategies.
This is particularly evident in the luxury segment, which recorded a 3.4 per cent increase in average daily rate (ADR) despite a 7.3 per cent decline in occupancy during the first 11 months of 2025.
Palmqvist noted that the industry is “shifting to variable staffing by demand clusters”, with greater focus on guest mix and the use of energy efficiency as an asset lever to lift gross operating profit (GOP).
“The goal is not lower costs; it’s flexible costs,” Palmqvist emphasised in his analysis of current owner trends.
This flexibility is extending to F&B operations, where owners are increasingly outsourcing to strong local partners or replacing a single signature venue with “three average outlets”. Other approaches include pop-up and rotating chefs in place of permanent concepts, and hotel kitchens doubling as content engines for events, social media and PR.
Development strategies are also being viewed more pragmatically, with a growing preference for acquisitions over greenfield projects.
The near-term outlook for the capital remains conservative. Bangkok is forecast to record modest growth of one per cent in both occupancy and ADR throughout 2026, with performance expected to improve over the course of the year and more meaningful recovery anticipated by 2027.
On the future of hotel design and functionality, Palmqvist highlighted a clear shift in development priorities.
“Hotels are now designing for operations first, aesthetics second, with fewer keys and higher ADR in mind,” he stated.
