HOTELS in Bangkok and Phuket recorded an increase in room occupancy as visitor arrivals surged in the second quarter, according to commercial real estate firm CB Richard Ellis. However, room rates registered a dip as growing supply continued to overshadow demand.

The firm’s Market View of Bangkok Luxury Hotel and Phuket Hotel report revealed that the average occupancy of Bangkok hotels in the second quarter was back to 2009 levels (around 60 per cent).

However, the report added that downward pressure on rates due to increasing competition from new hotels remains a problem, with certain upscale hotels in Bangkok experiencing a four per cent year-on-year decline in ADR to 5,488 baht (US$177).

Meanwhile, the 36 per cent year-on-year growth in arrival numbers at Phuket International Airport pushed up the average occupancy of some the island’s upscale hotels by 52 per cent year-on-year, 47 per cent higher than the same period in 2009.

In contrast, the ADR of upscale hotels in Phuket decreased by three per cent year-on-year as demand for luxury hotels remained weak. While exact ADR figures were not revealed, the report stated that luxury hotels fetched around US$300 per night, first-class hotels charged around US$120-300, and the rate at mid-range hotels was about US$60-120.

The report projected that with Bangkok gaining 9,700 extra rooms and Phuket supply set to jump by 48 per cent between now and 2014, the oversupply of rooms in Bangkok and Phuket would continue to apply pressure on rates.

*The report defined upscale hotels as comprising accommodation in the luxury, first-class and mid-range categories.