BANGKOK, 7 MAY 2025: Hotel investment growth in Thailand will likely normalise in 2025, with factors including the entry of new high-quality hotels and favourable occupancy and average day rates (ADR) easing the record trading momentum seen in 2024.
According to JLL ((NYSE: JLL), hotel investment is expected to stabilise in 2025, with over THB13 billion (approximately USD385 million) in capital projected to be deployed into Thailand’s hotel sector.
In 2025, JLL estimates that Bangkok transactions will continue dominating the investment market, comprising nearly 60% of all deals nationally. Significantly, JLL analysis shows that the average transaction size will grow to THB1.8 billion (USD53.2 million), 80% higher than the 10-year average of THB1 billion (USD29.5 million). Furthermore, the market in 2025 is expected to be dominated by single asset deals, consistent with transactions including the Hyatt Regency Bangkok Sukhumvit, the largest ever single asset hotel deal in Thailand history closed by JLL in 2024
JLL believes that strong tourism momentum and growth in trading performance amongst domestic and foreign investors in Thailand’s hotel market were exceptional events. This surge in investor appetite led to a record-breaking volume of hotel transactions in 2024 of THB22 billion (approximately USD650 million), reaffirming Thailand’s status as a core investment market in the region.
Performance in higher-end hotel segments is likely to stabilise, whilst economy to midscale hotels will continue showcasing substantial improvement in 2025. However, the pace of investment, more in line with historical levels, is expected to open new conversations with investors and operators on debt and green financing as trading volumes tighten this year.
“The fundamentals of Thailand’s hotel market are extremely appealing to investors, further exemplified by the expected diversification of investment patterns and the mainstreaming of more innovative and flexible approaches to debt. Financing mechanisms play a critical role in facilitating growth, renovations, and new developments within the economically important Thailand tourism industry, but we see greater optionality emerging with non-bank financial institutions complementing traditional bank lenders to support anticipated tourism demand,” says JLL Hotels & Hospitality Group, Asia PacificExecutive Vice President, Investment Sales Pimpanga Orn Yomchinda.
According to JLL, commercial banks extend substantial long-term credit facilities at competitive interest rates, operating under the stringent regulatory framework overseen by the Bank of Thailand. They focus on large-scale, established hotel projects supported by comprehensive due diligence processes. To proceed, long-term credit facilities generally emphasise collateral, predominantly the hotel property itself, coupled with financial covenants.
Conversely, non-bank financial institutions — leasing companies, finance corporations and specialised lenders — are playing a far more active role in meeting financing demands and flexibility. Investors increasingly treat this segment as more adaptable and innovative in providing financing solutions, effectively addressing market segments underserved by traditional banking channels. Although interest rates are generally higher, reflecting increased risk exposure, these institutions often structure bespoke financing packages, coupled with expedited approval processes and flexible terms, that accommodate the cyclical nature of hotel revenues.
Furthermore, as global awareness of environmental issues grows, governments, lenders, and borrowers have been placing more weight on the environmental impact of hotel operations and developments. This shift has led to the introduction of sustainable financing options offered by some major Thai banks and international lenders in the Thai market. The evolution reflects changing investor priorities while anticipating future regulatory changes and evolving consumer preferences in the hospitality sector.
“Sustainability has never been more critical to both owners and operators of Thailand’s hotels and their broader stakeholders. The contractual commitments made with lenders and broader stakeholders through sustainable financing, facilitated by the Thailand Taxonomy and issued by the Bank of Thailand, serve as a public demonstration of these stakeholders’ dedication to sustainability, which has been highlighted as a key benefit for corporate reputation and stakeholder trust. Both bank and non-financial institutions will play a critical role in this ongoing financing transition in Thailand,” says JLL Hotels & Hospitality Group, Asia Pacific Vice President, Strategic Advisory & Asset Management, You Ree Park.
Read more here: https://www.jll.co.th/en/trends-and-insights/research/thailand-hospitality-financing-guide-2025.
