With a possible oversupply situation now looming, the recent rapid growth in the number of top-end serviced residence buildings in Bangkok is tapering off, and operators are now working to differentiate their properties to stay ahead of the competition.
So far, demand has kept pace with the growth in supply and, according to a BTN Asia-Pacific straw poll, management companies of upscale properties have been able to raise their published rates per square metre by an average 6.6 per cent over 2003.
While several new properties emerged in the past year, few new upscale serviced residences will be entering the market in 2005. One such property is Oakwood Premier Bangkok, now under construction in the Sukhumvit Road area, where the SkyTrain intersects with the new subway system.
With more properties for consumers to choose from, unique selling points (USP) have become a prominent feature in the brochures of many of Bangkok’s newest properties.
For the 462-key Meritus Suites State Tower Serviced Residences, which recently opened in Bangkok’s central business district, the three key words are – “location, location, location”. The suites occupy 17 floors of Challenge Property’s State Tower, which also has 650 condo units, 460 office units and 90 retail units.
Special features include broadband Internet access in all the suites, a private ground-floor entrance and a three-storey Dome Restaurant on the top floor with an oyster bar, an Italian restaurant and an outdoor restaurant.
Location is a plus for another new serviced residence, Ascott Sathorn Bangkok, which opened at the end of October 2004 and is being touted by the Ascott Group as its premier property in Thailand.
A defining feature of the 177-key Ascott Sathorn is a 3,500m2 fitness centre with swimming pool and spa. Other USPs include a hip nightspot called Hu’u and wireless Internet connectivity throughout the property.
The 277-unit Centre Point Wireless Road opened last year is the newest member of Quality House’s inventory of Centre Point serviced residences. At a minimum price of 1,447 baht (US$37) per square metre, it is also the most expensive of the group’s six Bangkok properties.
However, at the top of the heap in terms of price is Accor’s 150-unit Natural Ville, with minimum rates as high as 1,774 baht per square metre.
General manager, Mr Charles Wrightman, said despite the price and the increasing competition, occupancy remained very strong at 96 per cent.
“At the moment the average occupancy in Bangkok’s central business district is around 81 per cent. But if everyone jumps on the bandwagon and more properties open, the oversupply may bring occupancy down,” he said.
A new spa opened at Natural Ville on December 1.
Balancing the increased supply of residences is an influx of longstay guests from regional markets. Marriott International area director of sales and marketing, Mr Dominic Sherry, said Hong Kong, Japan and Singapore were now the main source markets for the 164-key Mayfair Marriott Executive Apartments.
“The Mayfair is more of a boutique property than other Bangkok residences and the intimate and personalised service appeals to the high end of the Asian market,” he said.
While the number of guests may be on the increase, general manager of Accor’s Chateau de Bangkok, Mr Olivier Berrivin, said average length of stay had been decreasing since the middle of 2004.
“The average length of posting for expatriates is decreasing. Also, guests now have many more options in terms of residences and don’t hesitate to change to a new property to get more benefits,” he said.
This holds true for CB Richard Ellis properties, the Royal President Grand President and President Solitaire Executive Residences. Although occupancy rates are running above 90 per cent, average length of stay for nearly all Richard Ellis properties is only one month.
The increasing competition and falling length of stay will keep Bangkok serviced residences on their toes – good news for business guests who can anticipate relatively stable prices for some time to come.
