Luang Prabang Hotel Market Update By C9 Hotelworks

Posted: 07 Jun 2011 | 6:00 am

One of Southeast Asia's most charming cultural heritage destinations Luang Prabang is fast approaching a tipping point.

According to the new Luang Prabang Hotel Market Update (download full report here) by hospitality consulting firm C9 Hotelworks, a large scale airport expansion and high-speed railway are leading indicators of imminent change.

A runway expansion capable of handling wide-body aircraft will open in 2013, and the following year a high-speed railway link to China will become operational.

Key research data showed 2010's year on year growth in airport passenger arrivals of 14% which tallied in at 77,978. Growth in average room rates and RevPAR compensated for a slight dip in market wide occupancy.

A slowdown in tourist arrivals was driven by two important source markets Thailand and the UK which declined 43% and 16% respectively. Political events and currency deprecation accounted for the trend.

Recent developments on the ground include the opening of a 18-hole golf course by a Korean joint venture company which includes more phases for a 250 room hotel and 100 upscale villas.

The existing hotel supply of 44 hotels will increase 16% by 2012. Two new branded properties from the Anantara portfolio highlight the pipeline.

As to the impact on what has largely been a sustained low impact tourism footprint during the last decade. A short term identity crises looks inevitable as one chapter closes and another is set to begin.

Unfortunately the next development cycle looks set to focus on growth for growth's sake, which is at odds with the destination's unique DNA.

Airlift and rail access improvements will see the emergence of new opportunities for a wider range of hotel products due to a overall upward progression. We expect to see a new mid-scale hotel tier emerge as the broader market edges towards more reliance on volume.

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