With the opening of the long anticipated Park Hyatt Bangkok, how will pricing change going forward? How does the brand compare in the Thai capital?
Bangkok, Thailand is one of the best hotel markets for high-end properties at affordable prices for almost any budget. A simple perusal of options for nearly any date (but especially during the “rainy season” – which amounts to about 20 minutes of afternoon rainfall per day – from April to October) on your favorite OTA will show you what I mean. Marble floors in bathrooms, separate rain shower heads and stand-alone soaking tubs, the ever popular Japanese toilet; all yours for $90-150/nt (USD). Particular standouts are the Le Meridien Bangkok, Sofitel Sukhumvit, or even the St. Regis for a completely reasonable $180/nt. By US standards those numbers usually amount to a roadside Fairfield Inn or perhaps a Courtyard on the edge of town, but in the Big Mango you can go all out and stay in a luxury, five-star hotel with all the amenities for very little money.
I am not shy about my love for Hyatt hotels generally and in the past I have really loved the Grand Hyatt Erawan and their entire team. Their pricing at this property, however, has recently simply gotten out-of-hand and is completely unsustainable.
For the last 25 years there has been just a single Hyatt hotel in the city, the Grand Hyatt Erawan – by all accounts a very nice hotel. But by comparison, as is found in most cities where Hyatt operates, they are dwarfed by the other brands instantly. Here is a short list of the number of properties by other major western brands in the city prior to the Park Hyatt opening two weeks ago:
- Accor – 66 properties (yes, 66!)
- SPG – 10 properties
- IHG – 9 properties
- Marriott – 9 properties
- Hilton – 5 properties
- Club Carlson – 4 properties
- Hyatt – 1 property
The brand’s limited footprint meant that Hyatt had less incentive to be competitive in pricing their property as their true loyalists would choose them over less expensive newer properties because of the elite benefits they receive and the accumulation of points. And Hyatt’s market hubris showed.
Grand Hyatt Erawan Pricing
The Grand Hyatt Erawan is a favorite for us but really for the soft product and the people we have met. The location is excellent, but some of the hotel needed some updating the last time we stayed. I understand that some of this renovation has been completed, but pricing has still outpaced rivals.
The Grand Hyatt Erawan’s pricing for a standard room is between $180-220/nt (with tax), up from about $140-180 a year ago. In that time the US Dollar has only gotten stronger against the Thai Baht, albeit by only about 5%, but Hyatt’s increase couldn’t be blamed on currency conversions; if anything rates should have dropped. Historically the rate was around $140/nt, which put the Grand Hyatt Erawan was on par with other hotels of a similar standard.
However, weeks before the Park Hyatt Bangkok opened the Grand Hyatt Erawan reached as much as $220/nt. That makes the property more expensive than several brands upmarket from the property. For example, take the St. Regis Bangkok, just a brisk five-minute walk from the driveway of the Grand Hyatt, where guests can secure a park view and a butler assigned to their room, $180-220/nt. Or perhaps consider the Conrad which routinely hovers around the $160/nt price point. At Hilton properties, even middle tier Gold guests free breakfast with rooms at the Conrad that are generally larger with the same level of updating and luxury options.
If you’re interested in seeing just how brazen the Grand Hyatt Erawan can be when they believe they are pricing to a captive audience, check out these rates from the American Express Fine Hotels and Resorts program.
Here is a screenshot of the currency conversion on the day I priced the property.
If you weren’t insulted as an American Express card holder looking at the property, you should have been. The hotel will trade guests a $100 USD credit to the spa (which is not enough to pay for a full hour-long massage) for a $260 premium over the top of their already too high $160/nt rate. The usual premium felt insulting (excluding Fine Hotels and Resorts price gouging) when there was a slightly higher price over comparable properties in the city of about $20-40/nt. However, in exchange for three full breakfasts every day, late checkout, and lounge access I was frankly willing to pay it the little extra required to stay at a Hyatt.
Fair enough, if Hyatt knows they have the ability to charge a little more because their brand loyalists only have a single option in the city, who am I to get in the way of commerce? But the price jump on AMEX Fine Hotels and Resorts is completely disrespectful to me as an AMEX card holder and as a Hyatt loyalist. I understand that I should expect to pay a little bit more for some of the benefits it the program provides, but this staggering jump assumed that I either didn’t know math or how currency exchange rates work, or that I would never bother to look up market rates even found on Hyatt’s own website. Either way, I won’t likely trust Fine Hotels and Resorts going forward, nor Hyatt for pricing Bangkok on their site.
Park Hyatt Bangkok Pricing
Secure your seatbelts for the wild ride that is Park Hyatt Bangkok’s nightly rate.
Before I take you down that road, let me just preface this with the understanding that hotel rates in relation to quality of rooms and amenities cannot be taken in a vacuum – market conditions and location must be factored into any analysis. Good evidence of this is the New York City market, where a room the size of some walk-in closets can run from $200-300/nt with limited amenities. There are other examples of this but the important point is to show that market conditions (the amount of comparable hotels in a given market) and location (can the market support higher prices due to business or leisure demand).
Starting nightly rates for a standard room at the new Park Hyatt Bangkok began around $300-350/nt but eased lower enough for me to secure a $270/nt rate. Matthew was not as lucky.
To properly compare the hotel to other similar properties in the city we need to look at hotels that are at the top of their brand’s range. I would submit the following equivalents:
- Conrad for Hilton
- Ritz-Carlton for Marriott (sub JW Marriott as Ritz does not have a presence)
- Regis for SPG
- Kimpton for IHG
- Sofitel for Accor
- Radisson Blu for Club Carlson
Nightly rates for those equivalents were as follows:
- Conrad $160
- JW Marriott $220
- St. Regis $180
- Kimpton $200
- Sofitel $140
- Radisson Blu $98
Perhaps it would be better to include some powerful brands that are global but more limited in scope and offer a comparable product in the city:
- Shangri-La $180
- The Peninsula $200
- Mandarin Oriental $340
The market price leader for the last five years has been the Mandarin Oriental so it’s important that we look at some of the features of the property. It is built to a high standard, has river front access, a BTS and a metro line steps away, and was the first Mandarin Oriental built. It has nostalgia both for the city and frequent visitors over the years, as well as the many movies in which it has been featured. Before it was “a thing” the property featured their own Louis Vuitton.
The Park Hyatt Bangkok is built on top of a brand new high-end mall (Central Embassy) and is located on the vaunted Wireless Road, home to Bangkok’s busy diplomatic quarter. It is of course brand new and there is a high level of quality to the finish of the property.
However, “finish” is something that the property can only claim on the rooms they have actually finished, a mere 40 of 220. The rooftop bar and grill looks stunning… from artist renderings. The water pressure is great at the pool, but not so great in some of the rooms on higher floors that do not have water pressure above them to keep a good rate. I covered the property in a recent, near glowing review, but struggled then as I do now with comparing a partially opened, partially completed hotel with the market leader and suggesting there is parity.
The market has clearly reacted too with initial room rates dropping significantly, and that is to fill just the 40 odd rooms they have available today. Rates for a random day in July show that rates are now as low as $250/nt, 30% less than opening prices.
Pure Conjecture on Future Hyatt Pricing in Bangkok
Hotel rooms are perishable just as are airline seats, you simply can’t sell a seat on a plane that has already taken off, you can’t rent a room once the night is over. There is then a very delicate balance between holding your rate to support future bookings and filling every room you reasonably can in your property. People spend on food and beverage when they stay in a hotel, at breakfast, by the pool, in the lobby waiting for a colleague – but that’s only if they are guests in the first place.
If the Park Hyatt has already had to offer promotional rates to as low as $220/nt from $350/nt to fill just 18% of their future total rooms, how on earth does the brand think that they can return to those prices later when they have six times the inventory?
The Grand Hyatt has put themselves in a near laughable situation as well. Just as their Hyatt exclusive on the city is about to disappear, they have increased their prices to the point that they are almost competing with the Park Hyatt though those have too also slid. Assuming that you were a Hyatt loyalist and had a choice of a brand new Park Hyatt with a full breakfast in the restaurant, or a 25-year old Grand Hyatt with breakfast on a buffet line in the lounge – wouldn’t you spend an extra $20/nt for the added luxuries?
Ultimately, I believe that the Park Hyatt Bangkok is going to drag both the Grand Hyatt and their own rates down as more rooms become available. Central Group, the owner of the hotel, has been delayed in opening the property for almost three years. During that time costs have soared and continue to climb as upper floors are built out. They are three years behind earning revenue from the property. Unlike the Grand Hyatt Erawan ,who have increased prices in the face of new rooms becoming available, the Park has shown a desire to ease pricing to fill rooms. Over time as the Park Hyatt Bangkok starts to steal room nights away from Grand Hyatt Erawan, the lower tier property will have to fall in line assuming they do have more vacancy.