1. Craig Collins, Senior Vice President
A HOTEL MARKET REVIEW OF KEY TOURIST DESTINATIONS IN THAILAND BANGKOK PHUKET
Craig Collins, Senior Vice President
February, 2002

2. Presentation Outline Asian Economic Environment
Asian Hotel Market SWOT Analysis
Thailand Tourism Market
Bangkok and Phuket
Thailand Hotel Market
Thailand Hotel Investment Market

3. Asian Economic Environment
Source: Consensus Economics

4. Asian Hotel Markets – SWOT Analysis
Strengths
Limited supply pressures in most markets
Geographic isolation of many Asia Pacific hotel markets from the US and Afghanistan
Historically low interest environment
Strength of Indian, Chinese and Australian economies
Regional government support of faltering tourism industries
Weakened currencies against the US dollar, encourages international inbound and domestic tourism
Opportunities
Growth in discount airlines, stimulating intra-regional travel
‘Safe haven’ markets capturing displaced leisure ad conference demand – eg Phuket
China’s entrance into the World Trade Organization
Narrowing of pricing gap between buyers and sellers
Increased domestic and intra-regional travel
Hotel stock valuation pressures may encourage consolidation
Weaknesses
Dependence on few international air carriers, particularly the US and Japan routes
Reduction in air services
Lower US visitor demand
Further contraction of already weakened Asian economies of Japan, Singapore and Taiwan.
Political instability of Indonesia and the Philippines
Falls in consumer and business sentiment
Threats
Further weakening of the US & Japanese economies
Conservative hotel lending practices – reduction in available debt
Further political tension in key Asian markets
Banks inactive in forcing the sale of assets with non-performing loans

5. Thailand Tourism Market Historic International Visitors
Looking at the long term growth trend, international visitors to Thailand have almost doubled over the past decade - growing at an annual average of 7.1%. (
Source: Tourism Authority Thailand

6. Thailand Tourism Market Monthly International Arrivals 2000 - 2001
Source: Tourism Authority Thailand

7. Thailand Hotel Markets Bangkok – 4 & 5 Star Hotel Performance
Source: Jones Lang LaSalle Hotels

8. Thailand Hotel Markets Phuket – 4 & 5 Star Hotel Performance
Source: Jones Lang LaSalle Hotels

9. Thailand Hotel Market - Outlook
The outlook for Thailand’s hotel markets remains positive, due to strong demand fundamentals and minimal supply increases.
BANGKOK
Given the global economic downturn, room rate is expected to experience downward pressure in 2002.
Occupancy is expected to improve due to strong tourist arrivals, the perception that Thailand is a relatively safe destination and the limited new supply in the market
Limited new supply - only one new 5 star hotel is anticipated to enter the market in 2002 (the Conrad)
PHUKET
Similarly, room rate is expected to experience downward pressure in 2002.
Occupancy is expected to improve as Bali (Phuket’s primary competitor) continues to suffer from the political and social instability in Indonesia
Modest supply increases - only two new 4-5 star hotels opened in 2001 (JW Marriott and Evason Phuket)

10. Thailand Hotel Market Comparative Trading Performance Expectations
Source: Jones Lang LaSalle Hotels’ HISS

11. Thailand Hotel Investment Market Asia Pacific Investment Climate
Transaction activity in 2002 likely to be similar if not greater than 2001
Consolidation/privatisation of LPT’s
Focus on investment in larger 1st class and luxury assets
Resorts to be sought after
J/V opportunities through corporate investment in hotel companies in Asia
Japanese owners to continue divestment

12. Thailand Hotel Investment Market Hotel Investment Cycle – Asia Pacific
1 Early Downturn
2 Late Downturn
3 Trough
4 Early Upturn
5 Late Upturn
6 Peak 6 6
Singapore 5 1
Jakarta, Kuala Lumpur, Melbourne, Phuket
Beijing, Brisbane, Seoul
Tokyo
Shanghai
Bali, Hong Kong, Mumbai, New Delhi, Sydney 2 4
Bangkok
Manila
Auckland, Gold Coast 3
Source: Jones Lang LaSalle Hotels’ HISS

13. Thailand Hotel Investment Market Comparative Short Term Investment Intentions
Strong Buy
Bali (47.4%)
Bangkok (42.1%)
Shanghai (36.8%)
Phuket (35.3%)
Sydney (32.7%)
Beijing (31.3%)
Strong Build
Seoul (40.0%)
Phuket (35.3%)
Beijing (31.3%)
Strong Sell
Gold Coast (41.2%) .
Source: Jones Lang LaSalle Hotels’ HISS

14. Thank You