Despite a 10-20% decline in European tourist arrivals following the Middle East conflict, commercial property developer UHG is targeting 20% growth this year driven by the opening of a new hotel and the addition of rooms at an existing property.
Wutthiphon Taworntawat, managing director of UHG, said European guests in the first two months of 2026 were robust, rising 15% year-on-year, mainly from Germany, France and the UK.
"We also recorded an increase from new markets in Eastern Europe such as Poland, as well as from Central Asia in Kazakhstan and Tajikistan," he said. "They stay for 3-5 nights per trip, travelling as couples, groups of friends and families."
Locations popular with European tourists include Ari, Lat Phrao, Saphan Khwai and Ratchayothin, as they prefer using rail transport or low-cost airlines to provinces like Chiang Mai, and enjoy shopping at Chatuchak Weekend Market, said Mr Wutthiphon.
However, the Middle East conflict last month reduced the European market by 10-20%, as many had to transit via Middle Eastern hubs that were closed.
As a result, hotels have offered promotions and discounts of 10-15% to maintain occupancy, despite lower room rates, he noted.
"We expect the overall hotel business to remain stable this year. With the launch of a new hotel and the addition of rooms, revenue is projected to grow by around 20% from 2.66 billion baht last year," said Mr Wutthiphon.
UHG plans to open a new hotel near Ekkamai Soi 14 by midyear. With investment projected at 600 million baht, The Quarter Ekkamai has 200 rooms, with rates ranging from 2,500 to 3,000 baht per night.
In February 2026, UHG added 200 new rooms at The Quarter Ladprao on Lat Phrao Soi 4, which previously had 194 rooms. The additional rooms were created by converting 7,000 square metres of office space across six floors within the same mixed-use building, with a budget of 200 million baht.
He said the office market has become highly competitive due to a surge in new Grade A supply, which has begun to encroach on the Grade B segment through price competition.
"We had to reduce rental rates for office space at our properties located outside the central business district to remain competitive," said Mr Wutthiphon.
For example, rents in Ratchayothin were lowered to 700 baht per sq m per month from 850 baht, while in Ramkhamhaeng they dipped to 550 baht from 650 baht, in Ari rents fell to 750 baht from 800 baht, and at Evergreen Place Siam they declined to 450 baht from 550 baht.
"In the future, we may convert office space at other projects into hotels, such as those in Ramkhamhaeng and Ratchayothin, if the hotel segment outperforms the office market," he said.
