Market Report: Chiang Mai, Thailand

After a buoyant period of booming tourism demand, Chiang Mai has felt the impact of new supply on top-tier hotel performance. Heightened hotel investments, along with infrastructure bottlenecks, will likely dampen near-term growth. Passive investors could continue to take a long-term view of this unique charming town’s potential. Major transport improvement plans, the UNESCO World Heritage Initiative Project and the vested interest of a property tycoon in developing his riverside land bank into another tourism landmark give rise to optimism for the destination. Nevertheless, opportunistic and institutional players will remain cautious until Chiang Mai’s next upswing returns in earnest.