Total Supply by Location, Q Existing Supply

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1 CB RICHARD ELLIS Phuket Hotel Second Quarter 29 Quick Stats Occupancy (%) Supply ADR RevPar Change in Q1 9 Change in Q2 9 The major factor in Q2 29 is the reduction in occupancy rates. Occupancy was down overall by 12.3% to 45.9% y-o-y. All grades of hotels were affected, the hardest hit being first class hotels which saw a drop of 13.2% to 49.4% y-o-y. Rates in luxury hotels also showed a decline showing a decrease of 12.2% to 39.8% y-o-y. Mid range hotels continued the trend with occupancy rates now at 48.4%, down 11.5% y-o-y. With poor occupancy levels Average Daily Rates (ADR) also suffered, with upscale hotels decreasing 27.6% y-o-y to THB 6,542. Luxury hotels have been most affected with a decline of 33.9% y-o-y to THB 13,783, this figure will be most alarming as figures stood at THB 2,892 in Q1. Mid range hotels however faired much better, recording only a slight reduction of 1.5% y-o-y to THB 2,25. Quarterly Highlights 11 projects are reportedly on hold, comprising a total of 1,415 keys. This accounts for up to 29.9% of the estimated future supply. Excluding these projects, the estimated future supply is 12,925 keys in 18 hotels within 211. The West Coast (South) remains the key area for hotel developments, with the main beach areas of Patong, Karon and Kata accounting for up to 52.2% of the total supply (21 hotels; 5,17 keys. Q2 saw six new hotels were added to the future hotel supply list. Half of them are due for completion by the end of 29. Although demand was down in Q2 29 the total supply of upscale keys increased by 211 to 9,63, an increase of 2.2 q-o-q and 17.5% y-o-y. The additional supply came from an expansion of the Radisson, Phuket Panwa Beach. This increase doesn t look like stopping with plans for an additional 4,737 new keys. These will be divided between 27 future projects and 3 expansions, which are all in different phases of planning and development. Given this estimate, total supply could reach 14,138 keys within 211, representing a 47% growth on existing supply. It is clear that all hotels are offering discounted rates and incentives to lure visitors. Hotels are also trying to attract local tourists, as foreign arrivals have plummet and hotels can no longer depend solely on this group alone to generate their revenue. We expect to see further discounts being offered throughout 29 as low season approaches. Supply Total Supply by Location, Q2 29 Location No. of No. of Hotels Rooms % Share Inland.% West Coast (North) % West Coast (Central) 17 2, % West Coast (South) 21 5, % East Coast (North) % East Coast (South) % Islands % TOTAL 55 9,63 1.% The total supply in Phuket increased by 211 keys to 9,63 keys in the second quarter of 29 (+2.2% q-o-q and 17.5% y-o-y). The additional supply came as a result of opening of first-class hotel Radisson Phuket Panwa Beach. The West Coast (South) remains the key area for hotel developments, with the main beach areas of Patong, Karon and Kata accounting for up to 52.2% of the total supply (21 hotels;5,17 keys), with no new supply added this quarter, followed by West Coast (Central) covering Bang Tao, Surin and Kamala with 26.3% (17 hotels; 2,526 keys) and West Coast (North) with 9.5% (7 hotels; 917 keys).

2 Total Supply by Grade, Q2 29 Grade No. of Hotels No. of Rooms % Share Luxury % First-class 18 3, % Mid-range 31 5, % TOTAL 55 9,63 1.% New Supply New Supply, Q2 29 There is no significant change in the proportion of total hotel supply between the West and East Coasts. 88% of the total upscale hotel keys are concentrated on the West Coast since this area still absorbs the majority of the demand from tourists, particularly Patong and Karon, which remain the two most popular beaches and accounting for 42.9% of total supply on the island. The West coast also offers more amenities and leisure activities for tourists, as well as better quality beaches compared to the East. In terms of hotel grades, mid-range hotels account for the majority of hotel supply in the upscale market, with 5,638 keys in 31 hotels (58.7%), followed by first-class (18 hotels; 3,533 keys) and luxury (6 hotels: 432 keys). Name of Hotel Class No. of Rooms Cape Panwa The Radisson Phuket Panwa Beach First-class 211 TOTAL 211 Future Supply by Location Existing and Future Hotel Supply by Location (includes all hotels), Q2 29 Islands Cape Panwa Rawai Beach Makham Bay Siray Bay Sapam Bay Cape Yamu Por Bay Emerald Bay Nai Harn Beach Kalim Beach Kata Beach Karon Beach Patong Beach Kamala Beach Naithorn Beach Surin Beach Bang Tao Nai Yang Beach Mai Khao Inland Future Supply , 1,2 1,4 1,6 1, 2, 2,2 2,4 2,6 During Q2, 29, 211 additional hotel keys were completed as a result of The Radisson Resort Panwa Phuket. The newly completed Resort is a 211-key, first-class hotel located on Makham Bay. The 5- star resort consists of a mixture of villas and sea-view rooms located along Makham Bay beachfront. There is a slowdown in new hotel keys being added to the market with several projects reportedly on hold or facing delays. The Radisson Phuket Panwa Beach opened late this quarter, The Radisson Phuket Panwa Beach features 211 keys, including 9 Ocean Villas and 15 Pool Villas, Deluxe Sea-View Rooms and Suites. The beach front hotels facilities include a spa, life-style and fitness centre, pool bar, a selection of restaurants, a 12-capacity ballroom and a dedicated kids club. In theory, based on announcements, there are plans for 4,737 new keys in 27 future projects which are in different phases of planning and development. In this quarter, six new hotels were added to the future hotel supply list, half of them are due for completion by the end of the year. These projects are: Pullman Phuket Arcadia, Sunwing Resort Kamala Beach, The Shore by Katathani, Ibis Kata, Langham Place Miora Resort & Spa and Westin Siray Bay Resort & Spa. All but one of the projects (Westin Siray Bay Resort & Spa) are located on the West Coast of the Island. Page 2 MarketView Phuket Hotel Second Quarter 29

3 Demand Average Occupancy Rates, 23-Q % 8.% 6.% 4.% 2.%.% Luxury Mid-range Q1 29 Q2 29 Average Occupancy Rates, 23-Q2 29 First-class Average Year Luxury First-class Mid-range Average % 68.5% 68.4% 64.9% % 77.7% 61.% 67.8% % 52.5% 48.6% 5.7% % 65.9% 58.3% 59.4% 59.7% 71.4% 63.4% 64.9% 95.5% 83.4% 89.8% 89.6% 52.% 62.6% 59.8% 58.1% 54.% 55.7% 71.6% 6.4% 71.9% 59.7% 62.5% 64.7% Q % 65.3% 66.% 62.3% Q % 49.4% 48.4% 45.9% Change Y-o-Y -12.2% -13.2% -11.5% -12.3% Despite the Tourist Authority of Thailand s (TAT) effort to aggressively promote tourism in Thailand in key markets, the effects of the global recession and the prolonged political crisis in Thailand led to a fall of 12.3% y-o-y in the overall occupancy rate in selected upscale hotels in Phuket. During Q2 29, occupancy rates declined in all hotel grades, being the low season period in Phuket. The hardest hit hotels area first class hotels (-13.2% to 49.4% in Q2 29). Also highly affected were luxury hotels (-12.2% to 39.8% in Q2 29) and average hotels (from -12.3% to 45.9% in Q2 29), compared to the same period last year. Least affected were mid-range hotels (-11.5% to 48.4%.) There has been a decline in occupancy rates compared to the previous quarter, with a overage decrease of 12.3% across all hotel classes, with first-class hotels showing the greatest decline (-13.2%.) However, a q-o-q decline is expected during low season. The week long closure of the Bangkok airports in December have had a prolonged effect on Thailand s tourism industry, coupled with the effects from the global financial crisis which has led to a decline in recreational travel and tourism globally. However, Phuket is still faring better than many provinces in Thailand being one of the country s leading tourist destinations. According to statistics from Thailand Hotels Association (THA) average occupancy is 3% in Chiang Mai and 4% in Bangkok and Pattaya. Page 3 MarketView Phuket Hotel Second Quarter 29

4 Price Average Daily Room Rate (ADR), 23-Q2 29 USD Q 1 29 Q2 29 Average Revenue Per Available Room (RevPar), 23-Q2 29 USD Luxury (USD) Mid-range (USD) Luxury (USD) Mid-range (USD) First-class (USD) Average (USD) First-class (USD) Average (USD) Q 1 29 Q2 29 In order to stimulate the tourist industry after suffering from the contraction in demand as reflected in lower occupancy rates, the majority of hotels are offering discounted room rates and various incentives. Overall, the ADR of selected upscale hotels has decreased by 27.6% y-o-y, with a further 16.6% fall compared to the previous quarter. The ADR of First-class hotels has been most affected with 34% decline y-o-y with mid-range hotels least affected with only 1.5% decline y-o-y, in Thai Baht terms. Hotels are also offering discounted rates in an effort to draw more local tourists to Phuket, which otherwise is heavily dependant on foreign arrivals. The declines in occupancy rates across first class and mid-range hotels during Q2 29 coupled with a lower ADR resulted in declines in RevPAR of between 2.4% to 36.3% y-o-y, in Thai Baht terms. RevPAR did show a q-o-q decline by 5.8% on average for all hotel grades, possibly because the low season period started this quarter. During this period, the average RevPAR of selected upscale hotels in term of THB, USD, EUR and GBP were THB 2,748 (-33% y-o-y), USD 81 (-36.6% y-o-y), EUR 49 (-4.2% y-o-y) and GBP 58 (-11.2% y-o-y) respectively. The prolonged effect from the airport closure has clearly affected Phuket hotels, particularly as it occurred during the high season. Going forward there are more challenges ahead, as the impact from the Songkran riots and the spread of H1N1 flu are likely to impact performance in Q2 and the rest of 29. Page 4 MarketView Phuket Hotel Second Quarter 29

5 MarketView Phuket Hotel Outlook With demand low and an over supply of hotels in Phuket we will no doubt see room rates reduced further to entice visitors. Hotels will also be put on hold until the global economy recovers significantly to make new development viable. Tourism rates for the whole of Thailand are down and coupled with the political uncertainty and the strong financial standing of the Thai Baht we will see the hotel market in Phuket struggle for the remainder of 29. CBRE Research Services Subscription Products Phuket Property Report For more information regarding our Phuket Services MarketView, please contact: Khanitha Jarukirati, Associate Director Investment & Resort Land Services T ext 15 F M CB Richard Ellis (Thailand) Co. Ltd. 46th Floor, CRC Tower, All Seasons Place, 87/2 Wireless Road, Lumpini, Pathumwan, Bangkok 133 The Phuket Property Report, the latest quarterly subscription report by CB Richard Ellis Research Services in Thailand, is an initiative designed to bring professional analysis and transparency to the growing Phuket property market. The report provides detailed information and analysis from CB Richard Ellis comprehensive and unrivaled Phuket and overall Thailand database, combined with our own exhaustive market and property surveys. Bangkok Property Report The Bangkok Property Report, now in its 11 th year, is CB Richard Ellis Thailand s flagship quarterly subscription publication, with data from a tried and tested database reinforcing its reputation as Bangkok s definitive property sector source. The Bangkok Property Report provides in-depth analysis of the Bangkok real estate market, including property supply and demand, occupancy, take-up, prices, rental trends and other indicators. For more information, please kenneth.mcbrearty@cbre.co.th or call ext 62. Copyright 29 CB Richard Ellis (CBRE) Statistics contained herein may represent a different data set than that used to generate National Vacancy and Availability Index statistics published by CB Richard Ellis Corporate Communications Department or CB Richard Ellis research and Econometric Forecasting unit, Torto Wheaton Research. Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission of CB Richard Ellis. For more information regarding other research publications, please contact: Kenneth McBrearty, Senior Researcher, CBRE Research T ext 62 F kenneth.mcbrearty@cbre.co.th CB Richard Ellis (Thailand) Co. Ltd. 46 th Floor, CRC Tower, All Seasons Place, 87/2 Wireless Road, Lumpini, Pathumwan, Bangkok 133