Southeast Asian hotels are losing money on the bottom line even as guests return in record numbers. Minor International and Accor both report Asia-Pacific revenue per room back above 2019 levels, yet rising power and wage bills are eating the gains. The squeeze is sharpest in Thailand, where Bangkok and Phuket added rooms faster than demand could fill them, and energy costs for tropical resorts keep climbing.
The pressure traces partly to fuel prices driven by tension in the Strait of Hormuz, thousands of miles away. Investors are noticing, and money is shifting toward Vietnam, Japan, and South Korea.
Here is the part the booking glossily skips. The air conditioning in your Phuket resort room is now one of the biggest costs the hotel cannot control.
Crude prices have climbed on tension around the Strait of Hormuz, the narrow shipping lane that handles a fifth of the world’s oil. That spike lands as a power bill in tropical Southeast Asia, where cooling guest rooms, pools, and lobbies runs around the clock. A resort in Koh Samui pays for that conflict every month, even though it sits thousands of miles from it.
The result is a strange split. Travel demand across Thailand, Vietnam, and Singapore is strong. Hotels are full. But the owners are not making the money the crowds suggest. Revenue is up and profit is not, and the gap is widening fast enough that investors are quietly changing where they put their cash.
The question for anyone with a stake here is simple. If full hotels are not profitable hotels, what breaks first?
Full rooms, thin profits
The clearest proof comes from the operators themselves. Minor International, which runs hotels across Thailand, Vietnam, and Singapore through its Minor Hotels arm, reported higher utility and payroll costs in its most recent disclosures. Revenue has recovered past 2019 levels. Margins have not followed.
Dillip Rajakarier, Group CEO of Minor International, has told investors the problem plainly: Asian leisure demand is strong, but wage inflation and higher power tariffs in Thailand and nearby markets are compressing profit. Minor’s own financial statements show the squeeze in black and white.
Accor sees the same thing. The group reported that Asia-Pacific revenue per available room passed 2019 levels in its 2025 results, while energy and staffing costs ate into the gains, hardest in resort destinations. Chairman and CEO Sébastien Bazin has said the group is now focused on running properties more efficiently rather than building new ones.
Supply is the other half of the story. According to STR, Bangkok’s hotel supply grew about 3 per cent in 2019, and a similar surge returned after the pandemic. More rooms chasing the same guests drags down rates. Marielle Malabanan, Senior Manager at STR, links Bangkok’s weak run partly to a wave of new openings across every price tier. Reports suggest Phuket added rooms even faster, which would explain its slower occupancy growth, though that figure is harder to pin down.
The cost pressure is documented and broad. What is less clear is why the money keeps flowing in anyway.
The money is moving, just not to Thailand
Investor interest in the region has not faded. It has relocated. Simon Allison, Co-founder and Chair of HOFTEL, the hotel owners’ group, says big institutional buyers favour Japan, Australia, and South Korea for their liquidity and clear rules.
Vietnam is the new draw. “Vietnam is very much in vogue with a massive rebound from the property crisis a few years ago and Thailand is probably suffering from that along with its overall economic stagnation,” Allison said. His read, set out in HOFTEL’s commentary, captures the shift in one line.
That is the real signal here. Record arrivals no longer guarantee a profitable hotel, and capital has worked that out before the headlines have.
The expat squeeze runs alongside it. Higher hotel running costs flow into serviced-apartment and long-stay rates in central Bangkok and Singapore, while rising power tariffs push up utility charges and ride fares. In Vietnam, fast tourism growth around Da Nang and Nha Trang is lifting rents in the neighbourhoods digital nomads favour.
So the answer to what breaks first looks clear. Not the crowds, and not the demand. The owners who priced their business on cheap energy and cheap labour, and now have neither.
Beyond the headline
The bigger picture
This squeeze is part of a wider shift, where cheap-energy, low-wage tourism collides with higher global fuel prices and tighter labour markets. It is not a short post-pandemic wobble but a structural reset. Properties built on volume and low costs must either rebuild around higher-value guests and leaner operations, or slide into permanent underperformance despite record arrivals.
The money trail
Behind the full beaches and packed flights, the real winners may be power suppliers and landlords, not hotel operators. As utilities and rent claim a bigger share of each booking, cash shifts away from on-site service and staff toward fixed bills. That explains why investors increasingly prefer asset-light management deals and REITs that can reprice leases, rather than owning the buildings.
The reach
A less obvious ripple sits with airlines and tour operators that package Southeast Asian stays. If owners cannot fully pass higher wage and power costs into room rates without scaring off guests, the pressure moves upstream. Carriers and agents may lift airfares and package prices to protect their own margins, eroding the cheap multi-stop deals through Bangkok, Phuket, or Singapore.
What to watch if you have money or a booking here
With half-year 2026 earnings due in the next season, both investors and travellers face decisions that depend on whether margins stabilise or keep slipping.
- Investors with regional hotel exposure
Read the next investor presentations and management commentary from Minor International at minor.com to see how a major Thai-listed owner is quantifying power and wage pressure across Thailand, Vietnam, and Singapore. Watch the next two to three quarters for flat or falling margins despite higher room revenue. That is your signal on equity or REIT exposure.
- Western expats and long-stay workers
If you are moving to or managing staff in Singapore, check the Ministry of Manpower guidance at mom.gov.sg on the COMPASS framework and hospitality work-permit schemes. Tighter foreign-labour rules feed straight into hotel staffing, service standards, and long-stay accommodation costs in the city-state.
- Travellers booking Thai and Vietnamese resorts
Understaffed hotels mean slower service, not lower prices. Book premium, well-located properties that can absorb costs, and expect secondary resorts to cut corners before they cut rates. In Vietnam, lock in beachfront stays early as development pushes prices up around Da Nang and Nha Trang.
Explainer
- Strait of Hormuz
- A narrow sea passage between Iran and Oman that links the Gulf to the open ocean. Around a fifth of the world’s oil supply ships through it, which is why any tension there moves global crude prices fast. For Southeast Asian hotels, a disruption far from their shores arrives as a higher monthly electricity bill within weeks.
- RevPAR
- Revenue per available room, the hospitality industry’s core performance figure. It multiplies the average room rate by how full the hotel is, giving a single number for top-line health. The current problem is that RevPAR can rise past 2019 levels while profit shrinks, because energy and wage costs are climbing even faster.
- COMPASS
- The Complementarity Assessment Framework run by Singapore’s Ministry of Manpower for Employment Pass applications. It scores foreign hires on factors such as salary, qualifications, and how diverse the employer’s workforce is. Hospitality firms also use the linked M-SEP scheme to bring in foreign workers during acute shortages, which directly shapes hotel staffing in the city-state.
- HOFTEL
- An industry association representing hotel owners and investors rather than the brands that manage properties. It tracks where institutional capital is flowing across global hospitality markets. Its current reading places Japan, Australia, and South Korea ahead of Thailand on investor appeal, with Vietnam emerging as the region’s rising bet.
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