Phuket arrivals up as real estate undergoes ‘absolute makeover’

Passenger traffic through Phuket International Airport during the first half of this year surged 28 per cent compared to a year earlier – marking a dramatic recovery for the destination as it leads Thailand’s tourism revival and a return to the boom year of 2007.

According to the mid-year edition of Phuket Market Update, a research publication released today by leading hospitality consulting firm, C9 Hotelworks, the road to recovery has firmly begun with higher hotel occupancies and a “game changing” shift in tourist profile that is driving growth.

C9 Hotelworks Managing Director Bill Barnett said one clear indication of the bounce back is by hotel wide performance statistics, with occupancies rising from 61 per cent in 2009 to 70 per cent in the same period of this year, although this did come at a cost of average room rates – down 9 per cent. But the longer term implications of the shift away from European visitors looks likely to have a more telling impact on the destination as it once again delivers the pre-economic crisis levels of 2007.

“Market dynamics are evolving with a game changing shift in tourist profile from a historical Eurocentric dependence on long haul European visitors to short haul Asian travelers,” Barnett said.  “Driving this trend is the weakening of the euro and pound sterling which have jolted market sentiment and transformed travel patterns to the resort island destination.”

According to figures revealed in the Phuket Market Update report, 2009 registered a jump in arrivals by 1.74 million. However, when comparing year-on-year data for the past five years passenger volumes have now hit levels of those back in 2007 or the pre global and economic crises period.

Barnett noted that the effect of the political crises in Bangkok during the months of April and May caused a 38 per cent drop in the second quarter of 2010 compared to the first quarter – but the impact on hotels was minimal as this came on the heels of the tourist high season coupled with increasing direct international flights that allow door-to-door access to the island.

In an exclusive interview with Property Report South East Asia, Barnett said: “The relationship between tourism and property is symbiotic. Phuket real estate is undergoing an absolute makeover. I think those who haven’t realised things are changing are lagging. Some of the early adopters have changed their business models. Some have shifted to real estate management to get ‘bread and butter’ revenue; some of those guys noted the sinking of the British Pound as the first warning sign and acted. Now we’re seeing more people diving in to villa management.”


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