Surging tourist arrivals boost Phuket hospitality sector

PHUKET: Rising tourism arrivals in Phuket, Thailand is auguring well for its hospitality sector as the first half (1H) of 2011 saw a surge in Phuket’s average occupancy across all hotel tiers to 73%, according to C9 Hotelworks’ Phuket Hotel Market Update.

“Key market metric revpar (revenue per available room) moved up to its highest level since the global financial crisis in 2008,” said C9 Hotelworks managing director Bill Barnett. C9 Hotelworks is a hospitality consulting firm based in Phuket.

The report showed the Patong area, which accounts for 35% of the 43,571 accommodation rooms on the island, produced an occupancy rate of 82% in 1H11, with China and Russia now occupying a quarter share of the market.

“As long as the infrastructure keeps pace with the increased numbers of tourists and expansion of hotels and faculties are well planned and implemented, hotels will be able to properly manage their room rates in line with the supply and demand dynamics,” said Barnett.

The report shows investments in Phuket’s hospitality sector have strong positive business sentiment with a supply pipeline for the island of 6,968 rooms. This will see an increase of 16% by the end of 2014.

“Increasingly, the number of existing hotels will face the need to upgrade, re-brand or downgrade market position. Transaction activity is expected to remain active. In this business, either you move forward or go backward, there is no standing still,” Barnett added.

With tourism numbers surging, Phuket Airport is expecting a record four million passenger arrivals this year. Arrivals to Asia’s leading resort destination in 1H increased 20% compared with the same period in 2010.

Phuket’s top five tourism source markets to date for 2011 are China, Russia, Australia, South Korea and Sweden.

This article appeared on the Property page, The Edge Financial Daily, August 12, 2011.