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The Coronavirus Effect – Phuket by numbers

Bill Barnett

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PHOTO: A quiet Phuket International Airport - patstravelreviews.com

by Bill Barnett of c9hotelworks.com

The impact of the current outbreak of the novel coronavirus in China, and a limited spread to 18 other countries, will be felt in the months ahead. Whilst the headlines loom large at the moment with statistics and stories of the spread, the downstream effects on Thai tourism, and particularly the areas favoured by Chinese tourists, are going to hit hard. Bill Barnett from c9hotelworks.com reports…

Taking lead in the news today has the World Health Organisation declaring the coronavirus a global health emergency. For hotels and tourism the best metric to understand the impact of the virus on the island’s tourism market is airport arrivals.

Looking at data from Wednesday, January 29, international passenger arrivals at Phuket airport dropped 32.95% compared to the same date in 2019. For the previous day, Tuesday the 28th, the shortfall was 29.80%.

Viewing the month of January, overseas visitor arrivals on a daily basis were achieving positive growth. This changed on Sunday, January 26 which saw numbers retract. It’s important to note in far as trends go the January month-to-date remains positive with a 7.92% increase, which gives readers an indication that the months had been showing strong arrivals versus last year.

Taking a broader look at Bangkok’s numbers for Suvarnabhumi Airport on January 29, overseas arrivals declined by 14.92%. Don Mueang, which is more regional focused, stepped back a whopping 32.63%.

Statistically, the hardest hit Thai airport is Chiang Mai, which experienced 48.89% loss of international arrivals on Wednesday (year-on-year) and is indicative of the destination’s reliance on inbound Chinese.

Back to Phuket, it’s important to know the year-on-year comparison actually does not tell the full story. In 2019 Chinese New Year was in February so last year’s numbers when compared to 2020 are not apple to apple given the annual holiday turbocharger occurred in January this year. Hence the CNY impact in January in the data above, if we consider the absence of the holiday boost, is even more profound than the percentages shown here.

Currently there are 33 cities in Mainland China that have flights to Phuket.

Where does the hotel industry go from here? Phuket is not alone in its strong dependence on Mainland China, and what is likely is, once this situation turns the corner will be rate focused strategies which means bad news for hotel owners who were looking for higher-yield in 2020.

 

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Bill Barnett has over 30 years of experience in the Asian hospitality and property markets. He is considered to be a leading authority on real estate trends across Asia, and has sat at almost every seat around the hospitality and real estate table. Bill promotes industry insight through regular conference speaking engagements and is continually gathering market intelligence. Over the past few years he has released four books on Asian property topics.

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