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Koh Samui’s tourism hopes pinned on international travellers

Bill Barnett

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by Bill Barnett, c9hotelworks.com

It’s baby steps at the moment as Thailand’s Robinson Crusoe-inspired, island-focused, international travel reopening plan rolls out in Koh Samui from July 15. Unlike the Phuket Sandbox program for vaccinated travellers, the Samui Plus sealed-route will test the water with a hybrid approach of 3 days in a hotel quarantine scenario and then allows visitor’s island-wide free access from the 4th day onwards.

In anticipation of overseas travelers flying to the idyllic holiday island in the Gulf of Thailand over 60 hotels have been certified in the SHA Plus safety and health program according to C9 Hotelworks research. Gateway carrier Bangkok Airways has confirmed 3 domestic daily = ‘sealed route’ flights from Bangkok’s Suvarnabhumi Airport. International Samui Plus visitors will be required to fly via Bangkok and transit on these designated flights.

Koh Samui’s island economy is heavily dependent on tourism with over 600 registered tourism establishments and nearly 24,000 rooms. The impact of the pandemic can best be highlighted when looking at the airlift, comparing pre-pandemic 2019 and the onset and ongoing impact of Covid-19 saw airline passenger traffic drop 64% year-on-year.

Speaking about the process of a gradual stepped process for accepting overseas arrivals,the learnings from the first week of the Phuket Sandbox will likely follow a similar pattern. Over 2,300 international arrivals have come to the island with more than 100,000 confirmed hotel nights booked in SHA Plus hotels through September.

Demand has remained strong and is now demonstrated, which bodes well for Koh Samui’s chances. An ancillary impact of the Sandbox is the restoration of regularly scheduled direct flights between the two islands from July 16 starting with 4 flights a week this month and becoming daily in August. In analyzing tourism, we look to the sky for answers is the logical starting point, and this increased airlift is a key driver for the tourism economy.

Moving to the outlook for the island’s lodging industry, C9 Hotelworks’ new Koh Samui Hotel Market Update points out that the likely recovery journey will be top-down, with many travellers taking advantage of competitive rates in luxury and upscale tier hotels. C9 is forecasting the short to medium-term impact to be in rising demand at the expense of room rates as travelers tend to trade up in post-crisis travel historically.

As Covid-19 has landed the tourism industry in unknown territory, leading global data group STR’s Area Director for Asia Pacific Jesper Palmqvist weighed in with “one of the many things we have learned about hotel recovery waves and business opportunities through the pandemic, and in many places around the world, is that before vaccination rates are satisfactory and broad travel enabling solutions are in place, we can see early progress in markets that inherently provide social distancing and easier containment of risk and people.

The most known example being The Maldives, where luxury resorts have been able to tap into a multitude of source markets for the past 9 months, by providing easy access to distanced islands of good size and of course great experiences.

While the first week of the Phuket Sandbox is already showing progress, with the very low daily occupancy numbers of around 4-5% has already grown up to 10% – there is also a strong case for Koh Samui to fit the profile and find demand.

Since Q2 in 2020 when the crisis started, we have seen three peaks in Koh Samui, where levels reach beyond the bare minimum – Mid-October 2020 for the long weekend, New Year’s Eve, and most recently the Songkran holiday where occupancies reached close to 50%. These spikes in demand came from the domestic market and once the international factor comes into play, more stability will evolve.”

While Thailand’s tourism fortunes remain highly focused on islands, it’s important to remember that Koh Samui and Phuket remain only small pieces of the broader puzzle and that even Robinson Crusoe had to eventually get onto a raft and return to the larger world at hand. These baby steps remain only that until our world has learned to live and function with Covid-19 and find equilibrium.

Koh Samui’s tourism hopes pinned on international travellers | News by ThaigerKoh Samui’s tourism hopes pinned on international travellers | News by ThaigerDownload C9 Hotelworks Samui Hotel Market Update.

 

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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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