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Phuket Business: A land of opportunity

Legacy Phuket Gazette

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Phuket Business: A land of opportunity | The Thaiger

PHUKET: The island emerged last year as Thailand’s strongest hotel market, according to a recent report by Jones Lang LaSalle.

The report, entitled Spotlight on Thailand – Hotel Investment Market said that as of December 2012, year-to-date (YTD), Phuket had an occupancy rate of 72.4%.

Meanwhile, it said that the Average Daily Rate (ADR) was 3,902 baht, which resulted in Revenue per Available Room (RevPAR) 2,824 baht.

This was higher than other markets in Thailand, with the exception of Bangkok’s five-star hotel market.

As of December 2012, YTD, Phuket’s RevPAR was 10.1% above the same period last year.

The strong hotel performance was credited primarily to the continual growth of international visitors, which have increased steadily from 2.3 million in 2009 to 4.3mn in 2011.

As of June 2012, YTD, visitor arrivals recorded a year-on-year increase of 9.7% to 2.7mn. During the same period, domestic visitors registered a 6.6% year-on-year growth to 1.2 million.

China, Russia, Korea and Australia were the fastest growing source markets for Phuket.

Between 2009 and 2011, arrivals from China and Russia have showed an impressive CAGR (compound annual growth rate) of 119% and 109% respectively, while those from South Korea and Australia grew by 38% and 37%, respectively.

Sweden has remained as the only (Western) European country in the top five source markets following the global economic crisis.

The total number of domestic and international tourists accounted for approximately 6mn arrivals between 2007 and 2009, followed by a significant jump to 7mn in 2010 and almost 8.5mn in 2011.

The fast pace of growth has put the island’s infrastructure under pressure, especially the Phuket International Airport (HKT). Having exceeded its original handling capacity of 6.5 million passengers per year, HKT received an estimated 9.4mn travelers in 2012.

In early September 2012, the Airports Authority of Thailand announced the appointment of a main contractor to lead the 5.7 billion baht expansion of HKT.

The expanded airport will see the addition of an international passenger terminal, boosting its capacity to 12.5mn travelers a year.

An expanded airport is expected to attract major international carriers to fly direct to Phuket, including Emirates’ Dubai – Phuket route which commenced flights in December 2012, as well as direct flights from London scheduled to commence in late 2013.

Construction of the new terminal is estimated to be completed by 2015.

Despite the significant growth in hotel supply, with 2,756 additional rooms anticipated by 2015, the increase in visitor arrivals has provided demand and the outlook remains positive.

Given the current rate of growth, airport expansion plans and an increase in affluent Asian travelers with greater spending power, Phuket is poised to retain its position as one of Asia’s most popular tourist and investment destinations.

An Active Year
Overall, 2012 was an exceedingly strong year for hotel investments in Thailand.

Phuket remains the hotspot with four major transactions of over 1bn baht each, three of these being undertaken by Jones Lang LaSalle’s Hotel & Hospitality Group.

The Moevenpick Resort & Spa Karon Beach was sold early in the year on behalf of Kingdom Hotel Investments to Malaysia’s TA Global, for approximately 2.8bn baht or 8mn baht per key, yielding an initial yield of approximately 9%.

The 338-key property (excluding residences) is situated on an expansive 52 rai plot of land in front of Karon Beach and offered numerous expansion and redevelopment opportunities to the incoming investor.

The Evason Phuket Resort & Bon Island, situated on over 110 rai of freehold land in the south of the island, and featuring a private beach [front property] on Bon Island, traded in an approximately 1.4bn baht deal to an interest associated with LC Development out of Singapore.

The property was subsequently closed with the purchasers believed to be considering a major redevelopment of the resort and extensive land holdings.

Unlike the two deals described above, the sale of Laguna Beach Resort to Outrigger Hotels & Resorts did not involve a public company investor and, as such, much of the transaction information remains confidential.

The transaction involved the Laguna Beach Resort (acquired last year by RECAP) which was subsequently closed for a major renovation.

The resort is expected to be completed in the first quarter of 2013, and will open as the Outrigger Resort & Spa.

The final transaction recorded in Phuket involved the sale of the Bundarika Villas & Suites on Layan Beach to Minor Hotel Group.

The deal, which was worth US$95 million or close to 3bn baht, comprised of the existing 77 villas and suites on 23 rai of beach-front land, funds to refurbish the existing property and further expansion on a 32 rai plot of land also acquired as part of the transaction.

— Phuket Gazette / JLL

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Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

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Governments & old media versus social media – who will win? | VIDEO

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Governments & old media versus social media – who will win? | VIDEO | The Thaiger

We look at the recent changes made by the Australian and Indian governments to except control over the world’s biggest social media platforms. India has issued strict new rules for Facebook, Twitter and other social media platforms just weeks after the Indian government attempted to pressure Twitter to take down social media accounts it deemed, well, anti social. There is now an open battle between the rise of social media platforms and the governments and ‘old’ media that have been able to maintain a certain level of control over the ‘message’ for the last century. Who will win?

The rules require any social media company to create three roles within India… a “compliance officer” who ensures they follow local laws; a “grievance officer” who addresses complaints from Indian social media users; and a “contact person” who can actually be contacted by lawyers and other aggrieved Indian parties… 24/7.

The democratisation of the news model, with social media as its catalyst, will continue to baffle traditional media and governments who used to enjoy a level of control over what stories get told. The battles of Google and Facebook, with the governments of India and Australia will be followed in plenty of other countries as well.

At the root of all discussions will be the difference between what governments THINK social media is all about and the reality about how quickly the media landscape has changed. You’ll get to read about it first, on a social media platform… probably on the screen you’re watching this news story right now.

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The social media giants in battle with ‘old’ media and world governments | VIDEO

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The social media giants in battle with ‘old’ media and world governments | VIDEO | The Thaiger

“The rules signal greater willingness by countries around the world to rein in big tech firms such as Google, Facebook and Twitter that the governments fear have become too powerful with little accountability.”

India has issued strict new rules for Facebook, Twitter and other social media platforms just weeks after the Indian government attempted to pressure Twitter to take down social media accounts it deemed, well, anti social.

The rules require any social media company to create three roles within India… a “compliance officer” who ensures they follow local laws; a “grievance officer” who addresses complaints from Indian social media users; and a “contact person” who can actually be contacted by lawyers and other aggrieved Indian parties… 24/7.

The companies are also being made to publish a compliance report each month with details about how many complaints they’ve received and the action they took.

They’ll also be required to remove ‘some’ types of content including “full or partial nudity,” any “sexual act” or “impersonations including morphed images”

The democratisation of the news model, with social media as its catalyst, will continue to baffle traditional media and governments who used to enjoy a level of control over what stories get told.

The battles of Google and Facebook, with the governments of India and Australia will be followed in plenty of other countries as well.

At the root of all discussions will be the difference between what governments THINK social media is all about and the reality about how quickly the media landscape has changed. You’ll get to read about it first, on a social media platform… probably on the screen you’re watching this news story right now.

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Turbulence ahead for Thailand’s aviation industry | VIDEO

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Turbulence ahead for Thailand’s aviation industry | VIDEO | The Thaiger

When the airlines, in particular, were asking the government to put their hands in their pockets for some relief funding in August last year, it was genuinely thought that international tourists would be coming back for the high season in December and January. At the very least local tourists and expats would head back to the skies over the traditional holiday break. And surely the Chinese would be back for Chinese New Year?

As we know now, none of that happened. A resurge in cases started just south of Bangkok on December 20 last year, just before Christmas, kicking off another round of restrictions, pretty much killing off any possibility of a high season ‘bump’ for the tourist industry. Airlines slashed flights from their schedule, and hotels, which had dusted off their reception desks for the surge of tourists, shut their doors again.

Domestically, the hotel business saw 6 million room nights in the government’s latest stimulus campaign fully redeemed. But the air ticket quota of 2 million seats still has over 1.3 million seats unused. Local tourists mostly skipped flights and opted for destinations within driving distance of their homes.

As for international tourism… well that still seems months or years away, even now.

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