Connect with us

Business

Phuket RevPAR takes hit with source market transition

Legacy Phuket Gazette

Published

 on 

PHUKET: Differences in source markets and government spending have forced Bali and Phuket to take dramatically different approaches to adjusting to the recent tourism climate with regards to balancing occupancy and rates.

Hotels and resorts in Bali have taken a mostly unified approach by holding rates and allowing occupancy to dip.

In Phuket, however, even within market segments, a number of approaches can be seen, as some hotels and resorts drop prices to increase occupancy and others choose to hold rates relatively steady.

“Source markets for Bali are more widespread and are also different as they have traditionally been skewed to more domestic visitors than Phuket. They also have a lot more Australian visitors,” STR Global’s Area Director for Asia Pacific Jesper Palmqvist explained to the Phuket Gazette last week.

“I can think of two reasons for the rates holding in Bali as compared to Phuket. Firstly, Phuket is different because it has seen a dramatic shift from Russians to Chinese wholesale visitors – with the latter commanding a much lower rate overall. So it’s a simple demand/supply equation, and Bali has not seen the same shift.”

“Secondly, Bali is currently going through different dynamics, with less government spending on hotels in light of austerity measures, along with many new hotels opening. They need to be good at revenue management and should try to uphold rates for [the day] when demand starts to come back.”

After a shocking drop in occupancy in 2014, below 65 per cent, Phuket has quickly recovered in 2015, showing some growth on 2013.

However, despite the 2015 year-to-date data collected by STR Global showing a 7.3 per cent increase in occupancy and 7.4 per cent increase in demand over supply, revenue per available room (RevPAR) dropped by nearly one per cent.

“In terms of RevPAR, it is not always easy to make changes as a single hotel. When the overall tourism profile changes, you either decide to accept the majority of guests or you don’t,” Mr Palmqvist said.

“But we do see, of course, which hotels seem to attract what kinds of guests as well. By being diligent and skilled you can cover your bases better by widening your source markets and guests – more easily done these days using good data intelligence and online tools.”

“The challenge for Phuket could be the fact that it is primarily Chinese and Russians coming in, and then there is a wide gap down to the next source markets; there could be volatility in that.”
The diverse strategies being implemented should help mitigate some of that volatility to make Phuket, as a destination, stronger.

Nonetheless, given the drop in rates and the clear dominance the Chinese market is expected to have over the next several years, it will be very difficult to grow RevPAR in Phuket.

“Customers quickly get used to paying lower rates, which diminishes the value proposition of the property and also hurts the essence of the brand. I would not say this is happening to an extreme in Phuket – it’s larger forces at play here. The majority of hotels seemed to have managed it well so far.”

— Isaac Stone Simonelli

 

Get more from The Thaiger

📱 Download our app on Android or iOS
👋 Have your say on our Thailand forums
🔔 Subscribe to our daily email newsletter
📺 Subscribe / Join YouTube for daily shows
👍 Like/Follow us on Facebook
🐦 FOLLOW us on Twitter
📷 FOLLOW us on Instagram

image

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

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

Follow Thaiger by email:

Drugs5 hours ago

Police nab 600kg heroin drug bust, year’s biggest in Northeast

Koh Samui8 hours ago

Koh Samui unaccustomed to Covid-19, many act in dismay

Thailand10 hours ago

Bangkok Airways extends flight suspension to August 11

Sponsored2 days ago

Experience Phuket’s Islands with 5 Star Marine

Welcome back to Thailand!

Thaiger is getting behind local businesses for the restart of tourism in Thailand - up to 50% discounts across all advertising packages!

Thailand11 hours ago

7 Jomtien Beach curfew breakers arrested

Thailand12 hours ago

Buri Ram pig stable converted into gambling den: 22 arrests follow

Thailand13 hours ago

“Fake news” banned, Thai media say order infringes on freedoms

image
Join the conversation on the Thaiger Talk forums today!
Phuket13 hours ago

Precarious Phuket: open internationally, closed domestically

Best of13 hours ago

Top 5 tattoo parlours Bangkok

World13 hours ago

Duterte approves lockdown measures for Manila

Best of13 hours ago

The Best Pizza in Bangkok with Delivery

Thailand13 hours ago

Thailand News Today | worker camp woes, ‘fake news’ crackdown | July 30

Best of14 hours ago

Best Premium Hotel Buffets in Bangkok

Coronavirus (Covid-19)14 hours ago

CCSA considers extending restrictions in “dark red” zones for another 14 days

Thailand14 hours ago

Fake dead bodies used in Phuket protest, police plan real investigation

Best of15 hours ago

Top 5 adventure tours in Chiang Mai

Thailand5 months ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism5 months ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket5 months ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism5 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand5 months ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism5 months ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand6 months ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand6 months ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand6 months ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand7 months ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand7 months ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand7 months ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand7 months ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand7 months ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Thailand7 months ago

Thailand News Today | Southern floods, Face mask fines, Thai Air Asia woes | January 8

Trending