PHUKET: Migratory birds aren’t the only ones moving south to escape plummeting temperatures in the northern hemisphere. South Asia is rapidly becoming the preferred winter destination for owners of superyachts – motor yachts in excess of 30 meters or 100 feet.
Indeed, an increasing number of these luxurious leisure ships can be sighted off the shores and islands across the South Pacific and Andaman Seas, with Phuket as a focal point.
“The number of superyachts being transported to Phuket for the winter season is up 25 per cent from last year,” said Bas Nederpelt, Director of Sales for De Vries, one of two ship yards in Holland where world-renowned Feadship yachts are constructed.
“Due to increased fuel costs and the perceived threat of piracy, among other factors, it’s becoming more common for owners to ship their vessel for long distances via dock transport, and then fly to their destination,” he added.
Bas himself flew to Phuket to attend the annual Asia Superyacht Rendezvous, the longest running superyacht event, and largest gathering of superyachts in Asia.
Speaking exclusively with the Phuket Gazette, Bas explained that the primary reason Feadship has continued to be a principle sponsor of the event for all 11 years is for brand building.
“Feadship yachts are made almost entirely for export – we rarely design a yacht for a Dutchman. So, overseas markets are important to us. For more than 10 years we have recognized that Asia is an important and growing market In the 1990s we established sales offices in Singapore and Tokyo which didn’t work out too well.
“However, we want to continue to increase awareness [about Feadship brand] in Asia and believe that sponsoring a fun event that is more social and less business oriented is more cost effective than advertising in magazines,” he explained.
“Phuket is one of the nicest places for cruise yachting and there are little to no restrictions when compared with other destinations in the region. The high end market want only the best and wealthy people go to the nicest places in the world.
“So in the summer, they cruise around the south of France and in the Caribbean for winter. However, as awareness [about Phuket] increases, more are choosing to come here instead. Phuket is an ideal regional hub with companies that can offer all the services and technical support to yacht owners,” he continues.
“The establishment of various new marinas is another positive indicator. Indeed there is potential and opportunity for Phuket to become a world hub, year round – not just seasonal,” he said.
As for Feadship’s key market groups, Bas said, “We’ve noticed more Russians coming to Phuket, and we have a strong presence in Russia.” He noted that other key markets also include the Middle East and the United States, where Feadship generates a large volume of sales from its Florida office.
Charles Dwyer, Director of Asia Pacific Superyachts, a co-sponsor of the Asia Superyacht Rendezvous, concurred with Bas that increased awareness and infrastructure, the wide availability of resources and services, and the general sense of security are the main factors influencing the continued growth and prosperity of the local yachting industry.
He added, “Superyacht owners are starting to get bored with the same old waters. In the summer, they’re in the Mediterranean and then go to the Caribbean for the winter, then back to the Mediterranean and so forth, for years on end. At the same time, people are realizing that Asia provides many new cruising grounds. Phuket, Koh Samui, Bali, Sri Lanka, Langkawi, the Maldives and Bali are all part of, and due to benefit from, this shift,” he said.
Asked whether any competition destinations in the region are a threat to Phuket, Mr Dwyer pointed out that unlike other industries, destinations feed one another in the yachting industry. “Sailors starting in Bali will ultimately continue to Singapore and then up to Langkawi and Phuket, and it works both ways. They always end up coming to Phuket, but the region as a whole benefits,” he explained.
Both Charles and Bas agreed that “red tape” is the biggest hurdle for future growth. Charles elaborated. “When compared with places like China, Phuket and Thailand are a lot more lax with regulations. And it is for this reason that Phuket stands to benefit tremendously from the expanding Chinese high end market, who are buying yachts and bringing them to Phuket to cruise.
“However, Thailand marine officials should reconsider its regulations.”
He continued, “For example, a boat owner needs a special generator or pump that is only made in Europe. Instead of having it shipped to Thailand where it would be subject to a heavy import duty, what many will do is have it shipped to Langkawi, duty free and have it installed there.
“And while they’re there they will of course get duty free fuel and other things before coming to Phuket.
” While Thailand was looking to get the import duty, not only did they not get it, but they lost out on the jobs for the 10 people it would have took to install the equipment. Penny wise, pound foolish. Some officials have overlooked what this industry can contribute to the local economy.”
— Steven Layne
Phuket hotel watch – 3 months down, 9 to go in 2019
by Bill Barnett of C9Hotelworks.com
At the beginning of the year Phuket’s tourism and hotel sector was cautiously optimistic after a strong first half of 2018 and humbling second half. Key terms that kept popping up were Mainland Chinese, Thai Baht Appreciation, Elections and Supply Concerns.
So today, with three months of performance under the belt in 2019 what are the key trends in hotel trading? These can best be compressed in the following points –
According to data from hotel benchmarking group STR, Thailand remains Southeast Asia’s leading destination for Mainland Chinese, but the gloss is being diminished by Vietnam’s meteoric rise, and strong numbers by the Philippines and Cambodia.
Market-wide RevPar shunk by 0.04% in 2018 and flat demand at the onset of the year is now shifting into negative territory moving into February and beyond. Turning back to last year, group demand is falling which is as key concern in a wholesale driven marketplace.
One stark positive is that RevPar is being propped up by rates and not occupancy. A key takeaway is that in peak and high season, Phuket hotels are able to drive rates up in key periods and continue to do so. This of course is a broad trend. Good hotels tend to perform at higher levels, while poorly managed ones remain subpar.
Getting beyond the numbers, as I speak to hoteliers the expectation is that wholesalers remain a critical component of the island’s hotel industry and despite the expected shift with technology to more direct bookings, the reality is that wholesale models are sensitive to demand volatility and the result of this feeding frenzy most often will be either flat rates for the year or in some cases a retraction.
We expect the remainder of 2019 to be challenging. Some hotels will look at this as an opportunity to reposition, renovate or cut costs. While others will look at new segments, niche offerings or emerging markets like India to regain momentum.
As for the top critical issues facing Phuket hotels, in my opinion these can be distilled in the following Top 3 Things Keep Me Awake at Night…
• Mainland Chinese – If tourism players or hotels believe the damage to Brand Phuket is over, think again. Talking to key tour operators there remains a hangover from last year’s boat sinking incident and travellers remain keenly concerned over safety. Only time and more concentrated promotion will see a return of the numbers.
• Growing Supply and Demand Imbalance – The current pipeline is just over 8,000 keys in development on the island. What’s more concerning is that projects in planning are not represented in this metric, and by our estimate there are approximately 5,000 more keys in planning. While both the pipeline and planning numbers will see some wash, the sum total exceeds current and forecasted demand.
Moreso, the rise of unlicensed condominiums, apartments, houses and villas is continuing unabated and is further exacerbating supply issues. Every time you see a group of tourists renting a 3 or 4 bedroom villa, that’s three or four hotel rooms that lay empty. Government control of unlicensed properties is a key issue facing Phuket’s tourism industry.
• Diminished Natural Resources and Strained Infrastructure – Water tops the list and there is little doubt we are reaching the tipping point with mounting shortages and soaring demand. Electricity is another concern. Lastly is a rising number of vehicles on the road, a urbanising trajectory and slow development of roads and public transport.
To these point’s lets revisit the hotel development pipeline and reflect that a island long term master plan, zoning for new tourism expansion and requirements for developers to invest in public infrastructure to obtain operating licenses is sorely lacking. Something has to give on this front.
In conclusion am I pessimistic about Phuket’s tourism and hotel future in 2019 and beyond? Absolutely not, direct airlinks are growing and the island has a well-structured capacity for handling tourism, but I firmly believe looking into our problems, discussing and finding ways to resolve these are critical to a sustainable growth pattern.
‘Seastead’ set up off coast of Phuket
PHOTOS: Nation TV
A Thai couple has successfully set up a ‘Seastead’ near Phuket.
Seasteading is aiming to build floating societies with “significant political autonomy”. Nearly half the world’s surface is unclaimed by any nation-state, and many coastal nations can legislate “seasteads” in their territorial waters (like a “homestead” but wetter).
The nation TV reports that website ‘Bitcoin.com’ and ‘Ocean.builders’ report that the Thai couple Chad Elwartowski and Nadia Summergirl are are the first seasteaders who established a small seastead 12 nautical miles off Phuket.
Most of the construction of the Seasteading was built on the island of Phuket. The installation in the sea started on January 9.
Mr Elwartowski reveals that the reason that they have chosen to settle near Phuket as the construction price is cheap. The sea is suitable for the establishment as waves are not too high and can attract many tourists.
SOURCE: Nation TV
Massive 11 hotel project, surf club and waterpark for Kata, Phuket
by Bill Barnett, C9Hotelworks.com
Thai developer K.W. Plaza group has unveiled plans for a large-scale mixed-use project called The Beach Plaza on 15 rai, that will have 11 three and four star hotels with a total of 1.490 rooms. The developer is already pitching the unconstructed project to global hotel interests for an imminent sale.
The properties will have varying room sizes from 25 to 35 square metres and range in size from 78 to 204 rooms. Part of the development scheme will see the hotels individually sold off to hotel investors and/or operators.
Late last year the group built and sold the Surf Resort in Patong which was brokered by JLL to a Singapore-based owner/operator.
Other components of the project include a surf club, waterpark, and freestanding restaurants and retail.
An initial hotel has already obtained EIA approval and is currently for sale, with construction of other properties to be phased. The Beach Plaza is off-beach, behind the Kata Night Market and close to Club Med, Ozo and the Ibis.
For more details on the project click HERE.
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