Connect with us

Koh Samui

Koh Samui balancing on tourism razor’s edge

Bill Barnett

Published 

 on 

PHOTO: www.thekalasamui.com

“…shrinking Chinese demand due to the economic slowdown and depreciation for the yuan versus the baht”

The time has come to open the discussion about the troubling drop in one of Thailand’s leading resort destinations, Koh Samui.

Looking into the island’s performance numbers, according to data from international hospitality benchmarking group STR, at the end of August room night demand was down year-to-date by 4.4%.

Viewing a broader market metric C9 Hotelworks research has shown through September that hotel occupancy for the first nine months of the year declined by over 7% compared to the same period in 2017.

One cannot simply account for the dismal numbers as an effect of the China ‘boat sinking’ crisis which was triggered in the middle of the year. Airlift is the elephant in the room of island tourism destinations. During the first six months of this year, domestic arrivals at Koh Samui Airport dropped by 19%, with each month reflecting a negative variance compared to the same month in 2017.

Many industry watchers have pointed to the termination of Thai Airways International flights between Bangkok and Koh Samui in September as a trigger. The reality of the airlift in fact is TG retired an aging 737-400 jet that was used to service the route. It lacks an appropriate replacement given the island’s short runway and negotiated a codeshare agreement with Bangkok Airways to ensure travelers transit seamlessly.

One telling indicator of the market malaise is Surat Thani Airport on the mainland. Over the past few years a rising number of Chinese travelers had used the gateway and were ferried on to Koh Samui. Diving into the latest available data, international arrivals at Surat Thani for the period of January through September dropped 36%, while domestic arrivals only slightly moved downward by 1%.

Armed with the numbers I started a dialogue with island hoteliers to better understand the situation. For the most part, there were similar stories about shrinking Chinese demand due to the economic slowdown and depreciation for the yuan versus the baht.

Arguably the legacy European markets were slower based on the impact of a World Cup year. Lastly is the rise of Vietnam’s beach destination’s including Da Nang, Nha Trang and Phu Quoc.

Ultimately there is little doubt though that the sheer cost of airfares to Koh Samui remain a vital barrier to entry. Phuket continues to see more low-cost airline carriers which has contributed to growth in price sensitive markets. Samui’s environmental restrictions on the number of daily flights and lack of airline carrier diversity in the LCC space has created a glass ceiling.

For hotels, frankly there is no easy answer. The island has somewhat avoided the massive development crush of other resort locations in Thailand and Southeast Asia, but the nature of the island’s economic dependence on tourism has caged the golden goose. Damned if they do or damned if they don’t, the path to tourism maturity comes with a price tag with either staying small or going big. The hotel and tourism sector will likely remain stressed going forward, though certain niches such as luxury properties and wellness offerings tend to buck the trend.

To sum up the future, something has to happen with the airport issue to balance mounting infrastructure drains. The continued influx of Full Moon travellers transiting to nearby Koh Phangan and early stage development of Koh Tao are just another part of the equation.

In short, Koh Samui either needs to find a way to grow the existing airport or else find a new location and long-term solution to the airport conundrum.

Koh Samui balancing on tourism razor’s edge | News by Thaiger

 

Want more Thailand news from the Thaiger family?

📱 Download our app on Android or iOS for instant updates on your mobile
📝️ Join the conversation on Thaiger Talk - discuss news & life in our Thailand forums
📧 Subscribe to our daily email newsletter
👍 Like/Follow us on Facebook
🔔 Subscribe to or Join our YouTube channel for daily video updates

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 *

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.

Follow Thaiger by email:

Tourism5 hours ago

TAT announces 1,500 travellers arriving in Phuket July 1

Coronavirus (Covid-19)7 hours ago

5 million Moderna vaccines for Thailand, half of expectation

Coronavirus (Covid-19)10 hours ago

Covid-19 round-up for expats 3: Are countries helping Thailand?

Phuket Sandbox July 1st

days
hours
minutes
seconds

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

image
Join the conversation on the Thaiger Talk forums today!
Coronavirus (Covid-19)10 hours ago

Covid-19 round-up for expats 2: Will your country give a vaccine?

Coronavirus (Covid-19)10 hours ago

Covid-19 round-up for expats 1: Should you travel to Thailand?

Thailand10 hours ago

Thailand News Today | Lockdown for BKK? Demonstrations back on, Pathum Thani shooter arrested

Thailand10 hours ago

Myth busted: Drinking alcohol does not kill Covid-19 – VIDEO

Phuket11 hours ago

Power outages coming to Kathu, again

Tourism12 hours ago

List of countries by Covid-19 risk level, classified by Thailand’s DDC

Thailand12 hours ago

Legalised marijuana up next? Courts get closer to legalising kratom

Phuket13 hours ago

Phuket police raids nab suspects for allegedly having guns, drugs, kratom

World14 hours ago

Antivirus legend John McAfee apparent suicide in Spanish prison

Coronavirus (Covid-19)14 hours ago

Thursday Covid Update: 4,108 new cases; provincial totals

Coronavirus (Covid-19)14 hours ago

Bar girls in Pattaya arrested for allegedly violating Covid restrictions while live streaming

Protests15 hours ago

Gathering for 89th anniversary of constitutional monarchy

Thailand4 months ago

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

Tourism4 months ago

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

Phuket4 months ago

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

Tourism4 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand4 months ago

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

Tourism4 months ago

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

Thailand5 months ago

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

Thailand5 months ago

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

Thailand5 months ago

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

Thailand5 months ago

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

Thailand5 months ago

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

Thailand5 months ago

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

Thailand5 months ago

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

Thailand5 months ago

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

Thailand6 months ago

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

Trending