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Phuket report shows arrivals up 19% in Q1

Bill Barnett

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By Bill Barnett from c9hotelworks.com

Thailand’s great push forward on mega-transportation projects is seeing strong dividends in the local tourism industry.

One key example is Phuket, where passenger arrivals grew by nearly 19% in the first four month of the year at the newly upgraded and expanded international airport.

Why Phuket? One only has to look at the upward trajectory of low-cost carriers (LCC’s) and supercharged airlift to the island. Underpinning the remarkable growth story is the exponential rise of Mainland China tourism, which registered a 50% year-on-year increase, followed closely by Russia at 47%. By year-end, a record high 9.7 million passenger arrivals is expected to pass through the airport.

Direct flights to Phuket this year, as of May, has witnessed 23 new routes introduced to the destination with 19 being from Mainland China, according to Thailand-based consulting group C9 Hotelworks latest market research.

Currently there are 33 cities in China that link to Phuket, door to door.

Phuket report shows arrivals up 19% in Q1 | News by Thaiger

A defined shift in geographic source markets over the past ten years has experienced rising demand for non-beach activities. With the strong purchasing power of tourists, especially Chinese, Russians and Australians, more retail and tourism attractions are developing on the island, off the beaches. The changing mix of visitors is reflected in the island’s hotel performance with leading hotel data benchmarking group STR reporting that in 2018 upper/midscale hotels have shown the highest demand growth of 10% compared to the same period last year.

Speaking of the changing landscape C9 Hotelworks Phuket is gradually transforming to a more urbanised holiday destination rather than a pure beach getaway. Resort-oriented retail is a rising force, with our data showing nearly 200,000 square metres of Grade A net lettable area in the pipeline.

Another spin-off of the tourism numbers is a series of impressive upcoming themed tourism attractions including Vana Nava Water Park, Blue Tree Water and Entertainment Park and Aquaria at the new Central Festival mall extension. The powerful mix of retail and tourism is most evident in the island growth belt from Kathu to the ever-expanding Patong.

Looking at the hotel sector, Phuket has a total of 1,744 tourist accommodation establishments with 84,427 keys as of Q1 2018, which includes both registered and unregistered properties.

There are 36 new hotels in the pipeline with 27 of those properties affiliated with international hotel brands. In addition, with the intention to attract real estate buyers, 10 upcoming mixed-use properties will a have hotel resident components, which will account for 28% of total incoming supply.

Summing up Phuket’s pathway to sustainable growth, the announcement that the AoT (Airports of Thailand) is set to invest an estimated USD1.8 billion in a second airport just over the Sarasin Bridge in Phang Nga bodes well for fundamentals.

Creating a broader ‘Greater Phuket Tourism Triangle’ that includes Phang Nga Bay and the prime West Coast beach strip from Natai to Thai Muang on the mainland, will bring more diversity and refresh the island’s maturing global appeal.

To download the full report click HERE.

 

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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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