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Phuket’s tourism high season hopes shattered in policy flip-flop

Bill Barnett



“The time has come that Thailand must gain confidence from international benchmarks.”

Thailand’s leading resort island Phuket has come face-to-face with the reality that it’s tourism high-season will not see a marked reopening to overseas travellers. In the wake of the dismantling of the ‘Phuket Model’ and refocus by the government on using Bangkok as a single international gateway, there is increasing alarm over the lack of a path forward for the island’s rice bowl – tourism.

The key tourism indicator for the island is airlift and Phuket International Airport is the gateway for 70-80% of visitors to the destination. According to Airports of Thailand data, 121,530 passengers arrived in the month of September. This equates to just over 4,000 arrivals a day and most of these include local residents and business people. Comparing year-on-year data, 2019’s daily arrivals, which included international travellers, was five times higher.

Commenting on the toxic situation, hospitality consulting group C9 Hotelworks Managing Director Bill Barnett says “there is a dramatic change in the market mix where the current domestic-led average length of stay for hotels is approximately 1.8 days, while for foreign travellers it’s more than double this amount. What this means for hotels is severely reduced overall demand across the island’s entire accommodation sector.”

Looking forward to the high season when the numbers spike upwards in the four months of December through March, the high season months last year equated to more than one-third of annual demand. Total domestic and international arrivals at the airport totaled just over 9 million in 2019. Adding in high season shoulder months into the equation, the stark economic impact of Phuket’s economic seasonality is reflected in the fact that well over half of the island’s tourism arrivals are packed into a six-month period.

Now, nearly two months into that timeframe, what is apparent is it’s virtually impossible to save the high season, and hotel owners in 2021 will be forced to contend with historically the lowest trading months of the year by May. Given these grim prospects, C9 is predicting more large-scale job losses and business closures given there is no light at the end of the pandemic-induced tunnel.

“Taking a 360-degree view on the restricted domestic-only demand, you have to take into account that Phuket’s current registered accommodation supply has continued to surge to its present size of 90,267 rooms in 1,773 hotels/tourism establishments”.

“Of this supply upper midscale, upscale, and luxury properties of international standards are approximately 25% of the total rooms.”

Phuket’s tourism high season hopes shattered in policy flip-flop | News by Thaiger

Data from leading data intelligence provider STR daily has Phuket occupancy averaging 10% with upward spikes on weekends at international standard hotels. Looking into the number though, the reality is domestic travelers are cashing in on cheap deals at upscale and luxury hotels. Given limited visitor arrivals the far larger mid and economy tiers where most of the hotel inventory sits, are experiencing even lower occupancy. This domino effect is expected to prevail unabated throughout a sustained downturn and effectively crushes the smaller properties and local tourism businesses.

As Thailand’s government policy has maintained Bangkok as the sole entry point for a limited number of travelers from overseas under the Alternative State Quarantine (ASQ) program, a number of hotels in all tiers are operating under the scheme. Hotel performance data for Bangkok from STR is reflecting occupancy just above 25% for international standard hotels, though again in the broader marketplace demand is at considerably lower levels.

In Phuket, many hotels pinned high-season hope on the now-aborted ‘Phuket Model’ to allow Special Tourist Visas (STV’s) aimed at long-staying visitors, which is logical given the island’s legacy winter ‘snowbird’ market from Northern Europe and Russia. Putting the Alternative Local State Quarantine program at the head of the reopening tourism initiative, 17 Phuket hotels have been approved and 21 applications are under process. Properties who have undertaken both the expense and time in qualifying for the status have been shut-out, given the government’s about-face policy of centralising all overseas arrivals into Bangkok.

What is unclear is the logic in policy flip flop on negating the island’s essential tourism lifeline. Using smaller contained resort-focused islands would appear a logical risk mitigation strategy that was echoed in all of the hype over the ‘Phuket Model’ but after the dust has settled, it ultimately failed to launch.

The time has come that Thailand must gain confidence from international benchmarks, such as the tourism dependent Maldives. According to data from the nation’s Ministry of Tourism, in October the destination recorded 21,514 tourist arrivals. This trend is again on the rise in November and looking back the country has safely managed the reopening of its borders since mid-July. Another nearby island, namely Singapore is set to put an overseas travel bubble into place within this month to Hong Kong.

“Losing this high-season will further intensify the catastrophic impact on the island’s business owners and the livelihoods of the vast majority of residents. Given the sheer size of the hotel inventory, it cannot survive only on domestic visitors, cheaper airfares, or by adding more public holidays. For Phuket, this high season, faced with the prevailing arithmetic the island can only wait and wonder what comes next.”


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  1. Avatar


    Tuesday, November 10, 2020 at 8:52 am

    It’s said that money goes where it’s most respected. Probably goes for people as well…

  2. Avatar


    Tuesday, November 10, 2020 at 8:54 am

    The current gov has given tourism. Advisory committee to look at alternative economy signals that ! Dying islands of the south and gulf ! There’s no democractic accountability it doesnt matter

  3. Avatar


    Tuesday, November 10, 2020 at 9:20 am

    Self quaritine at your choice of hotel. Tests 72 hours before flight???

  4. Avatar

    Jack Sombra

    Tuesday, November 10, 2020 at 9:48 am

    Simple reality is Government have no clue how to actually open. They backed themselves into a dead end street without a clue how to get out and then let the village idiot, otherwise known as Auntin, take the lead and he could not organise a piss up in a brewery as would be to busy trying to figure out how he could gain from it, while watching all the beer was going down the drain. High season is lost this year, which basicaly means Phuket will go another 12 months before it will see any real profit again, even if the vaccine comes in next few months and with the vaccine is only way these clowns will ever figure out how to open, and even that they will probably mess up.

  5. Avatar


    Tuesday, November 10, 2020 at 10:27 am

    matter is we as witnesses based in Thailand, all love Zoos and Circus, we have here one of the greatest show in the world with USA and Europe being great artists taking part too !!!

  6. Avatar


    Tuesday, November 10, 2020 at 10:50 am

    The flip flop isn’t what killed high season. There is no way 1,200 tourist a month would have saved it. The STV scheme was destined to fail. The problem is still the same, tourists have no desire to quarantine. Its why the snow birds are headed to Mexico, the Caribbean and Africa. There is a reason the Japanese have started to arrive in Hawaii but not Thailand. The simple truth is nothing will save Phuket outside of reopening to international tourists. When that happens is anyone guess.

    • Avatar

      Issan John

      Tuesday, November 10, 2020 at 1:29 pm

      Exactly. 1,200 a month would make no difference and neither would the 20,000 going to the Maldives.

      It’s a balancing act: Phuket and Pattaya suffer, or the whole country suffers as the West is suffering now.

      It’s a pretty simple choice, and the vast majority of Thais have made their feelings very clear.

  7. Avatar

    Robert K Choate

    Tuesday, November 10, 2020 at 11:11 am

    A sad state of affairs, on one hand is the health of Thai citizens, on the other hand, is over 20 % of the Thai economy is going down the tubes right in front of our eyes. This 20% of the economy is only the tip of the iceberg, Last year companies started to move out because they stated it was not profitable to do business in Thailand and Government always changing policies with taxing rules, ownership rules and shipping was getting too expensive. These were not small companies but worldwide companies, Harley Davison just one to name. So add another 5% to the 20% and that adds up to 1/4 of the entire income for Thailand soon the Thai Baht will start to be devaluated and than maybe someone will realize that they better get their country working again or Cambodia will be the new winner of every thing Thailand losses.

    • Avatar

      Issan John

      Tuesday, November 10, 2020 at 1:57 pm

      “20% of the Thai economy” is NOT dependent on foreign tourism. This is NOT the figure given by any recognised sources, which ALL put it at between 11 and 12%.

      NO “taxing rules, ownership rules” changed. NONE – NAME ANY!!!

      Companies left because it wasn’t profitable due to the increased cost of shipping and labour and a drop in demand worldwide.

      Harley-Davidson has NOT left Thailand, but on the contrary has moved it’s production from China TO Thailand, as well as partly from the US to Thailand (with a 30% plus tariff from the EU for US made Harleys against a 6% tariff for Thai made ones, hardly a surprise). Construction of the factory started in 2018 and it went on line last year. YOPU’RE TALKING NONSENSE!

      “Cambodia will be the new winner …”?


      Only for the long term tourists Thailand doesn’t want, and for the sweatshops and garment factories as wages are half what they are in Thailand.
      Foreign investment from Western companies is minimal, with the biggest foreign investors being Chna (35%), Japan (accounting for (7.8%), Vietnam (2.9%), Singapore (1.8%), the Republic of Korea (1.7%), Malaysia (1.36%) and Thailand (0.9%).

      • Avatar

        Toby Andrews

        Tuesday, November 10, 2020 at 6:24 pm

        Never the less, investment by foreign manufacturing operators continued to drop during 2006 -2010 at an average of US$10.83 billion a year to $7.26 billion a year at present.

        Foreign investors continue their net selling of Thai stocks for more than seven years to a total of 800 billion Baht.

        The reasons:
        State policy does not promote free competition and fairness . . .
        domestic political instability and uncertainty of continued economic policies . . .
        recurring political conflicts . . .
        lack of proper protection of intellectual property . . .
        Thailand mostly trades in Thai Baht, other countries allow trade in several currencies.
        I would add massive corruption by the police and government departments.
        Constant changing rules and regulations for foreigners.
        The Thais as a race refusing to change policies despite the fact they are not working.
        It is their refusal to lose face and admit they were wrong.

        Source Bangkok post 5th of August.
        The report concludes: a warning that Thailand is facing economic turmoil . . .
        And now the Thai fools accelerate their economic decline by affectively banning tourism, thereby reducing their GDP by up to 12.91.

        • Avatar

          Issan John

          Friday, November 13, 2020 at 8:34 pm

          That’s not remotely what the Bangkok Post of 5 August said.

      • Avatar

        Khun plastic

        Thursday, November 12, 2020 at 4:20 pm

        That’s the published figures.
        Do not underestimate the amount of untraceable cash that changes hands in the sector.a quick look at the amount of people queing at currency exchange booth’s in any tourist area should put any doubts about that to bed.
        Also factor in the amount of money transferred by overseas sponsors to there tilacs generally by untraceable western union and the 30 percent figure starts to look pretty reasonable.
        If you reside where you user name suggests you would have to be blind to have not noticed whole villages devoid of females of age group 20 to 40 ish.
        Nobody in the villages appear to work but nobody is starving and most places have a nice car parked out the do you think that works then.
        Daughter working at 7/11 in Pattaya and remitting her extra hard earned baht to mama and papa!yeah right!

        • Avatar

          Issan John

          Friday, November 13, 2020 at 8:31 pm

          Not “devoid” of “20 to 40 ish” females at all!

          While farangs in Pattaya and Phuket have this bizarre idea that the whole of Issan is reliant on bar girls (and boys) sending money home to keep their extended families going, it’s absolute nonsense. It’s a complete myth!

          The reality is that while it happens, for every bar girl / freelancer sending money home (and far from all do), there are a dozen or more working in factories who DO send money home on a regular basis, usually rather more generously.

          That’s what’s had a noticeable effect in the villages as production’s dropped and OT’s been reduced.

          That’s how it “works”, and why outside Pattaya and Phuket Thais don’t care about the sex tourists not coming but they want the factories to keep working as normal. Sorry.

      • Avatar


        Friday, November 13, 2020 at 11:22 am

        Maybe the 11 and 12% is true in the reported economy, however, easily 20%+ if the shadow economy is taken into account. There’s so much money that is unaccounted for, and not taxed moving around Thailand.

  8. Avatar


    Tuesday, November 10, 2020 at 3:46 pm

    Check out the Australian named Jamie McIntyre. Apparently he is now offering $10,000,000 to anyone who can prove convid actually exists!
    Line up! That’s a cool ten million buckaroonies! And the first taker is….?

    • Avatar


      Friday, November 13, 2020 at 11:18 am

      Hmmmm, $10,000,000 AUD, what’s that in real money. Just kidding.

      • Avatar


        Saturday, November 14, 2020 at 7:34 pm

        Not sure RA, but if it’s even half the amount in $US, and if you had proof that all this malarkey is factual, why would anybody not go for it?
        There’s people everywhere here and there everywhere not using critical thinking it seems and going along blindly with what they’ve been told on the media….and actually believing it.
        Sad times are these unless the veil of deceit is lifted (and I am praying for that day!)….
        And even then, many good people will still walk abound like programmed robots with their diapers/nappies on their face.
        This Jamie McIntyre has some big round balls and why you’ll never see his name mentioned on TV. I read yesterday that all mention of his offer was banned on YT. 😉

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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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