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Koh Samui

Koh Phangan and Koh Tao try to shake off monthly boom and bust

Bill Barnett

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by Bill Barnett

Thailand’s idyllic Koh Phangan island is renowned globally for its marque Full Moon parties. On the heels of soaring demand for the big event, visitor numbers surpassed the one million ceiling two years ago and over a five-year period registered compound annual growth rate of 17%.

While the numbers are impressive, the reality for resorts on the ground is one of disruptive trading. Accommodation establishments are continually being forced to deal with high occupancy that often surpasses 80% in peak periods but rapidly falls off as soon as the Full Moon event tapers off each month.

According to C9 Hotelworks newly released Koh Pha-Ngan and Koh Tao Hotel Market Update, the two islands have over 13,000 rooms and supply growth is rising at 10%. As the destination matures, the key challenge is how to diversify its market segments in order to avoid being a one-trick pony.

On tourism trends to the islands, most other Thai resort areas that are being immersed in Asia-centric mass numbers, but demand to the two islands in the Gulf of Thailand is focused on long-haul visitors from Europe, Australia and North America.

The main challenge to avoid big event syndrome and a mono market, is the dependence on nearby Koh Samui’s private gateway airport which has is experiencing challenging conditions due to high airfares and a broader lack of airline diversity servicing the sector. At the end of the day, you can’t stay there, if you can’t get there.

Aside from the numbers, C9’s research indicated that a growing number of resort owners and developers were looking at moving past the legacy segments of Full Moon Parties and diving, and tapping into wellness offerings and family-focused tourists. Despite the Koh Samui connection, nearby Surat Thani airport on the mainland is becoming a secondary point of transit to Koh Phangan and Koh Tao.

Summing up the boom bust boom impact of the Full Moon, the reality is Thailand’s smaller resort islands are grappling with the issue of mass tourism and reality of the current tourism demand that remains seasonable and disruptive.

 

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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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