Connect with us

Koh Samui

Property Watch: Less is more for Koh Samui

Legacy Phuket Gazette

Published

 on 

PHUKET: We live in a world where percentages seem to matter and growth dominates our horizon. I still recall growing up and marking off on a wall in our house how tall I was. I could not wait to be older, and the irony today is how I wish that I could instead roll back the clock.

In Phuket’s crowded market, hoteliers are increasingly griping about our high volume and low room rate business. Yet, on the island of Samui in the Gulf of Thailand, owners and operators are for the most part grinning about a sustained increase in room rates.

Without a doubt, airlift has a profound impact on tourism fortunes, and a decade-long feeding frenzy by proliferating low-cost carriers (LCCs) has changed our island’s landscape forever. Yes, everyone can now fly, and fly they do. Even the legacy airlines like Thai International are now under the gun and facing an uncertain future as the low-cost disruptors have flown into town.

Last year, Samui hit the one million mark for airport passenger arrivals, as Phuket edges closer to six million. The key difference is that while Phuket has a public airport under the Airport Authority of Thailand (AoT), Samui has a private airport effectively controlled by Bangkok Airways. Also, Samui has a long-term environmental control restriction limiting flights to 36 a day due to noise concerns.

So, airfares to Samui are in fact more expensive, and there are no LCCs in that market. But last year, the ceiling of flights to Samui increased to 50 a day. Compounding the surge in capacity was Bangkok Airways shifting away from ATR-72 aircraft and using more Airbus A-319s, which kicked in more seats. Passenger arrivals were up seven per cent year-on-year.

But where the key highlight of the Samui hotel market comes into focus is on room rates. Hotels were able to increase rates across the market by 12 per cent, which has a positive domino effect of increasing RevPAR (revenue per available room) by 15 per cent. Phuket, by contrast, has had to rely on volume to drive RevPAR and players in the local market are worried about whether or not this approach is sustainable for Phuket’s hospitality industry in the long term.

Investor sentiment has always favored Phuket which now has close to 40 new hotels in the development pipeline. In Samui the number is 14 with only 1,400 new keys, as properties tend to be smaller in Samui. However, famous international brands such as Ritz-Carlton, Sofitel and Holiday Inn will make up part of the growth.

From our research on Samui, one impact that is apparent is the performance imbalance of branded properties compared to independent ones. In a head-to-head comparison, the brands registered higher average rates by 24 per cent and premium RevPAR’s of 28 per cent. Over in Phuket we have witnessed a spate of new conversions to chain management by existing properties as well.

Moving forward, Samui is not without challenges given a limited road network, stretched infrastructure and a booming China market that is using nearby Surat Thani airport with low-cost carriers as an entry point.

Yet fundamentals in supply and demand remain strong. While in the past the airport limitation was viewed as a weakness, in the end it’s been a blessing in disguise for Samui hoteliers.

Bill Barnett is the Founder and Managing Director of C9 Hotelworks (C9Hotelworks.com), a leading Thailand-based hospitality and real estate consulting firm.

— Bill Barnett

 

Get more from The Thaiger

📱 Download our app on Android or iOS
👋 Have your say on our Thailand forums
🔔 Subscribe to our daily email newsletter
📺 Subscribe / Join YouTube for daily shows
👍 Like/Follow us on Facebook
🐦 FOLLOW us on Twitter
📷 FOLLOW us on Instagram

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 *

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Koh Samui1 hour ago

Samui Covid-19: 14 new Black Club infections, 2nd small cluster

Thailand2 hours ago

40,000 cases a day could happen by September, says projection

Phuket3 hours ago

Phuket Sandbox Covid-19 infections: 35 today, 209 this week

Sponsored2 days ago

Experience Phuket’s Islands with 5 Star Marine

Welcome back to Thailand!

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

Thailand3 hours ago

Prayut says he will not resign, warns politicians to behave

Thailand4 hours ago

Bangkok Train market to possibly close for good

Coronavirus (Covid-19)5 hours ago

Border between Kanchanaburi and Myanmar closed until…

image
Join the conversation on the Thaiger Talk forums today!
Thailand5 hours ago

Covid UPDATE: 18,912 infections, provincial totals

Coronavirus (Covid-19)6 hours ago

PCD says don’t throw away used masks in water bottles after infections linked to bottles

Thailand7 hours ago

Government says it’s okay to criticise them, if it’s fact based

Thailand8 hours ago

Bangkok volunteer group “Sai Mai Will Survive” overwhelmed with calls

Coronavirus (Covid-19)9 hours ago

Phuket reservations slow down for August

Thailand12 hours ago

Covid UPDATE Saturday: 18,912 infections, news briefs

Drugs18 hours ago

Police nab 600kg heroin drug bust, year’s biggest in Northeast

Koh Samui21 hours ago

Koh Samui unaccustomed to Covid-19, many act in dismay

Thailand23 hours ago

Bangkok Airways extends flight suspension to August 11

Thailand5 months ago

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

Tourism5 months ago

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

Phuket5 months ago

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

Tourism5 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand5 months ago

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

Tourism5 months ago

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

Thailand6 months ago

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

Thailand6 months ago

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

Thailand6 months ago

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

Thailand7 months ago

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

Thailand7 months ago

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

Thailand7 months ago

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

Thailand7 months ago

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

Thailand7 months ago

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

Thailand7 months ago

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

Trending