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Pulp Fiction – Phuket tourism by numbers

Bill Barnett

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Pulp Fiction – Phuket tourism by numbers | The Thaiger

by Bill Barnett

This week netizens have been captivated over a photo in the blogosphere proclaiming that “Phuket high-season was dead as a dodo.”

Excuse me as I digress for just a minute on the subject of dodo’s, which is clearly something I know nothing about, hence putting myself on par with the individual proclaiming the ‘end of days’ for Phuket, on a pictorial blogpost.

The dodo bird species according to most sources I read about is an extinct flightless bird, who gave birth to the term “dead as a dodo. Moving on, the bird was a character in Lewis Carroll’s iconic Adventures in Wonderland. Interesting (maybe), but please now follow me down the rabbit hole of fact versus fiction, and check out the state of Phuket’s tourism market.

Our most accurate benchmark of Phuket tourism remains the gateway international airport, and data is collected and reported by the AoT (Airports of Thailand). Oftentimes passenger numbers are inaccurately referred to as tourists, whereby in fact the term passengers include residents, business travelers, and often visitors transiting to Khao Lak, Krabi or elsewhere

Yet, the AoT data is relevant and is the best source of numbers for tourism that exists. There is not a direct method for counting the number of tourists traveling by private car or public transport to the island, but in the scheme of things, let’s consider that to be somewhat negligible in the day and age when everyone can fly.

Last year Phuket International Airport hosted a record number of passenger arrivals both on overseas and domestic flights exceeding 8.4 million. Putting 2018 into perspective, we have looked at latest actual numbers for January through October and factoring in current trends anticipate that full year 2018 will see close to 9.0 million passenger arrivals. This would be an 8% increase in year-on-year traffic. and not bad. considering the impact of the mid-year boat sinking episode. Good news, Phuket is far from dead.

There is little doubt that there was an impact of the Phoenix disaster on the Chinese market. The first six months of the year was a burner and things turned challenging in the third and fourth quarters. But for clarity, the bottom did not fall out of the market.

Passenger arrivals for the period of July through October registered a 1.3% cumulative fall compared to the same period last year. As the episode went through the cycle, each succeeding month saw an easing of the impact. Looking at the larger picture, domestic arrivals decreased 5.2% but international arrivals grew by 2.4%. during the four-month period. For those looking at disaster scenarios, is a 1.3% drop the end of the world? I think not.

In all fairness, the China story still has other moving parts such as the depreciation of the currency against the Thai baht, and rising competition of other destinations such as nearby Vietnam. One macro factor that drives the metrics remains the domestic arrival basket, as passengers who come via Bangkok or other Thai airports into Phuket are counted as into the domestic category and many of these are not Mainland Chinese so perhaps there is a need for concern is on other feeders of Phuket tourism such as Europe and Australia.

Mono tourism continues to be an ongoing issue and looking at year-to-date international arrivals in the first 10 months of this year, China stands at 43.4% and Russia at 11.6%, so over half the overseas profile is two markets. Going down the line in order of numbers comes Australia, Korea, Malaysia, U.K and Germany. Clearly anyone who runs a business understands the importance of diversifying the base and creating less dependence on these two segments. Phuket’s epic rise over the past decade has come at a cost of diversity, but similar stories can be seen in trends across Asia’s other leisure destinations.

Before I close out the tourism shop talk I did take time to check out new data from STR who are the leading authority on hotel market performance and there is some cause for concern on this front. Key metrics for hotels remain occupancy, average rate and RevPAR (revenue per available room).

STR’s numbers reveal the first six months of the year were strong but the numbers fell in July to October. The impact of the China incident was clearly demonstrated. Looking at eleven month market-wide performance, occupancy fell 3.8%, but surprisingly rates pushed up 5.4%, which drove RevPAR to a 1.4% positive.

Looking at year-on-year comparisons of November to evaluate the easing China impact, there was only a 1% decline over the same month in 2017. Things are getting better, yet December last year was a record setter and it’s unlikely the same momentum can be held. One thing that is clear in STR data is that when Phuket hits stride in high and peak months, most hotels are able to drive rates up and impact RevPAR. STR data is broad and again some hotels do better, some worse but it remains the best market indicator available.

To close out our hotel tourism trip, what keeps me awake at night? Aside from a recurring concern over the big sleep, certainly growing noise about a global recession, mono market reliance, and a hyper development supply pipeline of new hotels that is likely to create a supply demand imbalance as the market slows. Nothing moves in straight lines forever.

Summing up the ‘Phuket death of the dodo tale’, I’ll let you decide this one, perhaps by the numbers and not just an Instagram-rant moment.

Phuket is busy. Below is a dodo.

Pulp Fiction - Phuket tourism by numbers | News by The Thaiger

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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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News

30 dolphins greet visitors to Similan Islands

Greeley Pulitzer

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30 dolphins greet visitors to Similan Islands | The Thaiger

Tourists were treated to the sight of a school of dolphins in the Similan Islands off the Phang Nga coast on Sunday.

Tour organisers said that around 30 dolphins swam close to the boat six or seven miles offshore, creating excitement for passengers. It was the first time dolphins had been seen in the vicinity since October 15.

The Similan Islands National Park director said they were bottlenose dolphins and were among several species now returning to the area following a five-year closure of the park for environmental rehabilitation. Food is again plentiful there for them, he said.

Tourists are forbidden to feed wildlife lest the free handouts alter the animals’ natural behaviour, and the park’s waters are also very sensitive to contamination from human disease and marine debris, according to the director.

SOURCE: nationthailand.com

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Patong

Phuket hotels slashing the price of rooms

The Thaiger

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Phuket hotels slashing the price of rooms | The Thaiger

by Sophie Deviller

Hotels on Thailand’s most popular holiday island are being forced to slash prices, with rooms left vacant and beaches sparse as Thailand’s tourism chiefs struggle with a plunge in Chinese visitors caused by the US trade war and a stronger baht. Phuket was the most visited destination in the country last year, after Bangkok, and a good gauge of the state of its crucial travel industry.

Tourism accounts for 18% of Thailand’s gross domestic product and Chinese holidaymakers make up more than a quarter of total arrivals. But while 2.2 million people from the country visited in 2018, according to official figures, the numbers for January-September were down almost 20% year on year.

Claude de Crissey, the French Honorary Consul in Phuket and owner of about 40 rooms in the Patong Beach area, says Chinese tourists are usually present even during the current low season.

“That was not the case this year,” he said, adding he had to lower his prices by as much as 50%.

The problem is not only in Phuket, with hotels also struggling to fill rooms in the seaside resort of Pattaya on the mainland and on Koh Samui.

Trade tensions with the US have already made some Chinese reluctant to take holidays owing to uncertainty back home, while the Thai baht has risen about 10% against the yuan this year.

A boating disaster off Phuket’s coast that killed 47 Chinese holidaymakers in July 2018 also scared some off.

“We are worried,” said an industry insider, declining to be named due to the sensitivity of the topic in a country where tourism provides tens of thousands of jobs. Adding to the headache is the fact that more than 3,000 new hotel rooms are being constructed on the island, raising the question of who will fill them.

Phuket hotels slashing the price of rooms | News by The Thaiger

“In terms of business, it’s not good,” said Kongsak Khoopongsakorn, vice-president of the association of hotels in Thailand and director of Vijitt Resort.

“Because … we have more hotels, more rooms to sell, we have more restaurants, more coffee shops.”

Still, tourism authority chairman Yuthasak Supasorn said he remained “optimistic.”

“We should reach our goal of 39.8 million foreign visitors.”

However, that is only up from 38.2 million in 2018, much less than the jump seen from the previous year’s total of 35.6 million.

Counting on India

Now hoteliers and tour package operators are targeting visitors from elsewhere, particularly India, which experts see as a huge untapped market.

A rapid expansion of the middle class in India, increased direct flights and visa-free travel have prompted Thailand to revise forecasts upwards.

It now expects two million Indian tourists this year, after an increase of nearly 25% on-year in the first seven months. But for now, the lower arrivals is evident on the streets of Phuket.

“I’ve never seen anything as bad as what it is at the moment,” said Paul Scott from Australia, who said he has been coming to Thailand for 15 years.

He mainly blamed the stronger baht for the drop-off but also the fact that Thailand wasn’t the untouched vacation paradise it once was. “Now it’s not so new … and it’s not cheap,” he said.

SOURCE: AFP

Phuket hotels slashing the price of rooms | News by The Thaiger

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Events

The 15th Mai Khao Marine Turtle fun run attracts more than 4,000 runners

The Thaiger

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The 15th Mai Khao Marine Turtle fun run attracts more than 4,000 runners | The Thaiger

4,000 runners from Thailand and overseas took part in the 15th Mai Khao Marine Turtle Fun Run and Half Marathon 2019 yesterday, starting from the Phuket Gateway.

The event is expected to raise 700,000 baht for the charity, now in its 15th year. The money raised goes towards to The Mai Khao Marine Turtle Foundation, which is committed to protecting the marine and coastal environment, and ecosystems, for the wellbeing of sea turtles that nest in the Mai Khao beach and the surrounding areas.

The annual race also provides funds for thePhuket Marine Biological Centre’s Injured Turtle Rehabilitation Program and The Third NavalArea Command’s Turtle Hatchery Program.

The race was in its 15th year and runners of all ages and abilities took part in the race. The morning’s racing was divided into five categories – the 21.1km half marathon, 10.5km mini- marathon, 5km fun run and 3k family run and VIP participants for all the races. The route of 21.1 kilometre race took runners northwest along the Haad Sai Kaew beach towards Thao Thepkasattri bridge, past the rural road No. 3006, run along the road – Pi Lai viewpoint area returned back along the T. Baan Tha Nun to the iconic Sarasin bridge before finished the half marathon in the Phuket Gateway.

For Mini Marathon 10.5 km – Over all category, Mr. Chinnawat Changlek clocked 39 minutes and 40 seconds to clinch victory in the male half marathon, winning prize money and a trophy with the signature of Phuket’s Governor. The winner in the female mini marathon was Surakarn Wanna with a time of 47 minutes and 47 seconds.

Winners also received a prize gift voucher as well as a medal. Congratulations to all participants.

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