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Asian, Russian travellers keep Phuket tourism alive
Publication Date : 01-08-2013
Phuket's tourism industry is thriving despite the disappearance of visitors from Western Europe, thanks to the throngs of Chinese travellers who fill up hotel rooms but also strain the infrastructure.
"For the first time, travellers from legacy markets such as Western Europe are no longer present in the top five arrivals. What has replaced them are Asian regional travellers and the emerging Russian segment," Bill Barnett, managing director of consulting firm C9 Hotelworks, said yesterday.
According to the firm, in the first half of this year, nearly half a million Chinese travellers visited the resort island, compared to under 40,000 in 2007. Most of them arrived by air, which spurred a surge in direct flights to 22 from only seven in 2007.
"We are forecasting a record high 3 million international visitors for the full year 2013 with the duo of China and Russia boosting 44 per cent of the total overseas volume at the end of June. The mantra of demand is clearly Thailand's strategic location in the sweet spot 'window' of six hours and under airline travel time," he said.
C9's report shows that mid-year Phuket market-wide occupancy stood at 76 per cent, which is the highest level since 2008. More importantly, average rates year on year rose by 7 per cent for the same period.
"We looked inside the numbers and spoke to hoteliers regarding the trend of Eastern European tourists upgrading room categories or using higher-rated hotels, which is on the way up. This is apparent in the performance of the upscale tier and beach-specific west-coast locations where room rates have ticked higher."
A series of new, hotel-branded real-estate projects has tapped into the domestic and regional buying pools. Properties that in the past attracted end users are now focusing on investment buyers. A sign of the times is unit downsizing and lower price points, which in the branded condominium/apartment segment averages just over US$4,300 per square metre.
While concerns mount that growing overcapacity at the gateway Phuket International Airport could derail the island's current spate of success, the upgrading of the airport is now in full swing and is scheduled to be completed by 2015.
"With so much of the demand coming from Russia and China, the airport has been managing traffic by shifting scheduled and charter flights to off-peak hours, thus deflecting what very well could be a head-on collision. As to what the future holds, forget the West Side story, today it's all about the economic power of the East," he said.