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Fewer jobs a likely consequence of Phuket's lost revenue

Layoffs Loom as Pay Pressures Mount on Phuket

Tuesday, November 10, 2009
Phuketwan News Analysis

CONCERNS are growing for the jobs of Phuket workers at resorts and in ancillary industries as revenue from tourism continues to run at well below normal levels.

Bhuritt Maswongssa, Marketing Officer of the Thai Hotels Association (Southern Chapter) says that occupancy rates are at 60 percent for November-December on Phuket.

''This is well below the 80 percent that could be expected in a normal high season, and the room rates are also substantially discounted,'' he said.

''Inevitably, this means problems for resorts and their staff early in the new year.''

Discount packages meant that people who normally paid for five-star or four-star accommodation were enjoying the same facilities at two-and-a-half star to three-star prices, he said.

This is turn puts pressure on three-star resorts.

Khun Bhuritt warned that lay-offs were likely. This would be the second high season in a row where owners were unable to gain sufficient income to sustain all their staff through the coming low season.

He said it was time for attempts to be made to seek alternative models. For example, although dynamic pricing has become popular, some resorts might find it more productive to charge the same set room rate all year long.

Different approaches would be required for long-term survival.

''The social consequences of an extended period of downturn will also bring problems for Phuket,'' Khun Bhuritt said. ''Crime could become more of an issue.''

Concessions have already been made at many resorts to cope with lower tourism figures that followed the record 2007-2008 high season. The invasion of Phuket airport by political protesters in August 2008 signalled a dramatic decline in tourist numbers.

While that decline appears to have finally levelled off, it has come at a high cost. Discounting has restored the numbers, but at vastly reduced levels of revenue.

And restoring rates to 2007 levels, as resort managers will tell you, is extremely difficult given the ''cannibal'' effect on Phuket and the customers' wide range of choices at other destinations suffering similar setbacks.

Many resort management teams have so far tried to keep all staff by imposing reduced working hours.

While hotels on Phuket have traditionally retained large numbers of staff, some operators more recently have opted to employ fewer people but at higher rates of pay . . . and expectations of more intense workloads.

The concept of smaller numbers of fulltime staff, with a larger pool of seasonal or casual workers, is also being looked at closely.

Resorts that have a special relationship within local communities will not find enforced change easy. Inevitably, there is a flow-on effect.

Tourism's associated industries, restaurants, entertainment, tours and diving, are also feeling the crunch because the tourists who are coming do not have large amounts to spend.

Even if all the rules are followed and special allowances are made for sacked workers, the process is invariably traumatic.

Phuket, it seems, can expect a tearful new year.

Comments

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Have you guys in charge of Phuket ever thought about that there could be also other reasons than economic downturn not to come to Phuket anymore? I and a couple of friends were regular visitors to Phuket for seven years until 2008.

We always came in march and brought our bicycles with us to prepare for the european bicycle season. But now we found the traffic, driving skills of most people here and road conditions are simply too dangerous to train here anymore...sometimes it seems some certain species of car-driver want to kill you :(:(:(

cheers Daniel

Editor: If there are places in the world where motorists like cyclists and are happy to share the road with them, please let us know.

Posted by Daniel on November 10, 2009 21:22

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As someone who lives in a usually very busy South of France tourist area, I think Phuket has to come to accept the waning tourist industry. I have said before, Thailand is not cheap.

Once the average tourist has paid around 800 to 1000 euros for a round ticket, then a few thousand baht a night for a hotel, a dozen nice meals, boat trips etc, he will find that his two weeks in Phuket has cost him much more than two weeks on the French Riviera.

If you add to all this the great difference in quality, infrastructure, no public transport and the numerous scams, then Thailand is not such a great deal !

I love this country and have been coming here regularly for 25 years, but take your average tourist, alone or with family with kids, and there is a lot here to frighten you off. I have met many who have said they will never come back!

This is the difference between viable holiday destinations and lots of places in Thailand, which don't benefit from return guests. .Shame.

Posted by elizabeth on November 11, 2009 05:17

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You are probably right that nowhere do motorists like cyclists. But there are places where the motorists have developed driving skills and follow the rules of the road. You must agree the way most motorists drive around on Phuket Island is just simply reckless.

About the road conditions you know, too. The far left side, where bicyclists are supposed to ride, is often covered with sand, broken glass, lost concrete, potholes, wrongly parked vehicles and much more to tell. Wit ha bicycle it's an obstacle run.

Posted by Daniel on November 11, 2009 17:17

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Elisabeth, what is the last time you were at the Cote D' Azur? The last time I was there I paid 15 Euro for a cup of coffee, a juice and an espresso, the same things in Phuket buys me dinner for two at a local place in expensive Patong.

Phuket is expensive by Thai standards, but still good value if you compare it to resorts in Europe, Caribbean and even Australia.

Of course if you live in France and drive down to the Cote, not having to pay for an air fare its cheaper. However the smiles at the Cote were rather sour....

Posted by wm on November 12, 2009 13:11

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I dont believe that you can say Phuket is expensive,where are you staying or eating? Maybe if you have a closer look and do some homework then you can comfortably eat and sleep in Phuket inexpensively, I am only on a pension and stay for 3 months every year.It surpirises me when people say that a massage is expensive A Thai massage for AUD $6 at home its AUD $60 and people dont tip, I have no interest to travel to France or Europe as Thailand has so much to offer at minimal expense I have been coming for many a year and plan to travel to Thailand for many more years.

The very fact that the best that Thailand has to offer is its people who welcome all with smiles and honesty and its geniune. Well done thailand

Cheers Alex

Posted by Anonymous on November 12, 2009 17:57

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Dear All
I am fed up with with hearing all the lame excuses as stated above ie airport demos, decline in the economy in fighting within thai policy makers. Why are the TAT and people like khun buritt ignoring the main reasons why people are staying away? its the scams, the rip-offs, double pricing and the overall attitude from thais to farangs. These are reasons why Patong is struggling.

Posted by william dale on November 14, 2009 05:31

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WM,
Better a stale smile than a faked one.

Posted by HorseDoctor on November 16, 2009 20:49

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I used to love coming to Phuket to be with Thai people and enjoy Thai culture. As a westerner I loved Thailand because it provided an escape from the Anglo world and a get away from all the my fellow westerners (I deal with every day at home). Now whenever I go to Phuket, all I ever see are mostly European westerners - arrogant and/or elitist acting, behaving as if they own Thailand and showing little respect for Thai culture or the Thai people. For example Songkran was a disaster. European clowns and drunkards running around making a mockery of themselves and the holiday. I saw several arguments and fights.

I'm sorry but when I go to Thailand the last thing I want to see are bunch of arrogant, elitist, disrespectful westerners. But sadly, this is what Phuket has become.

The added insult? Prices for everything actually increased - while the quality went down! I stopped going to Pattaya for this reason, and now I have stopped vacationing in Phuket for the same reason. Until this gets "resolved", I'm spending my vacation dollars in Bali, and Hawaii instead.

Posted by Lars on November 24, 2009 21:53


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