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Resorts guru Bill Barnett's list of projects is viewed with hope

Phuket Property 2009: Bill's List Inspires Hope

Tuesday, December 23, 2008
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THERE are 30 resorts on Bill's ''Build It and They Will Come'' list, which has recently become Phuket's most significant talisman for better times.

Bill Barnett's list is a reflection of the confidence in the healing powers of Brand Phuket, with its heady mix of great weather, beaches and coral, tuk-tuk rip-offs and exotic nightlife.

With passenger numbers through Phuket airport predicted to plunge by 30 percent in December alone and forward bookings indicating even worse to come, every smidgeon of hope is being grasped.

In recent weeks, Anantara in Mai Khao, Dewa in Nai Yang and a significant whopper, the 390-room Courtyard in Patong, have crossed themselves off Bill's list, simply by opening their doors.

And there are others poised and ready nearby, but not even mentioned: the eye-opening 298-room Rixos Premium in Khao Lak is planning to party from January 26, with Russian and German holidaymakers aiming to prove that Khao Lak is back.

Yes, Bill's list represents the blood, sweat and tears of an industry tormented in 2008 by foolhardy airport blockades, first in a warm-up bout of madness in Phuket, then with insanity overwhelming logic in Bangkok.

Has Phuket property and tourism been battered? You bet.

When the villainy reached its zenith, the Teflon coating protection that people had raved about just got ripped off, like a tamed superhero's mask.

Bill's list won't save the island from political idiocy, natural disaster or a global downturn. But in bad times, it's a comfort to know better times are possible . . .

Admittedly, some of the 27 entries that remain on the list are not racing to fling open their doors. But the list's very existence is what's important to an island down on its luck.

Tourism is the lifeblood for property and if the big brands are confident, then the future is . . . well, we know that 2009 is coming, ready or not.

BILL BARNETT'S lifetime in Asia means that he deals with each successive crisis before breakfast, then gets on with the day.

And the list? ''There are 40,000 accommodation units in Phuket, roughly, ranging from guesthouses, hotels . . . with villas on top of that.

''When we break it down, probably about 10,000 rooms would be in the international star-rated segment, one-star, two-star, three-star and up.

''The list represents a 50 percent increase in supply over the next three years.''

Now, it does not take a great deal of thought to see there could be changes to the list coming if that December downturn of 30 percent does not swing up fairly soon.

Yet as a statement of faith by well-known brands, the list offers every encouragement.

Economy, budget, upscale, luxury . . . the list covers them all, but lingers mostly in mid-scale and upscale.

''There may be more budget hotels in the stream, which are locally owned,'' Bill says.

The data indicates there are more Thai-based investors now becoming involved.

Among them are Ibis, with Erawan, which is a Thai listed company, Laguna with the Angsana, Anantara, which is the Minor group, Destination Properties, which is a Thai group, plus smaller projects including B-Lay Tong, which is Thai owned, and the very large Centara group.

''So we see more Thai companies, both private and public, in the investment profile, we see more mixed-use projects coming online now.''

No slowdown in building of resorts has been spotted, although there are some unannounced projects on the list.

''With new-builds, things are still coming up,'' he says. ''We see things moving ahead.''

But property, as distinct from resorts? ''We just don't see significant transactions,'' he says.

''Phuket is tracking the worldwide trend right now. It's not bucking the trend.

''Among people who are inquiring, there is certainly more interest in the upscale market, certainly the luxury villas.

''Most buyers are not looking to take on development risks. They are looking for units which are finished.''

There is not enough supply to satisfy demand in that area, he says, talking about 55 million baht and above.

''They don't want to take development risks,'' he says. ''People who are coming in now are asking for 30 or 40 percent off. They are asking for that.

''It's consistent with what we are seeing in Bangkok.''

Speculative buyers in the capital ''still haven't pulled down their pants yet.''

It has still to be determined where market values are right now because there are not substantial transactions going on.

Land, though, is still moving.

''If you are looking for premium properties, Bangkok is very volatile. There is no wild card in the Phuket market.

''We are not in a property dive. There are just no transactions. I don't think we are going to take a step backwards. There is product out there.

''I think it is going to be a stagnant year. We are not seeing new product launches.

''In a way, perhaps it is going to be a healthy correction because the next 24 months should allow the market to absorb some of the existing supply that is not being taken up, and we are simply not going to see the velocity of new developments.''

Phuket should do better than Thailand, he says. The political protests have affected Bangkok occupancy rates far more disastrously than those on Phuket.

''Phuket will outperform what market there is,'' he says.

Among resorts slated to open in Q1 next year: Outrigger Serenity Terraces Resort Phuket, Radisson Plaza Resort Phuket Panwa Beach, and Wyndham Vacation Resort Pantipa Phuket.

Keep an eye on Bill's list as a guide to the future of tourism and property on Phuket.

Bill Barnett can be contacted at C9 Homeworks. Telephone 076 271 536 or email: bill@c9hotelworks.com

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