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Economy: Phuket Remains a Pear-Shaped Pearl

By Alan Morison

Thursday, July 16, 2009

Phuket Economic Analysis

WHETHER there are now welcoming flowers at Phuket International Airport or they have been stolen again, one thing is certain: the number of arriving passengers continues to decline.

Figures for the first half of 2009 dipped by 13.28 percent compared to 2008, with the six-month total amounting to 2,800,790 arrivals and departures.

The positive that can be drawn from the figures is that June was only 8.60 percent down on the previous year, a smaller fall than most other months so far.

Remember the good times? The boom beginning to 2008 appeared to indicate that records would be set. June 2008 produced another positive increment, up 9.5 percent on June 2007.

The reality is, then, that in terms of passenger growth, the latest figures take Phuket back two years. Such is the state of the world at present that many people long to go back a lot further, back to 1977, definitely not 1997.

If two years of loss of growth were all there was to it, then the island's future might look brighter. However, all the evidence indicates that the passengers who are still coming have far less money to spend.

For those who wish to have an accurate measure of the pain so far, July's figures last year were a shade on the positive side. Then the pearl of the Andaman went pear-shaped in August and September.

The reason? The three-day Phuket airport blockade.

One odd circumstance is that while there is at present a huge fuss and the possibility of charges being laid over November's airports invasions in Bangkok, the seizure in Phuket has simply been overlooked.

In hindsight, perhaps if the people responsible had been pursued diligently back in September, Thailand's political course might have been different ever since.

That said, the airport invasions have proven to be just one of several major contributing factors to the tourism industry's difficulties.

On the positive side, while Phuket is experiencing lean times, only Hua Hin/Cha Am seem to be surviving in better shape within Thailand.

The managing director of one of the island's leading resorts has told Phuketwan that first quarter 2009 occupancy was down 30 percent on the record figures of 2008 while the second quarter was 20 percent down.

He is one of those eternally positive people in the industry who is constantly finding novel ways to attempt to unleash the cash flow lifeblood that all businesses need right now.

Remember, Phuket's pain now extends back almost 12 months. It's little wonder that confidence, appropriately comparable to a pair of holiday shorts, is currently at knee-level, and likely to fall still further.

We hear that some spas and other ancillary businesses are really finding times tough, and we figured the wellness industry would be . . . well . . . well and truly hurting.

Not so, said one player, indicating that in bad times, people may still feel maintaining good health is even more important than in prosperous times.

But back to those figures. We can't say whether the swine flu-H1N1 factor has kicked in to this point, as seems likely to become certain with July's figures.

But in June, international passengers to Phuket declined by 14.22 percent while local fliers dipped by 4.95 percent.

While it's pure guesswork, that difference to us indicates there's a virus factor in the figures, along with greater concern overseas about political uncertainty in Thailand.

And we can expect the virus factor to become more pronounced, probably meaning that more people will holiday closer to home, making the assumption from now on that it will be better for health, as well as wealth.

Some people think the coming Asean meetings will be good for marketing Phuket. Others say it will be of absolutely no benefit.

As everyone on the island knows, there is no point in standing around like a Pacific cargo cult tribe, thinking positive thoughts and wishing for the tourists to fall gently from the grey Summer skies.

We think the coming months will see more discounting, with growing desperation now to find the bottom, then work back up.

Will there be a high season? Yes, but probably at low-season pricing. We suggest it should be called Summer Plus.

Economies in the region seem to be rolling again, but tourism will take longer to return. The good times may be a little while off yet.

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The good times may be gone for good ! How many thousands of complaints does it take to wake some authorities up? Under-planning and over building, dirty roads and smelly drains, tailor touts and time-share drunks, problems at immigration , (the welcome smile is gone!) rip off taxis from the airport, dangerous mini bus tours, the lawlessness of the roads, no police checks and radars (??), and last but not least no public transport and violent tuk tuks Is this the way to welcome tourists anywhere in the world ? Wake up, there are lots of clean places to go on holidays. Once Thailand was a faraway exotic cheap destination, its still faraway but much less exotic and certainly not cheap .

Posted by elizabeth on July 16, 2009 18:28

I was going to make a comment but Elizabeth has just about done the job. It's not like the authorities don't know what's got to be done, but simply the lack (or fear) of actually doing it. Why not imposed a fare schedules on Tuk Tuks? It'll save people getting ripped off and might increase their business. On just this subject alone the question has to be asked ... 'Will Governor do it? Forget the flower displays ... action is needed.

Posted by Noddy on July 16, 2009 20:47

Before we lay these declining numbers at the feet of airport closures or rip-off taxis, should we not first check the numbers at other resort destinations such as Mexico, Maldives, or the Caribbean? If they are similarly down, then the economy is likely the culprit...

Posted by matt on July 16, 2009 22:32

Elizabeth is RIGHT! Change all Thailand society and enforcement of laws to become just like 'home' in the UK etc (and expect to pay the same rates). Problem sorted. (?)

Posted by Balance on July 17, 2009 00:31

I first came to Thailand Christmas 2002, every year since i have stayed 6 months. i recon i have spent 60.000 pounds in that time. Its now 7 years on and for the first time i don't have the same feeling about returning.

Economics is something Thais don't seem to understand, because things are bad they put their prices up, eg beers at bars, and wonder why nobody goes there. If they reduced their prices they would get a lot more customers and earn more money.

And what with all the bad press about the place, its
sad but i think Thailand's had its day. Time to move on.

Posted by Nick on July 17, 2009 03:22

Liz is right and has shown some of the problems but unfortunately has not given any solutions.

The only way any of the above can be rectified is by putting pressure on the politicians and public servants (police, government officials and lawmakers etc) but only after weeding out all the corrupt people in these areas. And it must be done from the top down, not the bottom up.

I first came to Phuket in 1993 and fell in love with the place. Since retiring 4 years ago I built a house and now reside here.

It has broken my heart to see what Phuket has now become.

It is not a Pear shaped Pearl it is more like a "Withered and Dried up Prune"

Posted by Whispering Jack on July 17, 2009 13:20

@Elizabeth, @Noddy, @WhisperingJack: Yeah, sadly, yeah.

Posted by D on July 17, 2009 13:57

I feel that just doing something about the Tuk Tuks would be a massive lift!

Imagine if they where moved from Patong beachfront and replaced with beautiful palms! Tourists who return would wonder if they caught the right plane!

Posted by Sean on July 17, 2009 20:49

All the above comments are correct i used to spend all my holidays based in patong this town is now shabby the beach is becoming dirty.The main fault is the corruption. most bars supposed to close at 2oclock just pay the money and stay open till 4 0r 5. Build anywhere as long as you have paid the right person we all know whats going on. Patongs dead right now and its got nowt to do with airport blockades or swine flu its because of the world recession and the place is now an expensive rip off dump.Tourists who can afford to holiday are going elsewhere to get value for money not to get ripped off and hassled .Its a crying shame, but place has gone down the pan.

Posted by ALAN on July 24, 2009 20:57

Have we not forgotten the gangster element now? who wants to dodge a shootout in the afternoon at a resort such as patong. This has nothing to do with airport closures thailands political problems or swine flu.

why has there not been any new information on the whereabouts of the gangsters and what the police are doing or are going to do to stop the mafia that controls patong, because ir sure isnt the police who controll it.

Posted by Billy on July 28, 2009 18:53

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Economy: Phuket Remains a Pear-Shaped Pearl

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