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Plenty to cheer on Phuket but the real smiles may take a little longer

Phuket Economic Outlook: No Reason to Smile Yet

Tuesday, February 3, 2009
Phuketwan Economic Report

AS THE HIGH season draws to a close, figures based on forward bookings for resorts in Phuket and the region reflect a dismal outlook.

A Thai Hotels Association (Southern Chapter) survey of actual figures for December and projected figures for January and February demonstrates the flow-on effects of the global economic downturn and uncertainty about the future.

The survey, based on information from between 60 to 90 resorts, hotels and villas, is among the most reliable projections for early 2009.

Actual occupancy rates for December by all those accommodation units taking part in the survey averaged out at 54.48 percent.

While the THA figure excludes guesthouses, it compares with an occupancy rate of 65.82 for the whole of 2007, based on more comprehensive Tourism Authority of Thailand figures.

The TAT figures for all of 2008 are still being compiled. Tourist arrival figures for the first half of the year showed a year-on-year fall of 16.29 percent across the total number of international and Thai tourists.

The TAT occupancy figure for 2006, when the region was still recovering from the 2004 tsunami, was 60.69 percent.

Projections for January by resorts, hotels and villas that are members of the THA have yet to be superceded by actual figures.

Looking at the outlook for resorts, hotels and villas, they show substantial emerging downturns, especially at the high end of the market.

For January, the THA reports the outlook to be: five-star hotels, 43.17 percent; four-star hotels, 61.30 percent; three star hotels, 57.08 percent.

The average projected occupancy figure is 53.85 percent.

Figures for February are bleaker: five-star hotels, 26.28 percent; four-star hotels, 43.03 percent; three-star hotels 34.03 percent, providing an average of 34.45 percent.

The projected figures are based on Internet bookings as well as bookings through agents.

While it is difficult to draw conclusions from outlook figures, representatives from resorts have told Phuketwan that the coming low season is likely to be longer and lower than usual.

It will be a difficult time for the island's economy and have potentially negative social consequences.

Tuk-tuk and taxi drivers, for example, are likely to be competing for fewer fares. Service charge bonuses will shrink, and as they disappear, so will a sizeable proportion of the businesses that abound in good times.

Smaller brands in the diving industry, for example, are likely to find the downtime difficult.

While nearly all resort jobs have been preserved through a lower-than-usual high season, many of the high-end brands have contingency plans that will be forced upon them unless the outlook beyond March improves.

The only ray of sunshine: resorts in Bangkok and at other holiday destinations around Thailand are faring much worse than Phuket and the Andaman region.

It's a great time to refurbish and renovate.

As ever, the TAT figures remain difficult to reconcile with the number of arrivals and departures as recorded through Phuket International Airport, which remained around the 5.7 million figure in both 2007 and 2008.

However, in terms of the airport figures, 2008 took off to impressive heights then went into a decline that became more pronounced after the August airport blockade on the island and the even longer blockade in Bangkok in November.

How's your economy? Please tell us below via Comment


Phuket Passenger Numbers Steady: 2009 Unclear
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Phuket Passenger Numbers Steady: 2009 Unclear

Phuket Tourist Figures Nosedive in Q2
In slow motion freefall, official TAT figures for Phuket for the second quarter of 2008 trend down almost as severely as in Q1. And the island's Aussie saviors are now in trouble, too.
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Phuket's Future Forecast: Darkness at Noon
Phuket has a reputation as a great holiday destination but an island economic guru is forecasting a high season downturn of up to 30 percent, plus years of pain. Resorts are ducking for cover.
Phuket's Future Forecast: Darkness At Noon

Comments

Comments have been disabled for this article.

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based on the above... are hotel prices coming down?...would think there would be be cuts all round including the very expensive tuk tuks.
Editor: Resorts are offering more attractive deals. Phuket (and Thailand) are regarded as great value for long-haul holidays. There is no indication so far that tuk tuk drivers understand the likely impact of the global downturn in 2009 and 2010.

Posted by barry on February 5, 2009 03:50

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Is that so?
Do the pesty time share touts still hassle johnny tourist non-stop?
That's is your problem - nothing else

Posted by Kevin Wild on February 17, 2009 20:57


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