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Phuket is back . . . to 2007 figures but not 2007 income

Phuket Economy: Blue Skies on Island's Horizon

Wednesday, October 7, 2009
Phuketwan Economic Analysis

''PHUKET is back!'' was the saying made famous after the 2004 tsunami. And now we can say: ''Phuket is back . . . to where it was in 2007.''

Latest statistics on arrivals at Phuket International Airport reveal what seems a sensational improvement in tourism. The number of passengers who came and went in September jumped by a huge 36.48 percent year on year.

Great! But then, September 2008 was when Phuket suffered the aftermath of the three-day invasion of the airport by People's Alliance for Democracy supporters.

The protesters were absolutely certain that the tourist industry would recover quickly . . . and how wrong they were.

The Phuket invasion bounced like a Jungle Bungy to Bangkok airport in November, where the yellow shirt protesters got what they wanted, but wrecked Thailand tourism in the process.

That's why life is looking up, because the bounce last year was such a badly bungled one.

A total of 389,942 arrivals and departures were recorded for Phuket in September, a dramatic rise on the 285,705 for September 2008. But that was just 20,000 up on September 2007, which is probably a more honest comparison.

And if you weighed their wallets, the 2009 collection would come up considerably lighter than the 2007 variety. Some of the Gucci purses back then were probably genuine.

Great. It's the second month in a row that Phuket has recorded pluses rather than minuses. The minuses appeared through 11 straight months, from August last year.

A kind of recovery is inderway. It's the kind of recovery you have when resort room rates are still well down (and possibly still well down on those of 2007).

And it's the kind of recovery you have in the property sector, when fractional ownership is overhauling the concept of someone actually buying a property all for themselves.

Ah, 2007. Those were the days.

For the record, total arrivals and departures of 4,092,866 for the year to September 30 are 6.60 percent down on the same period in 2008.

More exaggerated improvements can be expected in October, November and December, which were all shockers last time around.

But the glorious high season of 2007-2008 set a standard that will take some beating. There were more than 3.4 million arrivals and departures on Phuket in the six months between October 2007 and April 2008.

Great. This was the time when everyone went out and bought a few extra tuk-tuks and jet-skis, even if they didn't have licenses, because there simply wasn't a cloud in the sky.
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The Phuket Tourist Association expects foreign arrivals to the island will drop by between 15% and 20% to 4.2 million in 2009, with revenue decreasing by 30-40% to 56 billion baht.

The projected drop in tourism revenue stems from aggressive marketing and sales promotions in which many hotels have slashed their room rates by more than 30%, or offer free nights and other additional services.

This has caused Phuket's tourism revenue to plunge.

The increase in chartered flights may not be so helpful because we may raise the volume of tourists but cannot expect their purchasing power.


Posted by Whistle-Blower on October 7, 2009 11:23

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