The Phuket Paradox - "While the number of travelers coming to Phuket continues to increase, the Phuket economy is not prospering the way that it should be."

This is perhaps down to the quality of the tourists Phuket is attracting. All around the island there are Korean and Chinese eating in 50 Baht road side noodle shops during the day and in Korean 109 Baht self service BBQ's at night time. The rest the place seems to be awash with low class whorists. Things will not improve until there is a will or need to do so and until such time the talking will go on.

Posted by Nip on September 8, 2011 21:25

Welll what can you expect when out of one side of their mouth TAT says that they want "quality tourists" yet does trade shows in Korea, China and India and has encouraged mass tours from those countries. TAT has always been more interested in quantity rather than quality. It makes their graphs for year on year arrivals look good.

Posted by Sir Burr on September 8, 2011 22:26

Should we understand that "Quality Tourist" means "White European / Americans"?

Posted by pmoo on September 9, 2011 11:53

Pmoo, 'quality tourist' in practical terms means tourists with money. Skin colour or point of origin is irrelevant. Koreans have money. Japanese tourists have money. There is a growing Indian and Chinese middle-class and they also have considerable disposable income for Phuket holidays.

The problem is this. Quality tourists have options. Money buys them those options. A quality tourist expects - demands even - a quality holiday experience. Unspoilt beaches. Politeness, that they give their host countries, and which they expect in return. Quality transport - clean, affordable public transport or clean, air-conditioned and licensed taxis. And so on and so on. If they don't get these things, they'll exercise the option their money buys them of going somewhere else, where they can get a more agreeable experience for the same or less money.

Perhaps there are too many 4 star hotels. But perhaps the 4 and 5 star tourists are going to places with clean beaches, polite people and world-class public facilities. Places other than Phuket.

Only some decent qualitative market research will answer the question of 'Are there now too many rooms for 4 star tourists or are the 4 star tourists starting to shun Phuket?" My guess is the latter.

Phuket is descending into international farce. Sewage being pumped into the sea. Building regulations ignored. Tuk tuk and taxi drivers physically attacking visitors. And all the while, price gouging and disrespect.

I'll say it for the umpteenth time. Eventually Phuket will get the tourism trade it deserves. Mass market, cheap charlies, the so-called Zero Baht Tourists who get everything in a package and spend pretty much nothing in the local economy and the whorists and sexpats. That's all that will be left.

If that's what Phuket people want, just keep going just the way you are going.

Posted by Doug on September 10, 2011 00:50

Wow. "... TAT says that they want "quality tourists" yet does trade shows in Korea, China and India ,,,"

Nothing like a double dose of bigotry and xenophobia with my morning coffee. Sir Burr have you met Boonchart?

Pretty well said and reasoned Doug. It would be interesting to get some substantive numbers for the demographics/spending habits of visitors to Phuket. I can only speculate but I have to believe that growth in high-end European customers has ended for all the reasons you stated along with the increasing image that Phuket is gaining of being a lower end destination. It is just too far to travel unless you are getting some significant benefits that you can't find in Aruba or the Seychelles. To have a special vacation you want to be able to get off the hotel property and experience things and that has become almost impossible here. If there is any growth in the upper ends it will have to come from the very countries that Sir Burr would like to exclude. They are not traveling as far and won't feel the need to get as much value for their effort. If they are locked up in a five star hotel it won't seem like such a waste to them.

In college I had a roommate who always told people "he had class and social graces". He spent most of his actionable time disproving this theory. He never seemed to understand that wearing an Armani suit and quoting Lord Chesterfield didn't equate to having class. Similarly building beautiful resorts with high prices and exclusive client lists does not give you a high-end tourist market or at least not one that does much to help the local economy. To be competitive you have to offer more, be part of/have the support of the local community and have them participate in the customers experience. Preferably without it being a fake production e.g. Jamaica and their pretend waterfalls and reggae bands.

Mexico provides a cautionary example. In Mexico you have exclusive destinations, you stay at the resort and never leave the property. No taxis, no shopping, little or no cultural interaction and no money to anyone except the resort, maybe a restaurant or two. This is the future Boonchart proposes whether he realizes it or not.

Part of the charm of Thailand is that you could come here, stay at a nice place and get off the property to see a little of the local life and the money got passed around. For the most part Mexico has settled into a "lower-middle-market" destination with money only being spent on-site and very little passing into the local market. I have a place there and go back on occasion. My last visit was with a group and we never left my property. It's a vision that Phuket would do well to understand and avoid. There are other similar things as well. I remember many years ago that the locals in Oaxaca became violent about things like shopping tours, etc. Protests, beatings, robberies became all too common. There were beach ripoffs and scams and laughable official excuses. People did continue to come but they went less and less out into the community until they don't go out at all now. No money drifts into the local economy, the properties there are self-inclusive and those who have homes pay maids and security guards and cooks but no one else. They come, stay at their home, fly away. The areas around the resorts that were once thriving are now desperate, the natives are angry and violent. Taxi drivers and touts have turned into drug runners and gangs and there is little to nothing that the local officials can do to reverse it. Once the stigma is attached to somewhere it is irreversible and the mere mention of Mexico in certain circles will get you little but a sneer and a caustic comment about death squads. The beaches are still lovely, the weather hasn't changed and there are plenty of 5 star rooms to be had but it will never be what it once was. Local officials will tell you their plans, their dreams for bringing back the heyday but they had their opportunity, they chose to ignore it as long as they got theirs. They got theirs and will get no more. I hope that the deja vu I am feeling is just my own fear and does not come to pass but I have to admit I am more and more frequently considering my next location. You see I really don't won't to be somewhere were the thought process is "if you don't like it, go somewhere else". That is advice that I can't ignore.

Posted by Martin on September 10, 2011 10:27

@Doug
Unfortunately, I have to agree that you are right in your comment but TAT and the new government of PTP and Red Shirts have another agenda which is to bring as much tourists with or without money to look positive on arrivals. They said they plan to double the number of arrivals within 2 years which is unrealistic as according to the best economists around the world, the USA, Europe, Japan may enter in recession in near future therefor China and South-East Asia may have their lucrative export to those countries spiralling down.

Posted by Whistle-Blower on September 10, 2011 10:31

@ Whistle-Blower, TAT policy has always been numbers over quality. This is nothing new and nothing relating to the new government. Where they go from here is what will count as the policy of numbers above quality will (one) day, sink Phuket. Possibly literally :-)

Posted by Duncan on September 10, 2011 17:50

Thanks for your responses, Martin and W-B. What Martin was saying about Mexico certainly does chime well with a forecast I've been making for a while now - the 5 star hotels always have the ability to create a controlled and complete experience. Increasingly, that seems the way they will go.

It would also explain why the 5 star hotels have good occupancy rates and the 4 star hotels are struggling. (Although I take the article's point about promiscuous development of 4 star resorts). You can trade up to a 5 star and cut yourself off from the unpleasantness or drop down to a 3 star (there are plenty of good ones) and make travel around the island a little more affordable within your budget.

Martin's point about the 5 star Mexican resorts/holiday-makers not bleeding money into the local economy is also a good one. The Thai travel trade has been talking for a while about the so-called Zero Baht Tourists - usually Chinese tourists on a budget who get everything included in their package and are not minded to spend anything in the local economy. But of course, a 5 star vacationer can also be a Zero Baht Tourist if the holiday experience is a hermetically-sealed environment.

You can't blame the 5 star resorts if they want to adopt this tactic. They've spent multi-multi-millions of baht to fashion an incredible holiday experience on one of the most beautiful places on earth - only for it all to fall apart once the guests wander off the reservation to be met with tat, intimidation, corruption and fleecing.

You can see this taking of matters into their own hands mirrored in the response of foreign representatives with the official Aussie video of jet-ski scamming in production as we speak and a possible EU-wide travel advisory on Phuket scams in the not-too-distant future. After all, if the Thai authorities aren't going to act, then resorts and embassies alike have the right to protect their people.

There's no doubt that TAT has targeted the Asian mass market, but does it really make sense for Phuket? With such outstanding natural beauty, it's the one place in Thailand that could attract wealthy tourists (from Asia, from Europe, from anywhere) who would be willing to pay a premium to be there. But that only works if holiday-makers receive the courteous, friendly welcome that, perhaps ironically, they can expect just about anywhere else in the country.

Perhaps TAT's mass-market marketing strategy is an admission of defeat, or at least of the reality. The corruption that's endemic in Thailand - not just on Phuket - means that the spread of ugly little tourist developments will continue unabated.

In effect, TAT are acknowledging that the country's getting overdeveloped and losing its luster, so they're targeting mid-to-low-end tourist markets accordingly. And that's nothing to do with national government. TAT started to woo the mass markets (particularly in Asia) under the last government and they're continuing it under this one.

Posted by Doug on September 10, 2011 23:53