This is somewhat what I had in iind for already sometime:

some kind of administrative price upward pressure, especially in areas like Patong beach that acutely require to be going upmarket to be sustainable, just a core principle as an idea:

to set for a high season minimum net price per standard (anly ABf inclusive, but nothing more) , say at level 250-300USD before VAT for an area up to Rat-U-Tip, for, say , 15years, with a kind of indexing, that would prsssure, on one hand, establishments to upgrade (in many cases meaning to be sold to more professional investors), as otherwise they will stay empty - this will take a couple year, and normally shoudl result that rooms become much larger and their number falling - that is good, at the same time aggregate revenue probably climbing, overall environment adapting to needs of higher-paying guests(sidewalks,other shops etc.). Fewer people, more revenue per visitor, who requests another higher standard ofservice than presently, and in total - that what exactly Patong needs.

C9 statistics says average gross room rate at Patong is ca.100USD,lowest on the island, highest average in MaiKao 300-350USD, so it is quite feasible to upgarde Patong rates up to Maikao

Posted by Sue on August 22, 2014 12:00

What happened to the free market? By all means crack down on illegal guides etc, but price fixing - its just not right - a business should promote in whatever way it sees fit, providing it acts within the law.

Posted by terry on August 22, 2014 12:18

Quality tourists will visit quality locations!

Not places controlled by self-serving mafia groups working with police protection. Places with crumbling infrastructure and dirty beaches. Places where you cannot walk five meters without being hounded by annoying touts.

Posted by Arun Muruga on August 22, 2014 12:24

Big changes continue in Phuket (which I assume will percolate to other appropriate areas of Thailand). This has to be to the long term benefit of the island. I am guessing there may be opposition in some quarters, but the new regime is clearly not tolerating any breaking of rules & Khun Santi has already expressed surprise at "regulations designed to control the tour industry were not enforced". It really is a positive & encouraging move forward.

Posted by Logic on August 22, 2014 12:24

Setting minimum prices for the same rooms and services never works at bringing more high spending tourists, it just loses the lower spending ones. Thisd isnt a closed loop system where uniform price rises are done in a vacum, tourists will simply choose other destinations with the more competitive pricing.

With the removal of sun loungers.. Removal of beachside businesses, removal of cheap rooms.. Expect to see a large drop in arrivals looking for those things.

Posted by LivinLOS on August 22, 2014 12:25

Trying to fix prices for hotel rooms is the daftest idea they've come up with.
Just fixing the tuk-tuk/taxi mob would bring back tourists. But that seems to be too difficult even for the army.
Tearing down a few salas and painting over their yellow lined parking spots is all well and good, but it doesn't fix the appalling reputation of their pricing.
This is all fizzling out, just like the DSI's "purge".
Poor Phuket.

Posted by jimbo34 on August 22, 2014 13:01

''Every reduction in price means that Phuket attracts cheap tourists, not quality tourists,'' Khun Santi said.
What the hell it means ?! Are you able to give a service of the quality ? are you in quality even ?! how dare you are to criterise the tourist in this way !!
how easy you forgot the day crying for the any tourist to come to phuket!

Posted by Oscar on August 22, 2014 13:21

You first solve the problem of corrupted police officers and other officers, clean the street agencies,counter-desk's, illegal working people ! than talk about the High end or quality tourist, first clean yourself !

Posted by Oscar on August 22, 2014 13:27

So are we now in a communist state? Run by people like Santi Pawai who clearly has no idea about the free market.

How on earth did this guy get appointed to such an important post?

Posted by Smithy on August 22, 2014 13:49

This is wrong on so many levels and also somewhat insulting.

First - Price fixing is wrong, is that not the issue with taxi drivers the authorities are trying to stamp out. What idiot would suggest artificially inflating prices.

Second - maybe I am not the sort of quality tourist the island is looking for. 15 trips in 8 years staying in the better 4 or 5 star properties and eating out a lot. Choose your words carefully or people will be insulted.

Finally - Phuket is not cheap. It may have cheap elements but in general it is not cheap. I think some people over there need to re-adjust your mindset. We pay circa 2 x as much to spend time on Phuket as we could on Bali. Service standards have declined and the whole experience is not as enjoyable as it was when we first started coming. We are already questioning Phuket as a continued bi annual holiday destination something like this would make it a no brainer. I have been expecting the changes currently going on to see prices go backwards as they are artificially inflated with all the under the table stuff already.


I love visiting Phuket don't get me wrong. I think the cleanup is excellent and can't wait to see it. But don't get over excited with things.

Posted by Darren on August 22, 2014 14:13

Most tourists, especially families, want to spend as little as they can on the best accommodation they can get so that they can spend more outside their hotel. Regulating prices upwards will retain more tourist spend in the profits of hotels not increasing it in the local economy. A closed/regulated tourism market is not going to result in more quality tourists just less across the whole range of accommodation. Seems like a kite flying exercise from a new appointee.

Posted by Alan on August 22, 2014 14:13

Quality makes the prices and determines the clientele. A simple rule of free market economy, just not widely known here. Phuket is big enough for all levels, and needs them to fill capacities.

Posted by Resident on August 22, 2014 14:30

Price-fixing is definitely not the solution. Maintaining a cartel in room rates is adopting the same tactic as the cartel of taxi and tuk-tuk drivers who all stick to the same price and allow the customer no choice.

Tourists are not stupid. They can recognise price fixing and will take their $$$ elsewhere. They will choose a hotel based on facilities, service AND price,

As far as hotel and tour agents paying commissions to tuk-tuk and taxi drivers for bringing customers to them, the commission is paid when (and only when), the customer decides to use the facility. That commission does not mean that the customer's fee is artificially inflated - the commission is paid by the hotel, not the customer.

For example, if I charge 1,000 baht per night for one of my hotel rooms, that is the price that the customer pays, whether they walk in to the hotel, book online, or are introduced by a taxi driver. Any commissions involved are the business of the hotel, not the customer.

Paying a commission to a tuk-tuk for bringing a new guest to my hotel is exactly the same as paying a commission to Booking dot com for 'bringing' me a customer from online.

Is Khun Santi suggesting that I also stop paying commission to Booking dot com???

Posted by Simon Luttrell on August 22, 2014 14:52

Impossible, illegal, not solving any problem trying to regulate hotel prices. Every hotelier can and must be able at any rate he wants to. Standards are very different and they must be, prices are subject to demand and season, currency exchange rates, economical situation overseas etc. Seldom heard such a nonsense.

Posted by Hajo on August 22, 2014 15:29

Controlling prices and setting standards is most certainly not a brief for a newly-appointed head of the Bureau of Tourism Business and Guide Registration. It is for hotel owners and managers to run their businesses as they see fit, as they are the ones who know best. Every hotel provides a different standard of facilities and service and also has its own differing uniform costs. Bringing in price fixing leads to a cartel which in many countries is illegal. Leave the hotels alone and let them set their own prices so they are able to operate unhindered by stupid regulations such as price fixing.

PS. @Sue: Is your minimum net price idea for Patong worked out on a daily, weekly or monthly basis?

Posted by Pete on August 22, 2014 16:01

"Controls on prices would end commissions of up to 50 percent now being paid to taxi and tuk-tuk drivers - an excessive rate that some people say will eventually destroy Phuket's tourism competitiveness."

Suggests the aim of this "price fixing" is to eradicate excessive taxi/ tuk tuk commissions... surely better to address the problem head-on and not try to push it on the hotels. Price-fixing is wrong in my opinion, and even more difficult to enforce when some "authority" is fixing those prices and it is not a self-serving cartel like OPEC.

Nope... don't see this idea making it off the drawing board in its current form.

Posted by Duncan on August 22, 2014 16:18

[quote]
But are you paying 50 percent commission to Booking.dot.com or a more reasonable rate...
[/quote]

Typical commission rates to online agents and taxis is no more than 25%.

But I am aware of some hotel businesses who pay up to 50% for taxis to bring them potential customers. But as I mentioned before, the commission is zero if the potential customer decides not to stay.

Posted by Simon Luttrell on August 22, 2014 18:35

- Simon

You comparison is fatally flawed.

Booking.com is a professionally run company which has invested in a service and infrastructure to provide booking services.

A tuk-tuk driver is an public transport vehicle operator turned opportunist and coercing his passengers to consider your or others accommodation options.

People use taxis to get from point A to B, not to be subjected to all types of strongarm sales tactics.

I wish you would discontinue paying drivers such commissions. They do not deserve it and doing so only encourages them to continue.

Posted by ThaiMike on August 22, 2014 19:49

@Pete

Figures I quited meant up to or incl. RatUTip, essentially beach front and next lane , thought to be prime part of Patong for accommodation.
Further toward Nanai no restriction.

Your witty remark about daily/monthly savage surely has a point as Patong now is too cheap, it is in need of total redesign, but whole area is anchored to low price segment , so real incentive for accommodation to go upmarket. Surely no one will pay 300USD+VAT for what is on offer today , for some places like Graceland it would be easier to upgrade , for many it would mean complete redesign and demolition before rebuilding more appropriate

It is only normal that close to a beach are more expensive.
To attract new customers for Patong in the price segment 250-300USD+VAT/per night per room, which in general is by far not really expensive - is what a lower/middle middle class of US routinely pays for holiday - there should appropriate competitive offer for customers, otherwise accommodation will stay empty.

It would take some years for rebuilding , bet reward is rather high - gentrification in this case would achieve both environmental target of fewer number of tourists and possibly economical one too of higher aggregate revenue.

Posted by Sue on August 22, 2014 21:33

@ThaiMike

Simon is in the different market segment - people do not book airport hotels when their flight is delayed etc.
Taxi drivers as a distribution channel is absolutely appropriate one for this segment, and then thus channel is getting its part of the total price.

Posted by Sue on August 22, 2014 21:36

Interesting concept on paper but in the real world market forces decide what the traffic will withstand add to that the diversity of accommodation 5 star mega luxury to the humble guest house fixed pricing cant work, says this will stop tuk tuk commissions how about fixing the transport problem first train tram mono rail cable car bus anything, then market forces will sort out the tuk tuks quality tourists may even get quality taxi services and not self serving extortionists on wheels.

Posted by slickmelb on August 23, 2014 01:11

I just come from Rawai where they usher tourists to a Fruit Stall that appears to be open late at night.

Charging ridiculous prices for the fruit.

Posted by Tbs on August 23, 2014 01:27

I fear if the prices increase even higher, that might tip the balance. After all there are so many other holiday destinations to chose from these days, all competing for the same thing, and money is extremely tight.

Posted by reader on August 23, 2014 07:51

@ThaiMike

Perhaps I need to clarify my point that I'm talking about passengers arriving at the airport who have not booked their hotel, and who ask their taxi driver 'take me to a hotel near to the airport'.

If the taxi driver brings potential guests like this to my hotel, AND IF the guest is happy to stay after inspecting the room etc, then it is only 'fair' to pay a commission to the taxi driver.

But I do not condone 'kidnapping' of passengers who already have pre-booked or pre-paid their accommodation.

Posted by Simon Luttrell on August 23, 2014 08:25

Price fixing which is illegal in some countries if set up by businesses without the government doing it does not work and never will in democracies
This is not a communist country let the business owners decide what they want to charge for what type of accommodation
Its called free enterprise and big brother should keep his nose out of it

Posted by Peter Allen on August 23, 2014 09:27

Still wondering what constitutes a "quality" tourist. Suspect the average SWM "tourist" adds more to Phuket's economy in a couple of weeks than the so called "quality" tourists....?

Posted by david on August 23, 2014 09:49

While there are no doubt many unethical practices designed to fleece unwary tourists.
On the positive side most of the tourist's bucks tend to go directly back into Phuket's and the Thai economy supporting local business whatever they may be,whereas major foreign owned resorts have an obligation to corporate headquarters and shareholders to "export" funds.
Perhaps a government monetary policy that $ limits transfer of funds overseas?

Posted by david on August 23, 2014 10:56

I was laughing when I red that Phuket sets its own standards! Financial standards for the pockets of influencial thai people?? How to attract quality tourists to visit low quality Island of Phuket? It start on your arrival in airport! Immigration, 2 hours in a row, unles you take a fast lane and pay money under the table. Than transport, lucky to arrive safe in your hotel after a ride with a kamikaze driver, or in a bus without brake failures on Patong hill. Lets not talking about Patong. Who wants to walk in 50 cm deep water after a bit of rain, seeing the rats swimming? Get 'quality' skin diseases by contagious sewage water around your legs. No neat pavements to walk. Overcharged for everything. Keep dreaming, making things more expensive? Than first upgrade present low quality Phuket to a better Phuket. Make immigration works like it works in Bangkok. Make transport as it works in Bangkok. Clean up the phuket police force.

Posted by Kurt on August 23, 2014 14:08

Unfashionable airport? Check!

Jam-packed Immigration? Check!

Unpleasant discusses with unfriendly speading taxi driver with lousy driver skills? Check!

Annoying touts in the streets? Check!

Overcharging and cheating are the rule not the exception? Check!

Dirty beach, dirty sea, noisy jet skis?
Check!

Waste water problem, power cuts, internet from the last century? Check!

No public transport? Check!

Trash all over the island, dirty and dusty roads, constraction sites every corner? Check!

Hordes of tourists with no style, no fashion, no manners, no upbringing and no education? Check!

Yeah, lets do some price regulation to attract more quality tourists (what ever it is)!

Posted by Georg The Viking on August 23, 2014 17:38

I have to say I see this as putting the cart before the ass. Quality (moneyed) tourists visit quality destinations, such as Laguna. Raising the prices in the ratnest that Patong is will just empty Patong. The place is what it is, recently a repeatedly flooded ratnest, and unless that changes it will only serve to attract bottom end visitors, like myself. I am actually rather well off but prefer the seedy atmosphere and floods ....

Posted by geoff on August 27, 2014 09:24

@Geoff

agree, Laguna is a quality destination

sometimes you have to leave your luxury resort and from this point on it is finished with high quality.
Even within the Laguna area.

Posted by Georg The Viking on August 27, 2014 10:06