Phuket engine spins along. Source markets into Phuket maybe less diverse but volumes growing, February showed highest ever arrivals month for the island. Group composition has shifted, group hotel rates have grown faster than other segments, showing the continued shift in what kind of group travel now visit Phuket.
Factors keep moving business fwd include:
- Air lift continues to grow (incl upcoming new direct flight from Riyadh), upgrades for 6b baht still scheduled, would enable airport to accommodate 18m passengers/year. Stark contrast to Vietnam setup mentioned yesterday
- Phuket has over a long time shown a sharp capacity to increase hotel rates, when possible, e.g. during compression periods.
- Increased pressure of rising cost in past few years, but we see more hotel operators able to manage productivity, enabling rising margins
- Tourism engine keeps running. Given infrastructure challenges & future uncertainty re sustainability and logistics, Phuket is perhaps more a diesel engine than electric? Stable & reliable - but without policy shifts, it's hard to see it running forever.
Great to see clients benefitting from updated STR CoStar product & our data shows solid 12mts for many hotels up until Mar '25, and even if owners will ask for more or at least cont'd similar growth, next year should see more muted pace. Could be more rate growth ahead, most likely more in high-end hotels. For demand, the party recently (and literally) is about Patong, where business on the books is strong, +6% growth over same time last year for 30 days from mid-March - where rest of island has much more softer demand ahead.
Phuket headlines will always pop up & even current challenge with scam centers in northern TH would have more impact than usd9 tourism tax, we've seen over decades that the island can progress through the noise.
Eric Ricaurte showed valuable operational and actionable guidance that directly can save cost and impact ROI on investing in and operating lodging sustainably.
Bill Barnett, while highlighting just how much the airport has meant for the industry, also brought up that there are 16,000+ planned new residential units in Cherngtalay, a huge number when you consider what's already in place and there are building cranes all over the area.
Hotel supply? Paced picked up a bit recently, but not extreme.
Don't forget: 1st & largest hotel sustainability conference PHIST is scheduled for Sep 1 - reach out to Phuket Hotels Association to participate!
Phuket keeps rolling, even if it's easy to see uncertainty in the cracks of stability, not every month is made of gold ahead, and Q2 could see winners and laggards in growth pace.
Thank you Phuket Hotels Association Jayne MacDougall Bill Barnett C9 Hotelworks Bjorn Courage Eric Ricaurte Sumitha (Sumi) Soorian and all members for this very progressive hotel association.
Finally & importantly, stellar advice that will only make sense if you attended yesterday's session: "Don't die". 🤪