Phuket’s tourism industry has been on a road to recovery, following a
year of pandemic-induced disruptions. A newly released Phuket Hotel
Market Update by C9 Hotelworks reveals that the island’s tourism
industry has experienced a significant uptick in activity, with the
recovery starting in Q4 of last year.
Russian and regional visitors drive growth
The data shows that the post-pandemic tourism recovery has been led
by a surge in Russian travellers in the high season. However, it was
regional visitors from India, Malaysia, and Singapore that set the stage
for the recovery in Q4 of last year. The lifting of travel restrictions
by Thailand at the beginning of October 2022 led to a surge of tourists
that propelled the market-wide occupancy for the year to 48%, up
year-on-year from the pandemic impacted low of 8% in 2021.
The surge of tourists resulted in a year-end market-wide occupancy rate of 48%, which was a significant improvement from the pandemic-affected low of 8% in 2021. Photo Credit: C9 Hotelworks
The Phuket tourism industry has seen a significant influx of Russian
visitors in recent months, despite limited direct airlift due to
economic sanctions by the EU and airfares that have in many cases risen
While the number of visitors was sharply down compared to the nearly
one million count in 2019, stays increased from a normal average of 11
days and rose by over 50%. The arrival of tourists from Russia not only
created a spark in economic recovery for hotel and tourism businesses
but radiated into retail, transportation, and real estate.
Phuket's property market goes boom
The segment is now the most active direct foreign investment (FDI)
leader in Phuket’s booming property market. A knock-on effect has also
been seen on land prices across the island, which are growing at their
highest rates in over two decades.
C9’s research points to a broader overall movement of hotel owners
converting from management agreements to franchises and also changes in
brands. The conversion is a sign of maturity for Thai hotel owners who
are experienced enough to operate but look for distribution and brand
value in a franchise scenario.
C9's Bill Barnett said the arrival of Russian tourists not only stimulated economic recovery in the hotel and tourism sectors but also had a positive impact on retail, transportation, and real estate industries. Photo Credit: C9 Hotelworks
Bill Barnett, C9 Hotelworks managing director, commented, “We expect
to see more changes in brands for the remainder of 2023 and beyond,
given many hotel agreements signed in the early millennium tourism boom
years are set to expire.”
Looking beyond the traffic
Despite positive economic indicators, the reality on the ground is
evident everywhere in the stress placed on Phuket’s transportation
infrastructure. Population growth, development spread to inland areas,
and skyrocketing tourism demand have created a massive traffic problem.
The clearest example was when a landslide closed an important
thoroughfare between the popular Patong tourist area and its central
island feeder road. Delays in repairs caused a domino effect in access
to west coast hotels in peak season and demonstrated how fragile the
island’s transportation network is.
Reflecting on the potential return of mass tourism to Phuket, Barnett
said, “The lack of a dedicated tourism master plan for the island is a
key long-term issue that much is resolved. With airport flights and
passenger flow mounting, we can clearly see how important the new Phang
Nga airport is, though the site remains inactive.
"This goes for the expressway and Patong tunnel projects that are in
essence a lifeline for the island’s future growth. We punched the card
of urbanisation already, and with nearly 100,000 registered hotel rooms
on the island, we’ve gone too far to go back.”