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Build it and they will come: How Thailand’s great infrastructure leap is reshaping tourism

PHUKET: Thailand’s great push forward on mega-transportation projects is seeing strong dividends being paid in its tourism industry, reports Bill Barnett, founder and Managing Director of hotel industry expert consultancy C9 Hotelworks.

By The Phuket News

Wednesday 30 May 2018, 11:13AM

One key example is Phuket, where passenger arrivals grew by nearly 19% in the first four month of the year at the newly upgraded and expanded Phuket International Airport, Mr Barnett notes.

“Why Phuket? One only has to look at the upward trajectory of low-cost carriers (LCC’s) and supercharged airlift. Underpinning the remarkable growth story is the exponential rise of Mainland China, which registered a 50% year-on-year increase, followed closely by Russia at 47%.

“By year-end, a record high 9.7 million passenger arrivals are expected to pass through the airport,” he added.

Direct flights to Phuket this year as of May has witnessed 23 new routes introduced to the destination with 19 being from Mainland China according to C9 Hotelworks’ latest market research. Currently there are 33 cities in China that link to the destination, door to door.

“A defined shift in geographic source markets over the past ten years has experienced rising demand for non-beach centric activities. With the strong purchasing power of tourists, especially Chinese, Russians and Australians, more retail and tourism attractions are developing on the island,” Mr Barnett explained.

“The changing mix of visitors is reflected in the island’s hotel performance with leading hotel data benchmarking group STR reporting that in 2018 upper midscale hotels have shown the highest demand growth of 10% compared to the same period last year,” he added.

“Phuket is gradually transforming to a more urbanised holiday destination rather than a pure beach getaway. Resort-oriented retail is a rising force, with our data showing nearly 200,000 square meters of Grade A net lettable area in the pipeline,” he adds.

“Another spin-off of the tourism numbers is a series of impressive upcoming themed tourism attractions including Vana Nava Water Park, Blue Tree Water and Entertainment Park and Aquaria at the new Central Festival mall extension. The powerful mix of retail and tourism is most evident in the island growth belt from Kathu to an ever-expanding Patong.”

Citing the “Phuket Hotel Market Update May 2018” report by C9 Hotelworks, Mr Barnett points out that Phuket presently has a total of 1,744 tourist accommodation establishments with 84,427 keys as of Q1 2018, which includes both registered and unregistered properties.

The report notes there are 36 new hotels in pipeline with 27 properties affiliated with international hotel brands. In addition, with the intention to attract real estate buyers, 10 upcoming mixed-use properties will a have hotel residences component, which accounts for 28% of total incoming supply.

Summing up Phuket’s pathway to sustainable growth. Mr Barnett says, “The announcement that the AoT (Airports of Thailand) is set to invest an estimated US$1.8 billion (B57.87bn) in a second airport just over the Sarasin Bridge in Phang Nga bodes well for fundamentals.

“Creating a broader Greater Phuket Tourism Triangle that includes Phang Nga Bay and the prime west coast beach strip from Natai to Thai Muang on the mainland will bring more diversity and refresh the island’s maturing global appeal.”

To download the full “Phuket Hotel Market Update May 2018” report by C9 Hotelworks, click here.



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Winfield | 05 June 2018 - 21:31:27

The hotel named "Oceanfront Kalim" I assume is the monstrosity 50 meters past the White Box restaurant on the beach rd, has been under construction for 8 years..... yes 8 years. (at least) and is not even close to completion. There is no chance of it being open in early 2019. Vested interests of the stories author indeed.

Winfield | 05 June 2018 - 21:18:41

The list of hotels coming on line is outdated or just incorrect. For starters, the Hilton Phuket Patong Resort has completely stopped construction. Site cleared out incl. project office and workers camp. Zero activity. They started digging up the mountain in 2014, forecast to open in early 2018. So far all that has been built is 1 retaining wall, and it looks like the project has been abandoned.

Winfield | 05 June 2018 - 21:10:33

The same expert Mr Barnett wrote an article a year ago about how quote:  "more is less", referring to the increase in tourism that is not bringing with it an increase in revenue to Phuket's local businesses, due to the all inclusive package tours of cheap Chinese Tourists who dont spend any money when they are here.

Rorri_2 | 31 May 2018 - 12:26:29

"It is clear commentators haven't read the article properly, given ill founded incomprehensible comments," you could be right, but why tell the world you have a problem comprehending.

Jor12 | 30 May 2018 - 20:47:51

It is clear commentators haven't read the article properly, given ill founded incomprehensible comments.

Pauly44 | 30 May 2018 - 17:51:37

The same from this guy year in year out as he has vested interests but its not a balanced independent assessment of the real picture which is tourist quality has decreased significantly, increased volume is infact detrimental to a small place like Phuket as the BASIC infrastructure is not up to par to facilitate such numbers Phuket is on a slippery slope but these property guys always say otherwis

Kurt | 30 May 2018 - 17:50:18

Mega transport systems? Is this story a thai opera script?
Phuket Government Officials are to weak, not equipped until now, medio 2018, not even able to establish a normal safe non-smart public transportation system all over this simple Island. When?
Just a normal public bus system, simple and not needed smart.
Copy Singapore.
A request to much for Phuket government desk sitters.

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