During the first four months of 2019 which is ranked as high season, year-on-year international passenger arrivals at Phuket International Airport slipped by 3%, while the domestic segment was down 6%.
Looking into the data, the first half of 2018 had been a record-setting tourism period, as the succeeding six months experienced a sharp decline due to the retraction of the Mainland China market, noted a release issued by C9 Hotelworks Managing Director Bill Barnett today (July 14).
"Mainland China remains at the forefront of any discussion about Phuket and the segment remains volatile with a 19% decrease registered this year from January through May. Russian arrivals have yet to fully recover. On the upside, fast-growing India tripled its tourism arrival trajectory during the same period versus 2018," Mr Barnett wrote.
"Hotel performance has mirrored the current trend, according to STR data this reflects a 12% retraction of RevPAR, driven largely by lower market-wide occupancy.
"While May and September are the two lowest months for Phuket hotels, July and August are projected to experience boosts in occupancy. But the reality remains that non-high season attracts significantly lower room rates and this factor will undoubtedly suppress overall rate growth during the year," he added.
The C9 Hotelworks report also highlights the growing influence of hotel-branded residences on the Phuket accommodation market, with over 50% of the incoming pipeline or 8,337 units are being developed.
The majority of this products are condominium properties with many being affiliated to international hotel groups via management or franchise agreements. Despite the drop in Chinese tourists, a number of Mainland real estate conglomerates have entered the island property sector.
"Summarizing Phuket's forecasted tourism market conditions, C9 Hotelworks view is that with the development of the new Greater Phuket airport by AoT in Southern Phang Nga, the long-term forecast remains positive. It's probable that current hotel sector will experience a similar cycle that Bali saw between 2014 through 2018 and that new supply will eventually be absorbed on a medium-term basis, but in the shorter term, demand remains a key risk factor impacting operators and owners," the report comcluded.
To read and download C9 Hotelworks full report click here.