A mid-year slump in arrivals to Thailand's leading resort market's of Phuket and Koh Samui has jolted hotel trading levels;
The respected market research further states that in the aftermath of Thailand's political crisis, which saw martial law and a nationwide curfew imposed in May, the resort island of Phuket experienced a sharp drop in visitor arrivals.
This peaked in the month of June when combined international and domestic passenger arrivals dropped by 14% year-on-year.
In the country's premier tourism destination Phuket, there has been a gradual easing of the negative trend in July and August, though compared to the same period in 2013 the market has continued to experience contraction.
Chinese and Russian travelers remain key sources of business in the first half of 2104, accounting for 41% of international arrivals, rising 6% and 14% y-o-y, respectively.
During the first half year of 2014 room night demand retracted to 72% and room rates decelerated, leveling off at US$159 compared to the same period in 2013.
Passenger arrivals at Phuket International Airport in H1 2014 maintained a positive 10-year CAGR growth of 13% between 2004 to 2014 and five-year growth of 8%.
C9 Hotelworks Managing Director Bill Barnett (right), said: "Phuket is expected to benefit however from an extensive government-led ocean front clean up of illegal structures and an anti-corruption campaign which has resulted in a remarkable clearing of the island's beaches.
However there are mounting concerns about over-leveraging of emerging mass tourism segments with potential risk from the Ukraine political crisis and rise of global oil prices which will impact price-sensitive tour business."
While in Koh Samui, market-wide hotel occupancy for January through June achieved 70% with an average rate of US$162. One decided change for Koh Samui has been the growing influence of the Russian market which now tops the international arrivals list with a share12.3% of visitors.
Phuket's beaches have experienced a remarkable clean sweep over the past few months by the government which has restored much of the island's natural beauty.
On the infrastructure front, after the opening of the Central Festival retail complex, a new 4,000 square meter community mall developed by the Platinum Group is scheduled to open in December. Direct foreign investment in the island's hospitality sector is moving forward, highlighted by Malaysia's YTL conglomerate.
Phuket Chart 1.
Phuket Chart 2.
C9's forecast for both markets based on feedback from hoteliers is they expect static growth for the full year as demand expected to return H2, while in 2015 they are looking at budgeting similar figures which they had previously anticipated when preparing growth-oriented 2014 budgets.
That said, Bill Barnett was quick to say "there continues to be a clear and present danger about an over-reliance in Thailand's resort markets of mono segmentation, after playing to a one-trick pony is never a sustainable long term strategy."
Download the reports here: Phuket Hotel Market Mid Year 2014 and Samui Hotel Market Mid Year 2014
Bill Barnett is the Founder and Managing Director of C9 Hotelworks, who are a leading consulting firm specializing in hotels, tourism and property development in Asia Pacific. C9 assists developers, private equity and financial institutions, and investors in providing market research, feasibility studies, hotel operator negotiations, asset management and transaction/due diligence support. From their base of operations in Thailand the group is considered a leading regional player in market intelligence, and publish regular industry updates. With over 28 years experience in Asia, Bill has held executive roles with a series of leading international hotel management firms and publicly listed companies. He was awarded a prestigious PATA Gold Award in 2007 and is a member of the ISHC (International Society of Hospitality Consultants). Bill's popular online new site www.thephuketinsider.com is widely regarded as a significant industry resource and his byline appears in a number of newspaper and magazine articles throughout Asia. For more information contact www.c9hotelworks.com