PHUKET is experiencing a shorter peak season this year due to a change in the market, and it is a matter of concern for hospitality firms when it comes to the 2017 low season, according to Bill Barnett, managing director of the C9 Hotelworks consultancy firm.
He said that in previous peak seasons, rates or surcharges had benefitted many hotels in Phuket, but this year the period was becoming shorter – in most cases ending after just the first few days of January.
“Looking to Chinese New Year and the first quarter in general, trading is looking strong, but three months do not make up an entire year and low seasons are causing concern,” Barnett aded.
What is evident, however, is that other Thai beach destinations like Krabi and Khao Lak, as well as some locations in Vietnam, are honing up to take on Phuket’s destinations in an evolving tourism market, so competition “is heating up out there”, the managing director said.
According to a survey by C9 Hotelworks, there continue to be many questions on the resort-island about the impact of Thailand’s crackdown on zero-dollar tourism, as the issue affects the hospitality trade in Phuket.
Feedback on China’s cheap packages resulted in a downturn in the fourth quarter as the rapid collapse in Chinese tour series and groups forced hotels into other segments, which hit replacement rates.
Affected hotels were mainly in the mid- and upper-midscale segments – the three- and four-star categories – and group rates continue to vary wildly, the survey found.
However, that issue aside, 2017 looks brighter as the famous resort-island has a new international terminal and renovations of the domestic terminal will be completed during the course of the year, while there is also progress on other infrastructure projects, Barnett said.
Phuket is also expected to see some impressive major new developments, such as the BluPearl mega-retail project and Central’s expansion, moving ahead fast.
On the demand side, a record number of passenger arrivals, some 7.4 million, is forecast for last year at Phuket International Airport, which would be 16 per cent higher than the 2015 level.
In terms of hotel supply, the Tourism Ministry has historically reported on a regular basis on the total number of registered tourism establishments in Phuket.
However, the crackdown on zero-dollar tours and the issue of the number of unlicensed hotels has brought the matter under increasing scrutiny, with the Phuket provincial authorities having recently issued an ultimatum to hotel properties to register their businesses.
With the ministry having broadened its own data-gathering as of last month, the total number of licensed and non-licensed hotel rooms is reported to be 81,727, which is seen as being much closer to the island’s actual supply.
Barnett also said Russian visitors were back, though from a lower base.
Most hotels are seeing good numbers in all tiers, although room-rate pressure has steadily increased. January is promising by all reports, but looking further out to February and March many hotels are seeing lower pick-up compared to previous years, he added.
One interesting aspect is how Patong’s oversupply is affecting guest quality, with certain higher-end segments shifting into Kata and Karon, the MD said.
The increasing supply of budget, economy and mid-scale off-beach properties in the island’s nightlife capital is becoming a toxic mix for hoteliers, he warned.
“In 2017, we’d expect the southwest coastal hotels in Kata and Karon to improve trading and Patong to experience a possible slide in rates and demand on a broad basis. Chinese, Koreans and the Middle East segments are strong supports for the area,” he said.