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Phuket hotels enjoy good times

September 17, 2012

A room oversupply is still not a critical issue for Phuket. What worries some tourism executives is the rapid growth of tourism that looks dangerously like a runaway train heading for disaster.

Commenting on the state of the island’s tourism Phuket Tourism Association vice president, Bhuritt Maswongsa told TTR Weekly that Phuket’s hotel business was  robust, despite a slight drop in average room rates due to  changing patterns in tourism to  Phuket.

“Phuket does not have a rooms oversupply like in other tourist towns in Thailand,” said Mr Bhuritt. “The slight drop in room rates  can be explained by shifting tourist supply from European market like Germany and Scandinavia to China, Russia, South Korea and Australia,” he added.

New investments in Phuket’s hotels will be difficult in the future due to the high cost of beach properties that make it less feasible to build hotels.

“There are excessive land costs and a return on investment is almost impossible.”

He calls for very serious application of the law and regulations on new developments to end relentless expansion much of it without a master plan.

Roughly, Phuket has around 60,000 rooms, but the official registered figure from the Tourism Authority of Thailand in Phuket is 745 hotels with 47,333 rooms. That does not take into account hundreds of non-registered resorts, long-stay apartments and house rentals.

Average room rates fluctuate from a high season from Bt4,000 to Bt6,000  to as low as Bt1,000 to Bt4,000 in the rainy season.

Last year, Phuket closed the year with 80% occupancy, but Mr Bhuritt estimates that occupancy might drop 5% due to the impact of natural disasters particularly the floods around Bangkok last year that cut into travel spending power in the domestic market.

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