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Phuket resorts ‘still face difficulties’

November 20, 2012

Bangkok-based property company Seacon has warned that although the influx of large Chinese and Russian tourists has compensated for the fall in European visitors, Phuket resorts and hotels are not out of the woods yet.

The Renaissance Resort in Mai Khao has made weddings a speciality.

Piya Sosothikul, Executive Director of Seacon Group, which owns the Renaissance Resort in Mai Khao and has built 10 successful property developments on the island under the Erawana banner, said this week, “The total number of Phuket visitors should increase by 15 per cent this year despite the prolonged financial and economic crisis in Western Europe.

“The island is fortunate to have continued high growth rates for Russian and Chinese tourists, with arrivals for each market expected to surpass 300,000 in 2012, second only to Australians at 500,000.

“The average Phuket hotel occupancy rate should reach 70 per cent, while room rates will increase by 5 per cent, depending on the segments,” Mr Piya said.

Operators who benefitted from the growth of the Chinese market, he said, are large 3- or 4-star hotels in Phuket Town or inland from the beaches, due to their competitive pricing and also because Chinese tourists normally are more interested in sight-seeing and shopping than sunbathing or swimming.

As for Russians, he said, their preferred accommodations range from small 2-star apartments to 5-star international chain-managed resorts close to the beach. Their average stay is longer than a week.

“We are pleased with our performance both operationally and financially,” Mr Piya said.

“It has received multiple awards – including, for two consecutive years, being named the best five-star hotel in Thailand by TUI Nordic, one of the world’s largest travel agents.

“We expect our occupancy rate to reach 75 per cent, while average room rates should outperform our target due to higher individual direct bookings and strong demand for the villa product.”

However, not every hotel will enjoy the same success, he warned, because of massive growth in rooms supply.

He noted that the opening of properties such as the Holiday Inn Express in Patong, the Pullman Phuket in Nai Thon and the Regent Phuket in Cape Panwa would add some 1,500 keys in the last quarter of the year. Price competition therefore remains high, making it difficult to increase room rates.

The main immediate challenge for Phuket, he said, is solving congestion at the airport, which has to accommodate more than 20 chartered flights a day during the high season on top of regular scheduled flights.

In the medium term, he said, the Phuket MICE market would benefit greatly from a convention centre, which has been delayed for many years and was recently cancelled by the government.

There is also an urgent need for road expansion and a public mass transit system which, he said, could start with something as simple as a public bus service within Phuket, with connections to Phang Nga and Krabi, Mr Piya said.

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