NEWS

Phuket, the jewel of Thailand’s tourism industry, is on the brink of a remarkable resurgence. The island’s journey to recovery, marked by robust numbers in Q4 of the previous year, is poised to set the stage for a tourism renaissance by the end of 2023. As the COVID-19 entry restrictions were lifted on October 1, 2022, Phuket experienced a profound tourism surge, with passenger arrivals soaring to 3.9 million in 2022, up from 1 million in 2021 and 2.5 million in 2020. While 2022 figures were impacted by global events like the Russia-Ukraine conflict and closed borders in China, an analysis by C9 Hotelworks points to a cyclically upward trajectory in the coming years.

Flight Arrivals and Hotel Occupancy

Island-wide flight arrivals in FY2022 surged by an impressive 210% year-on-year. This surge in international flight arrivals was mirrored by an equally remarkable rise in hotel occupancy rates. In FY2022, hotel occupancy averaged 48%, compared to a mere 8% in FY2021 when the industry primarily relied on the domestic sector. The market-wide average room rate also witnessed a remarkable 80% year-on-year increase, reaching THB3,942.

Changing Travel Patterns

Phuket’s resurgence was further fueled by evolving source markets. India, Singapore, and Malaysia surged into the top five source markets during the post-summer season, while a seasonal spike in visitors from Europe and Russia invigorated the island’s winter tourism scene. Notably, major Chinese airlines, including China Southern Airlines, China Eastern Airlines, and Air China, have resumed their operations to Phuket from key cities like Beijing, Shanghai, and Guangzhou.

Shift Towards Luxury and Upscale Hotels

The recovery narrative in Phuket has been marked by luxury and upper upscale hotels leading all tiers of market performance. This reflects a top-down market recovery, highlighting the island’s enduring appeal to discerning travelers seeking unparalleled experiences.

Future Developments and Challenges

Phuket’s journey toward becoming a premier tourist destination is not without its challenges and developments. Phuket International Airport is expanding as part of Phase II, slated for completion by 2027. This expansion aims to accommodate 1.8 million passengers annually and handle 25 flights per hour.

However, Phuket’s incoming hotel pipeline has faced setbacks due to a lack of financing from Thai lenders, resulting in many projects remaining on hold. Additionally, the industry continues to grapple with staff shortages, an issue that has persisted throughout the pandemic recovery period.

Summary

As Phuket embraces the post-pandemic era, its tourism industry is set to flourish once more. With impressive numbers and an evolving tourist landscape, the island is well on its way to regaining its status as a global tourism hotspot. The future looks promising, with expansion projects in the works and a growing influx of international visitors. However, addressing challenges such as financing and staff shortages will be crucial to ensuring a sustainable and prosperous future for Phuket’s tourism sector. The consensus among industry experts is clear: it’s not a matter of “if” the recovery will happen, but rather “how long” it will take to regain critical mass. Bill Barnett, the Managing Director of C9 Hotelworks, sums it up aptly: the outlook for the industry is one of optimism and anticipation.