Phuket’s wake-up call. The hard work starts here.

[webfact]

Phuket’s wake-up call. The hard work starts here.

By Tim Newton

 

 

OPINION

 

More hotels, a changing tourist mix, an exodus of expats and a decline in tourist numbers. Despite the new Tourism and Sports Minister pumping up the local tourism tyres during his visit last weekend, there’s a lot of hand-wringing and the sound of closing shop shutters around the tourist island of Phuket.

 

To make things more complicated the situation is not consistent in all areas of the tourism industry on the island. Some hotels still report good occupancy numbers although almost everyone is admitting they’re discounting rates to keep the tourist cash register ringing.

 

There are really only two conversations in Phuket.

 

1. The tourists are coming

2. The tourists aren’t coming

 

Everyone has an opinion and there is broad, but mostly unfounded, suspicion in the TAT’s statistics. Keyboard warriors continue to believe their own opinion and what supports their narrative no matter how many facts anyone throws at them.

 

There is a sense of mild panic but most of it is unwarranted, in the long-term.

 

Statistically, and historically, things really aren’t THAT bad. In a worst case scenario – say the tourism arrivals were really down 30% – then we’re back to tourism numbers of 2016 when things were considered OK. 2016’s tourism numbers were more than four times the numbers of a decade before. So the flight numbers and passenger arrivals have been, generally, on the up and up for two decades. It’s been a good run and the island has morphed from a tropical destination into more of a tourism business hub with a lot of investment and new money being spent in Phuket.

 

Away from tourism there’s also an anecdotal decline in expats living on the island, particularly in the English-speaking nationalities from UK, Australia, America and South Africa. Speaking to a number of Embassies and Honorary Consulates in the past week they’ve shared their feeling that the numbers have been declining without providing specific figures.

 

Any hard times in the tourism industry impacts everyone on the island – it’s a holiday island and has little to fall back on in the way of other industry or manufacturing. There will be fewer jobs for expats, locals and the people that have moved from other parts of Thailand to enjoy the fruits of Phuket’s tourism rise.

 

Bill Barnett from c9hotelworks.com, who lives on the island and has been following tourist, airlift and hotel stats for two decades, says the drop of tourism for a few months this year is on the back of big growth in the early part of last year and the sense of ‘panic’ is largely unwarranted.

 

“Hotel and tourism remain cyclical businesses and, in looking at declines now, we have to look at first half of 2018 that was a high water marker, so the bar is raised exceptionally high.”

 

“Phuket despite being an island is being effected by a larger picture. The global Chinese slowdown is not just about the boat sinking but the US-China trade war and the slowing Chinese econonic picture will impact the entire world – we are just one piece of a much larger picture. Nothing grows in straight lines and what is encouraging about Phuket longer term is geography, airlift and the broad tourism product. Every road has bumps in it and we are hitting some this year.”

 

“But more than 15,000 new keys (hotel rooms) will come on the market within the next five years. The surge in room numbers is not only hurting the revenue of hotel operators but also causing damage to natural resources.”

 

Meanwhile an anonymous, prominent Phuket hotelier, who writes articles about the island’s hotel industry for The Thaiger, says that the signs are quite good for the coming months.

 

“It has been very positive to hear that from mid-August and especially September figures are now moving nicely with a good pick up of reservations currently on hand. For example, our resorts are now already showing ‘on the books’ figures higher than we ‘closed’ the month of September in 2018 which is very encouraging to see.”

 

“Some of our Chinese partners have been asking for more rooms as their holiday season starts which is very positive and more traditional ‘low season’ tour operators’ supporters too.” 

 

But even the Thai Hotels Association note that the numbers weren’t good for Q2 this year following a reasonably good New Year and Chinese New Year.

“Average room rates for the first six months this year dropped 5% compared with the same period last year.”

 

“From April to June, the rates slid further by 8%, worse than expected as the Songkran holidays did not bring a respite to the province.”

 

 

But the situation is sure to remain ‘lumpy’ with a continual evolution in the tourism demographic, much of it more to do with world trends and global economics more than what individual businesses or even the TAT can do to drive extra tourist arrivals.

 

For now it is up to local businesses to stop assuming the tourists are just magically going to turn up and be pro-active in promoting their businesses. Checking your instagram posts and your Facebook feed, sitting behind the counter, isn’t going to help the situation.

 

When the going gets tough, the tough have to get going, or shut up shop. The slight drop in tourism in Q2 deserves justifiable concern but business owners, tour operators, island and tourism officials need to accept and embrace the changes.

 

So too, the ingrained locals hunkered around Fort Bangla Road who still think all the tourists need are expensive drinks and girlie shows. That this hub, and a lot of Patong, is having a difficult year should come as no surprise as the rest of Phuket has blossomed in the past decade providing a lot of competition for the party town and are chasing the 2019 tourist, not the ones from 1990.

 

There are few islands with such good beaches, reasonably good infrastructure, excellent hotels and tourist options as Phuket, in the region. And the island connects to Krabi, Phang Nga, Khao Lak and Krabi – all with growing infrastructure and potential.

 

Phuket will continue to thrive, mostly through the stubborn resolve of the people that live here and rely on the island’s success for an income.

 

This year’s ‘bumps’ have been a wake up call that the tourists, and expats, won’t keep coming by waiting at the doorway or praying at the temple. The hard work starts now.

 

 

Source: https://thethaiger.com/hot-news/tourism/phukets-wake-up-call-the-hard-work-starts-here

 

 

-- © Copyright The Thaiger 2019-08-07

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[mok199]

Protect the natural beauty and Phuket will always have a future...Its not all about shopping malls, TAT stats and pleasing the budget tour groups..

Edited August 6, 2019 by mok199

[ChipButty]

22 minutes ago, mok199 said:

Protect the natural beauty and Phuket will always have a future...Its not all about shopping malls, TAT stats and pleasing the budget tour groups..

Phukets becoming like a concrete jungle

[Bluespunk]

2 hours ago, webfact said:

There are really only two conversations in Phuket.

 

1. The tourists are coming

2. The tourists aren’t coming

Isn’t that really the same conversation with opposing views. 

[KittenKong]

3 hours ago, webfact said:

There are really only two conversations in Phuket.

 

1. The tourists are coming

2. The tourists aren’t coming

3. The tourists have gone.

 

I'm in the last group. Seen it once, wont go back. Overdeveloped and overpriced.

[beechbum]

"15000 more rooms over 5 years"

They're thinking exactly as they have been for years, build lots and lots more, who cares about the dwindling almost all gone natural beauty let alone the natural resources and as for a little things like water...pfftt...who needs that stuff!!

[OneMoreFarang]

I was the first time in Phuket in 1994, after two weeks on Koh Samui. Phuket was already a rip-off at that time. And then I was there maybe 20 years later and it was a bigger rip-off. I won't go there again.

[PatOngo]

1 hour ago, mok199 said:

Protect the natural beauty and Phuket will always have a future...Its not all about shopping malls, TAT stats and pleasing the budget tour groups..

Oh! Really?

[Is this real]

A typical "Puff Piece" from The Thaiger.  It does what it is told.

 

Want proof of a major decline?  Ask yourself this.

 

A few years ago during high season, all of the main west coast beaches had beach vendors everywhere and were covered with thousands of chairs and umbrellas.  Now, very few.  Where are all these people? 

 

They aren't in Phuket, anymore.  High season was November to Songkran.  Business' were filled.  Now, the high season is mid December to mid January, and, not sold out.

 

Any questions?

[RotBenz8888]

Nobody I know would want to go to Phuket again, in fact, it would be embarrassing. With so many other travel options, why on earth choose Phuket?

[Emdog]

"There is a sense of mild panic but most of it is unwarranted, in the long-term."

Business professor I had way back when said something that stuck with me regarding long term, short term planning:

"In the long run, we're all dead"

[Olmate]

7 minutes ago, Is this real said:

A typical "Puff Piece" from The Thaiger.  It does what it is told.

 

Want proof of a major decline?  Ask yourself this.

 

A few years ago during high season, all of the main west coast beaches had beach vendors everywhere and were covered with thousands of chairs and umbrellas.  Now, very few.  Where are all these people? 

 

They aren't in Phuket, anymore.  High season was November to Songkran.  Business' were filled.  Now, the high season is mid December to mid January, and, not sold out.

 

Any questions?

Beach chairs reductions were mandated ,there goes your main point straight up sunshine!

[Bluespunk]

58 minutes ago, KittenKong said:

3. The tourists have gone.

 

I'm in the last group. Seen it once, wont go back. Overdeveloped and overpriced.

We used to go for the boys weekend tour at some point during the last few weeks of the summer term at school.

 

Stopped doing so five or six years ago for the reasons you state.

 

It just stopped being fun there and didn’t justify the trip from Bangkok. 

[Lucius verus]

Thailands success has always been its ability to bring people back again and again particularly Pattaya/hua hin.

I don't think that allure exists anymore. Thai resorts are overdeveloped ,expensive,polluted and tired looking.

Too many other new destinations coming on line not to mention Myanamar which will eventually open up its hundreds of islands  to tourists.

[simon43]

I can believe that overall tourist numbers have not declined, due to the influx of Asian tourists.  

 

What has declined, and I know this from checking the stats over the past 5 years for my ex's hotel, is that the average hotel room rate charged has fallen year on year.

 

A guest room that she used to sell for 1,500 baht a night now sells for 750 baht, because not only are Asian guests unwilling to pay 1,500 baht, the number of competitor hotels and guesthouses has hugely increased.  Many of these are unlicenced and do not pay the required taxes either, thereby creating unfair financial advantage.

 

It is a race to the bottom, nothing less.

[Oliver Holzerfilled]

1 hour ago, Emdog said:

"There is a sense of mild panic but most of it is unwarranted, in the long-term."

Business professor I had way back when said something that stuck with me regarding long term, short term planning:

"In the long run, we're all dead"

Your business professor cribbed it from John Maynard Keynes.

[VocalNeal]

5 hours ago, webfact said:

there’s a lot of hand-wringing and the sound of closing shop shutters around the tourist island of Phuket.

 

...and the rest of Thailand.

[MRToMRT]

28 minutes ago, simon43 said:

 

A guest room that she used to sell for 1,500 baht a night now sells for 750 baht, because not only are Asian guests unwilling to pay 1,500 baht, the number of competitor hotels and guesthouses has hugely increased.  .....

It is a race to the bottom, nothing less.

Thats interesting Simon, which province or specifically Phuket? My own general experience (I don't travel too Phuket anymore) as an independent traveller (with own transport and traveling almost every week) has been that those places I used to stay at for 500 baht now charge 1200-1800 baht. The exception being the southern provinces (esp east) where I can still get excellent quality motels for 500-600 baht.

 

Edit: Sorry I did not realize this was specifically the Phuket forum, my comments are about Thailand in general

Edited August 7, 2019 by MRToMRT
correction

[Old Croc]

Always amusing reading the typical one liners from expats from other parts of Thailand. The " I went there once, it was too expensive and I got ripped off. It's a shithole, I wont go back."  I get especially amused at the whining complaints from people who chose to live in the crowded, polluted, grid locked capital city!

 

These detractors compare tourist prices at a beachfront restaurant, at one of the world's most visited places, with the price of a bowl of rice at their local 7-11 in the wilds of the north!  Despite many proudly espousing their professions as an ajarn at a local school, they lack the basic understanding that prices reflect the popularity of a place, and that perhaps their readies aren't going to cut it when that place is the tourist side of Phuket.

They also constantly fail to recognize that living as an expat away from Phuket's tourist centers is only slightly more costly than living elsewhere in the country. There are still deserted beaches to sit on, and jungle hideaways where one can live separate from the crowds. The advantage is that, when desired, you have access to some of the best beaches, Islands, facilities (international hospitals and airport) and clean air in Thailand, indeed the world.  You decide on the lifestyle you want to have -  quiet, isolated, hedonistic, adventuresome or sporting such as diving, sailing, fishing, bike riding, etc.

Yes, Phuket has problems. Greed, unfettered development and the inevitable transport and traffic problems have grown expeditiously with the influx of tourists. That should be a matter of great shame to those responsible for this lack of control and planning. Governments in Bangkok, local Phuket Government, mayors, hotel and transport cartels, and the big families that run/own most of the Island have combined to line their pockets in the short term, to the detriment of long term potential.

 

 

 

[Psimbo]

2 hours ago, KittenKong said:

3. The tourists have gone.

 

I'm in the last group. Seen it once, wont go back. Overdeveloped and overpriced.

Yet you live in Jomtien! How quaint.

[Psimbo]

2 hours ago, OneMoreFarang said:

I was the first time in Phuket in 1994, after two weeks on Koh Samui. Phuket was already a rip-off at that time. And then I was there maybe 20 years later and it was a bigger rip-off. I won't go there again.

Sort of how I feel about Bangkok. Get outside Patong and the perceived rip-off mentality is not noticable.

[Old Croc]

17 minutes ago, MRToMRT said:

 

Edit: Sorry I did not realize this was specifically the Phuket forum, my comments are about Thailand in general

The title of the thread should have been another clue.

[MRToMRT]

7 minutes ago, Old Croc said:

Always amusing reading the typical one liners from expats from other parts of Thailand. The " I went there once, it was too expensive and I got ripped off. It's a shithole, I wont go back."  I get especially amused at the whining complaints from people who chose to live in the crowded, polluted, grid locked capital city!

 

These detractors compare tourist prices at a beachfront restaurant, at one of the world's most visited places, with the price of a bowl of rice at their local 7-11 in the wilds of the north!  Despite many proudly espousing their professions as an ajarn at a local school, they lack the basic understanding that prices reflect the popularity of a place, and that perhaps their readies aren't going to cut it when that place is the tourist side of Phuket.

They also constantly fail to recognize that living as an expat away from Phuket's tourist centers is only slightly more costly than living elsewhere in the country. There are still deserted beaches to sit on, and jungle hideaways where one can live separate from the crowds. The advantage is that, when desired, you have access to some of the best beaches, Islands, facilities (international hospitals and airport) and clean air in Thailand, indeed the world.  You decide on the lifestyle you want to have -  quiet, isolated, hedonistic, adventuresome or sporting such as diving, sailing, fishing, bike riding, etc.

Yes, Phuket has problems. Greed, unfettered development and the inevitable transport and traffic problems have grown expeditiously with the influx of tourists. That should be a matter of great shame to those responsible for this lack of control and planning. Governments in Bangkok, local Phuket Government, mayors, hotel and transport cartels, and the big families that run/own most of the Island have combined to line their pockets in the short term, to the detriment of long term potential.

 

 

 

I don't disagree with you (my base is in a fetid city I admit) but the thread is about tourism, so the opinion of someone who does not live in Phuket and just visits as a tourist may be especially relevant to the subject matter.

[madmen]

49 minutes ago, simon43 said:

I can believe that overall tourist numbers have not declined, due to the influx of Asian tourists.  

 

What has declined, and I know this from checking the stats over the past 5 years for my ex's hotel, is that the average hotel room rate charged has fallen year on year.

 

A guest room that she used to sell for 1,500 baht a night now sells for 750 baht, because not only are Asian guests unwilling to pay 1,500 baht, the number of competitor hotels and guesthouses has hugely increased.  Many of these are unlicenced and do not pay the required taxes either, thereby creating unfair financial advantage.

 

It is a race to the bottom, nothing less.

what's the name of the hotel and where is it located? sound's like a good deal

[Joe Mcseismic]

One of the problems, which I haven't seen mentioned is the very strong land ownership laws and weak zoning laws.

You really can't mandate what a person does with their own land. You cannot forbid them to build a hotel. You can't forbid them to excavate and sell the earth for fill, or stop them making a pig farm.

It is this lack of legal legislature, the lack of enforcement and the ease of bribing public officials which is turning this island into a concrete jungle. A good example is all the houses built relatively recently above the 80 metre contour.

[Old Croc]

12 minutes ago, MRToMRT said:

I don't disagree with you (my base is in a fetid city I admit) but the thread is about tourism, so the opinion of someone who does not live in Phuket and just visits as a tourist may be especially relevant to the subject matter.

Yes, good point.

Reasonable, informed comment, including negative reviews, are always welcome by myself and I'm sure others here.

 

However, there are a large group of Phuket haters on this forum who post on virtually any thread about the Island. They rarely give good reasons for their strong dislike of the place instead just use insulting language in their one liners. It is usually quite evident that this strong emotion is more about their personal financials (lack of) than as a valuable critique. Details about their failed visits are scarce

I am often mystified as to why they feel the need to constantly attack one Province in this manner rather than just getting on with their lives wherever. I get some limited entertainment from calling them out, and will continue to do so when inclined.

 

Fetid city? 

[spidermike007]

My first trip to Phuket was in 1976. There were only a few bungalow complexes on the west coast, all at $3 a night. A few scattered restaurants, all thatch hut style. Delightful. Quiet. Not much to do. Beachfront land cost 1,000 baht per rai. They could not give it away. Came back in 1986. A lot more developed, but still ok. Some hotels here and there. Some nightlife. Came back in 1993, and it was unrecognizable. But, the nightlife was amazing. In all of my subsequent trips there, it seems to have gone downhill. Way too overdeveloped, and nightlife was good up until around ten years ago, then it seemed to start to decline. Now, the place is horrendous. If you find some isolated coastal spots, north of the airport, it can be beautiful, as the Andaman is amazing. But most of the island is a blight zone, terribly overpriced, filled with undesirable tourists, and just not offering much of interest, on any level.

 

Sure, they can increase tourism. But, the big spending Western tourists are gone for good, and the wealthy Chinese and Indians avoid Thailand, for a dozen good reasons. 

 

Thailand has shot itself in the foot too many times, and is now crippled, in terms of tourism. There is no coming back from this. The damage has been done. 

[LivinLOS]

1 hour ago, Psimbo said:

Sort of how I feel about Bangkok. Get outside Patong and the perceived rip-off mentality is not noticable.

Your joking surely.. 

[thaibeachlovers]

6 hours ago, webfact said:

But more than 15,000 new keys (hotel rooms) will come on the market within the next five years.

Sounds good for those wishing to live there, as rooms will be way cheap.

 

Phuket went down at a great rate in the late 90s, when I voted with my feet to never go back.

I did go back after the tsunami, only to be horrified that they were rebuilding the same <deleted> <deleted> that had been there before.

I guess making it better wasn't an option.

 

I never went back after that and apparently the word has got out. The internet is of some use, apparently.

 

Best thing that could happen to Patong is a very large bulldozer, and a blank slate to start again, but better.

 

[Grusa]

1 hour ago, Old Croc said:

Yes, Phuket has problems. Greed, unfettered development and the inevitable transport and traffic problems have grown expeditiously with the influx of tourists. That should be a matter of great shame to those responsible for this lack of control and planning. Governments in Bangkok, local Phuket Government, mayors, hotel and transport cartels, and the big families that run/own most of the Island have combined to line their pockets in the short term, to the detriment of long term potential.

 

Expeditiously?   No:-  Slowly, painfully and injudiciously I think.

Perhaps you mean exponentially?