Phuket facing worst tourism crisis in three decades - half of hotel rooms empty in 2020

[webfact]

Phuket facing worst tourism crisis in three decades - half of hotel rooms empty in 2020 

 

Picture: Manager Online

 

Thai media Manager painted a grim picture of tourism in Phuket in an article in which they quoted leading industry figures and analysts. 

 

They said that tourism on the holiday island needed a "big injection" - and the private sector was demanding action from the government in delivering the medicine. 

 

Expectations are that tourism in Phuket will see a 20% decline in 2020. Without government help it could be worse still. 

 

In thirty years of Phuket tourism the island had faced many challenges, they said. And pulled through. 

 

But this was the worst. Experts said that the root cause was the strong baht that showed no signs of weakening any time soon. 

 

There was also a massive oversupply of hotel accommodation. For this year it is expected that the hotel industry will see 50% occupancy if they are lucky. 

 

They think that the low season will be very low - 20% occupancy only contributing to the year round malaise. 

 

Other factors are increasing competition from neighboring countries offering environmental holidays at new destinations. For many tourists the likes of Vietnam are both cheaper and more appealing as well as new. 

 

Manager said that Phuket has enjoyed 14 million visitors annually in the past and they spend 44 billion baht a year. 

 

But all this is now under threat. 

 

Source: Manager Online

 

 

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[johng]

9 minutes ago, webfact said:

They think that the low season will be very low - 20% occupancy only contributing to the year round malaise.

I wonder, will their solution will be to raise the room prices ?       T.I.T economy 101

[Vacuum]

Don't worry, Indian millionaires are on their way.

[madmitch]

I've been saying for years that hotel nights are a much better indicator of tourism health rather than the arrival figures upon which TAT and the Tourism Ministry are always quoting.

 

 

[keith101]

11 minutes ago, webfact said:

But this was the worst. Experts said that the root cause was the strong baht that showed no signs of weakening any time soon. 

And the powers to be decided to leave the rate at 1.25% allowing the strong baht to stay where it is . Thai like to just wait instead of actually doing something positive because its in their nature to be lazy not active and this goes for my wife as well .

[chrisandsu]

As I said on another thread my brother is a first time visitor to Thailand and Phuket and he is shocked at how expensive the place is .

[darksidedog]

11 minutes ago, webfact said:

the private sector was demanding action from the government in delivering the medicine. 

The cure is going to be very painful and largely needs to come at grass roots level. The whole basis of a market economy is about supply and demand. When demand is low you need to reduce prices, especially when the local currency is strong. Of course, lowering prices is anathema to Thais, who normally just keep putting them up, thus further driving away customers. Then of course we get into the realms of the rip offs and treating your customers like dirt, none of which leads to repeat business, but a fast few baht now has always been more appealing here than taking a long term view.

[madmitch]

9 minutes ago, johng said:

I wonder, will their solution will be to raise the room prices ?       T.I.T economy 101

The hotel industry is one business that doesn't follow this particular Thai trend. They reduce prices to try and attract business. The problem is that when one hotel does it, others follow. It's good for the tourists but not so good for those in the business as occupancy rates don't improve and overall income reduces. It is going to be a tough year for accommodation providers.

Edited January 3, 2020 by madmitch

[Olmate]

2 minutes ago, chrisandsu said:

As I said on another thread my brother is a first time visitor to Thailand and Phuket and he is shocked at how expensive the place is .

Why is he shocked,didn’t,t he check prior?whats he expecting?where is he from? Maybe he is from third world!

[thasoss]

6 minutes ago, madmitch said:

I've been saying for years that hotel nights are a much better indicator of tourism health rather than the arrival figures upon which TAT and the Tourism Ministry are always quoting.

 

 

and do you think there is a trend away from hotels to villa's and air BNB,is this contributing to low occupancy in thailand's tourist spots?

 

[madmitch]

2 minutes ago, thasoss said:

and do you think there is a trend away from hotels to villa's and air BNB,is this contributing to low occupancy in thailand's tourist spots?

 

It's definitely a contributory factor, though bed numbers in such accommodation is still a small fraction of what's available in hotels and guesthouses.

[smedly]

8 minutes ago, chrisandsu said:

As I said on another thread my brother is a first time visitor to Thailand and Phuket and he is shocked at how expensive the place is .

been saying it for years - just like some areas of Pattaya they priced themselves out of the market - greed and stupidity a poor combination for a business

[Kern24]

It’s likely to be a downward spiral as the tourists that are still going will get ripped off to make up for lost revenue. .......usual logic.

[neeray]

10 minutes ago, madmitch said:

The hotel industry is one business that doesn't follow this particular Thai trend. They reduce prices to try and attract business. The problem is that when one hotel does it, others follow. It's good for the tourists but not so good for those in the business as occupancy rates don't improve and overall income reduces. It is going to be a tough year for accommodation providers.

"It's good for the tourists but not so good for those in the business as occupancy rates don't improve and overall income reduces."

I would disagree on your philosophy here. People shop around, especially in this era as it's made easy with a smart phone. All logic says that more rooms should be filled at less money. But the gross revenue should increase.

[rembody]

Would help if they could get rid of the taxi mafia, and make it more affordable to get around

[sammieuk1]

Lets just work to our strengths here some of us are very inexplicably rich nothing else matters ????

[madmitch]

Just now, neeray said:

"It's good for the tourists but not so good for those in the business as occupancy rates don't improve and overall income reduces."

I would disagree on your philosophy here. People shop around, especially in this era as it's made easy with a smart phone. All logic says that more rooms should be filled at less money. But the gross revenue should increase.

Only if the customer base increases, and there are currently no signs of that happening. The hotels are fighting for a finite number of customers and with across the board rate reductions the overall income will be down.

[chrisandsu]

21 minutes ago, Olmate said:

Why is he shocked,didn’t,t he check prior?whats he expecting?where is he from? Maybe he is from third world!

Thailand was known as the Mecca of cheap holidays . Parts  of Thailand are still reasonable Phuket is not ! He has learned and will be another non returning holiday maker  . Once bitten twice shy and all that ????

[ThreeEyedRaven]

22 minutes ago, darksidedog said:

The cure is going to be very painful and largely needs to come at grass roots level. The whole basis of a market economy is about supply and demand. When demand is low you need to reduce prices, especially when the local currency is strong. Of course, lowering prices is anathema to Thais, who normally just keep putting them up, thus further driving away customers. Then of course we get into the realms of the rip offs and treating your customers like dirt, none of which leads to repeat business, but a fast few baht now has always been more appealing here than taking a long term view.

Yep! Them there chickens have come home to roost, though the idea that it is themselves that have driven customers away will not sink in, as they will always seek to blame someone or something else.

[4MyEgo]

26 minutes ago, darksidedog said:

Of course, lowering prices is anathema to Thais, who normally just keep putting them up, thus further driving away customers.

Yes, mate of mine had a long black and a frappe juice at Coffee club for 352 baht, I said that's more expensive than in Double Bay Sydney, an affluent suburb in Sydney's eastern suburbs, he said, yep, this place has done it's dash for all the years he had been coming.

 

He did say that Bangla Road was busy in the evening though, but most people were on the street and not in the bars, hmmmm, could be that the drinks are it's too expensive....lol

[Odysseus123]

13 minutes ago, Kern24 said:

It’s likely to be a downward spiral as the tourists that are still going will get ripped off to make up for lost revenue. .......usual logic.

The problem also is that once the spiral gains momentum-it becomes virtually irreversible.

 

Folks try different destinations and,if they are worthwhile, will return there.What was good for the baby boomers may not necessarily be so for the GenXers or the Millennials.

[Sujo]

For 2 years i went to phuket for a week every 3 months. I live in malaysia and it was convenient and cheap.

 

i stopped going a couple of years ago, got sick of the taxis, cost of girls and generally ripped off with the high cost. 

 

Other places and countries get my money now.

[BwindiBoy]

47 minutes ago, webfact said:

Manager said that Phuket has enjoyed 14 million visitors annually in the past and they spend 44 billion baht a year. 

 

So they averagely spend B3,143 - I think someone needs to review their figures, or is this 14 million hotel nights?

[unamazedloso]

Its all greed. I know a lot of hotel workers that live fantastic lives travelling the world endlessly. Whos paying them? Greed killed Thailand.

[neeray]

8 minutes ago, madmitch said:

Only if the customer base increases, and there are currently no signs of that happening. The hotels are fighting for a finite number of customers and with across the board rate reductions the overall income will be down.

I still disagree with you. It's called making the best of a bad situation. Take business from the competition. Get them in on price if you have to. Them make them happy with drop-dead quality service. Repeats and referrals will abound (if Government and Immi. don't kill tourism altogether).

[SteveK]

Well who would have thought that poor customer service, high prices and awkward immigration policies would affect tourism? 

[Puchaiyank]

Offer a free oil massage with each 3 night stay.  A lady for the 1st evening with a 7 night stay...we must return to the basics of why tourists come to Phuket to begin with...

[CNXexpat]

Is the problem an decreasing number of tourists or the decreasing occupancy of hotels? If the last is the problem, a regulation of Airbnb could be a solution. It´s officially forbidden but nobody gives a sh.... Another problem are the lots of illegal/not registered hotels.

[noone223]

4 minutes ago, SteveK said:

awkward immigration policies would affect tourism? 

right? make it harder for the rich farang to stay back to back on Tourist Visas.

It's not as if Vietnam has anything to offer.

Edited January 3, 2020 by noone223

[thasoss]

34 minutes ago, madmitch said:

It's definitely a contributory factor, though bed numbers in such accommodation is still a small fraction of what's available in hotels and guesthouses.

yes for sure.....i really believe bad press, showing the worst that thailand has to offer, and new adventures in places like cambodia,vietnam are making thailand yesterday's tourist destination.And while the indians may stick around for a while,i dont believe the chinese will.