Phuket’s tourism high-season hopes shattered in policy flip-flop

[webfact]

Phuket’s tourism high-season hopes shattered in policy flip-flop

By Bill Barnett

 

 

“The time has come that Thailand must gain confidence from international benchmarks.”

 

Thailand’s leading resort island Phuket has come face-to-face with the reality that it’s tourism high-season will not see a marked reopening to overseas travellers. In the wake of the dismantling of the ‘Phuket Model’ and refocus by the government on using Bangkok as a single international gateway, there is increasing alarm over the lack of a path forward for the island’s rice bowl – tourism.

 

The key tourism indicator for the island is airlift and Phuket International Airport is the gateway for 70-80% of visitors to the destination. According to Airports of Thailand data, 121,530 passengers arrived in the month of September. This equates to just over 4,000 arrivals a day and most of these include local residents and business people. Comparing year-on-year data, 2019’s daily arrivals, which included international travellers, was five times higher.

 

Commenting on the toxic situation, hospitality consulting group C9 Hotelworks Managing Director Bill Barnett says “there is a dramatic change in the market mix where the current domestic-led average length of stay for hotels is approximately 1.8 days, while for foreign travellers it’s more than double this amount. What this means for hotels is severely reduced overall demand across the island’s entire accommodation sector.”

 

Looking forward to the high season when the numbers spike upwards in the four months of December through March, the high season months last year equated to more than one-third of annual demand.Total domestic and international arrivals at the airport totaled just over 9 million in 2019.Adding in high season shoulder months into the equation, the stark economic impact of Phuket’s economic seasonality is reflected in the fact that well over half of the island’s tourism arrivals are packed into a six-month period.

 

Now, nearly two months into that timeframe, what is apparent is it’s virtually impossible to save the high season, and hotel owners in 2021 will be forced to contend with historically the lowest trading months of the year by May. Given these grim prospects, C9 is predicting more large-scale job losses and business closures given there is no light at the end of the pandemic-induced tunnel.

 

“Taking a 360-degree view on the restricted domestic-only demand, you have to take into account that Phuket’s current registered accommodation supply has continued to surge to its present size of 90,267 rooms in 1,773 hotels/tourism establishments”.

 

“Of this supply upper midscale, upscale, and luxury properties of international standards are approximately 25% of the total rooms.”

 

 

Data from leading data intelligence provider STR daily has Phuket occupancy averaging 10% with upward spikes on weekends at international standard hotels. Looking into the number though, the reality is domestic travelers are cashing in on cheap deals at upscale and luxury hotels.Given limited visitor arrivals the far larger mid and economy tiers where most of the hotel inventory sits, are experiencing even lower occupancy. This domino effect is expected to prevail unabated throughout a sustained downturn and effectively crushes the smaller properties and local tourism businesses.

 

As Thailand’s government policy has maintained Bangkok as the sole entry point for a limited number of travelers from overseas under the Alternative State Quarantine (ASQ) program, a number of hotels in all tiers are operating under the scheme. Hotel performance data for Bangkok from STR is reflecting occupancy just above 25% for international standard hotels, though again in the broader marketplace demand is at considerably lower levels.

 

In Phuket, many hotels pinned high-season hope on the now-aborted ‘Phuket Model’ to allow Special Tourist Visas (STV’s) aimed at long-staying visitors, which is logical given the island’s legacy winter ‘snowbird’ market from Northern Europe and Russia. Putting the Alternative Local State Quarantine program at the head of the reopening tourism initiative, 17 Phuket hotels have been approved and 21 applications are under process. Properties who have undertaken both the expense and time in qualifying for the status have been shut-out, given the government’s about-face policy of centralising all overseas arrivals into Bangkok.

 

What is unclear is the logic in policy flip flop on negating the island’s essential tourism lifeline. Using smaller contained resort-focused islands would appear a logical risk mitigation strategy that was echoed in all of the hype over the ‘Phuket Model’ but after the dust has settled, it ultimately failed to launch.

 

The time has come that Thailand must gain confidence from international benchmarks, such as the tourism dependent Maldives. According to data from the nation’s Ministry of Tourism, in October the destination recorded 21,514 tourist arrivals. This trend is again on the rise in November and looking back the country has safely managed the reopening of its borders since mid-July. Another nearby island, namely Singapore is set to put an overseas travel bubble into place within this month to Hong Kong.

 

“Losing this high-season will further intensify the catastrophic impact on the island’s business owners and the livelihoods of the vast majority of residents. Given the sheer size of the hotel inventory, it cannot survive only on domestic visitors, cheaper airfares, or by adding more public holidays. For Phuket, this high season, faced with the prevailing arithmetic the island can only wait and wonder what comes next.”

 

Source: https://thethaiger.com/news/phuket/phukets-tourism-high-season-hopes-shattered-in-policy-flip-flop

 

-- © Copyright The Thaiger 2020-11-10

 

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[petermik]

"change in policy flip flop" well who could have possibly imagined that happening here in LOS....

[mr mr]

20 minutes ago, webfact said:

Phuket’s tourism high-season hopes shattered in policy flip-flop

 

what high season would that be ? 2036 ? 

[Boomer6969]

What "high season" are they talking about? 2020/2021 or 2021/2021 ? The latter is the only one that's worth planning for, as far as international tourists are concerned, and would remains optimistic as billions of doses of vaccine will be needed before any kind of normality returns.

[JusticeGB]

3 hours ago, petermik said:

"change in policy flip flop" well who could have possibly imagined that happening here in LOS....

Even the flip flop policy is so successful that no tourists seem to be arriving in November. Last month the tourists appeared to be Consulate staff! Even 300 people a week is hardly going to rescue the tourism industry!

[KarenBravo]

The government policy flipped and the latest high season flopped.

[Oldie]

I think everybody understands that the high season this year will be be substantially lower than normal. So what does he want - open the boarders? But even then he might get a disappointment. And whatever kind of Phuket Model. It will never be able to bring back the needed tourist numbers. Perhaps an opportunity to focus more on domestic travelers even if this can't replace international tourists. 

[brommers]

When will the government and others realise that domestic tourism is not a viable alternative. Short stays, low spend is not a formula that will keep the industry afloat. And these schemes to stimulate shopping are nothing more than throwing candies to children, they merely get people excited to register but achieve nothing more.

 

Quite simply this so called government has no talent, no ideas and no chance of achieving anything. They are doomed to failure and sadly so is a large part of the tourism infrastructure. But the people who become destitute in their millions will not forget and their revenge will be taken.

[sammieuk1]

Well and truly cooked ????

 

[Oldie]

32 minutes ago, brommers said:

When will the government and others realise that domestic tourism is not a viable alternative. Short stays, low spend is not a formula that will keep the industry afloat. And these schemes to stimulate shopping are nothing more than throwing candies to children, they merely get people excited to register but achieve nothing more.

 

Quite simply this so called government has no talent, no ideas and no chance of achieving anything. They are doomed to failure and sadly so is a large part of the tourism infrastructure. But the people who become destitute in their millions will not forget and their revenge will be taken.

You blame the government that it does not have any ideas. What do you suggest? 

[DrDave]

4 hours ago, Oldie said:

You blame the government that it does not have any ideas. What do you suggest? 

 

Learn from other countries that have opened to tourism. Mexico and the Dominican Republic are just two that that come to mind. Both have popular tropical, beach destinations similar to Phuket that are welcoming foreign arrivals and putting their citizens back to work.

[Burma Bill]

10 hours ago, webfact said:

refocus by the government on using Bangkok as a single international gateway,

All the income from duty free and other retail outlets all channeled into Bangkok??????

[Oldie]

1 hour ago, DrDave said:

 

Learn from other countries that have opened to tourism. Mexico and the Dominican Republic are just two that that come to mind. Both have popular tropical, beach destinations similar to Phuket that are welcoming foreign arrivals and putting their citizens back to work.

So Thailand should learn for instance from Mexico? Do you know how the Covid situation is in Mexico? Worldwide it has the 4th highest death rate. Thailand still should learn from Mexico? Read this:

 

"CDC recommends travelers avoid all nonessential international travel to Mexico. Travelers at increased risk for severe illness from COVID-19 should consider postponing all travel, including essential travel, to Mexico.
COVID-19 risk in Mexico is high.
If you get sick in Mexico and need medical care, resources may be limited."

 

https://wwwnc.cdc.gov/travel/notices/warning/coronavirus-mexico

 

Do you still want that Thailand learns from Mexico? 

[DrDave]

42 minutes ago, Oldie said:

<snip>

 

Do you still want that Thailand learns from Mexico? 

 

There's a big difference between areas like Mexico City, and the somewhat isolated tourist areas like Cancun and Cozumel. Just like there's a big difference between New York City and Martha's Vineyard or Catalina Island. 

Very stringent safety protocols have been put into place at all of the tourist areas that have been opened in Mexico and the Caribbean.  There's probably a greater risk of being infected by shopping at your local supermarket as compared to staying at a Caribbean all-inclusive beachfront resort.

[Guderian]

12 hours ago, webfact said:

in the four months of December through March, the high season months last year equated to more than one-third of annual demand.

 

Duh, the last time I checked a year had 12 months, so why is it noteworthy that four months is a third of the year? 

[marcusb]

8 hours ago, Oldie said:

So Thailand should learn for instance from Mexico? Do you know how the Covid situation is in Mexico? Worldwide it has the 4th highest death rate. Thailand still should learn from Mexico? Read this:

 

"CDC recommends travelers avoid all nonessential international travel to Mexico. Travelers at increased risk for severe illness from COVID-19 should consider postponing all travel, including essential travel, to Mexico.
COVID-19 risk in Mexico is high.
If you get sick in Mexico and need medical care, resources may be limited."

 

https://wwwnc.cdc.gov/travel/notices/warning/coronavirus-mexico

 

Do you still want that Thailand learns from Mexico? 

 

I'm currently south of Cancun, along with many other tourists. Not near the numbers as usual but still here helping out the economy and enjoying the sun.  Precautions are similar to when I left Thailand in June, temp checks, hand sanitizers, masks etc.  I'm not aware of Mexico City but in the Yucatan the hospitals are coping well and are nowhere near capacity. 

 Cope with the virus as best as possible or kill the economy. Tough choices. 

[hotchilli]

23 hours ago, webfact said:

The key tourism indicator for the island is airlift and Phuket International Airport is the gateway for 70-80% of visitors to the destination.

So talk to the transport minister... lay on special transport via road & rail.

Design special packages for Thais from central & northern areas, including hotel stay, food packages and tours locally.