Phuket High Season Down 25% Year-On-Year: Analyst

[george]

Phuket high season down 25% year-on-year: analyst

PHUKET: -- The start of this year’s high season for tourism in Phuket is down about 25% overall compared with last year, one industry analyst has said.

Bhuritt Maswongsa, vice-president for marketing at the Phuket Tourist Association, said occupancy rates at Phuket hotels in November were only about 60%, on average.

“We used to get occupancy rates in the 70% to 80% range in November, and 85-90% in December, but we aren’t getting them this year because Europeans aren’t travelling,” he said.

Economic recession, increased tax rates, higher fuel charges and the introduction of a “travel tax” in some EU countries had pushed up airfares and package tour prices “a lot”, he said.

Unusually heavy snowfall across much of the continent has also hurt arrival figures because of flight cancellations, and also because Europeans who felt their homes were at risk did not want to leave them, he said.

The situation in Phuket would be far worse if it weren’t for continuing growth in non-European inbound markets, including China, Korea, Australia and Russia.

These four countries, together with Singapore and Malaysia, have now surpassed Europe collectively as a source of high-season tourists to Phuket, he said.

An oversupply situation in the resort sector continues to shorten the peak season, when most resorts are at or near full capacity, he said.

“This year’s peak season runs from December 24 through until January 20, after which it will slow down again,” he said.

Mr Bhuritt expressed exasperation with the fact that resorts continue to spring up all over the island despite the obvious oversupply.

The start of this high season was down “about 25% to 30% overall” compared with last year, he estimated.

The downturn appears to match the prediction of those who took part in a Phuket Gazette online poll posted in mid-November, when almost 75% of those voting said they thought the rising baht would have a considerable negative effect on high-season performance.

-- Phuket Gazette 2010-12-24

[asiawatcher]

If you didn't double and triple your rates and hit every one of the farang then they may be here! The strong Baht also precludes you. Wake up guys!!!

[KarenBravo]

"Mr Bhuritt expressed exasperation with the fact that resorts continue to spring up all over the island despite the obvious oversupply".

Why should he be exasperated? The oversupply creates jobs and taxes for the present.

In the rest of the world, a market mechanism called "competition" resolves this problem.

Resorts don't want to compete? What a surprise........

[stevecm]

If you didn't double and triple your rates and hit every one of the farang then they may be here! The strong Baht also precludes you. Wake up guys!!!

couldn't agree more, the article blames everything external, and not one reason is to do with Thailand itself. Sure they contribute, but there are also a lot of internal reasons to do with Thailand why people choose not to travel here at the moment.

Edited December 24, 2010 by stevecm

[ginjag]

If you didn't double and triple your rates and hit every one of the farang then they may be here! The strong Baht also precludes you. Wake up guys!!!

couldn't agree more, the article blames everything external, and not one reason is to do with Thailand itself. Sure they contribute, but there are also a lot of internal reasons to do with Thailand why people choose not to travel here at the moment.

Bang on you 2, Hey a few days ago didn,t we have a report about (TAT) figures UP--yes UP. excuse me if I have got that bit wrong. These so called touts-robbers stealers muggers --the problem is, they will have to do more of it , cause the numbers are down-

[FarangBuddha]

Maybe the negative publicity re the jetski and tuk-tuk "mafias" are finally taking a measurable toll on the Phuket tourist industry

[jonclark]

If you didn't double and triple your rates and hit every one of the farang then they may be here! The strong Baht also precludes you. Wake up guys!!!

couldn't agree more, the article blames everything external, and not one reason is to do with Thailand itself. Sure they contribute, but there are also a lot of internal reasons to do with Thailand why people choose not to travel here at the moment.

Bang on you 2, Hey a few days ago didn,t we have a report about (TAT) figures UP--yes UP. excuse me if I have got that bit wrong. These so called touts-robbers stealers muggers --the problem is, they will have to do more of it , cause the numbers are down-

Nah, you've got it all wrong, it's not Thailand's fault, it's the falangs fault for not coming here on holiday. How dare they not!!. Thai logic.

Merry Christmas ya' all

[dom samui]

They can send the bill to this famous monk, between chiang mai and chiang rai

[ukinbkk]

Phuket has seen a big down turn in tourists so far this year.. I would say from talking to bar owners/small hotel owners that it is more like 50% down.. The old saying goes..YOU REAP WHAT YOU SOW.. Springs to mind.. I have been here for the last 3 mths, I am cutting my stay short because of everything that has been mentioned in previous posts, I am so fed up with being ripped off. Bkk here i come, I can't gwt out of Phuket fast enough and will never return.

[KarenBravo]

Lack of European tourists has nothing to do with tuk-tuks, rip-offs, or, anything else within Phuket, no matter how much some people would like to think it is.

It is all about nervousness about job losses, paying down credit debt instead of a holiday, the uncertain future of the economy and the bad exchange rate.

Edited December 24, 2010 by KarenBravo

[christcourt]

Lack of European tourists has nothing to do with tuk-tuks, rip-offs, or, anything else within Phuket, no matter how much some people would like to think it is.

It is all about nervousness about job losses, paying down credit debt instead of a holiday, the uncertain future of the economy and the bad exchange rate.

I couldn't agree more!! The exchange rate is a real factor in all this as the Baht strengthens against most currencies. The value of the Pound and Dollar has dropped over 30 % in three years so its no wonder people are looking else where. Add all the other bad press items like the Red and Yellow shirt brigades, doing there <deleted> in Bangkok its no wonder.

[ginjag]

Lack of European tourists has nothing to do with tuk-tuks, rip-offs, or, anything else within Phuket, no matter how much some people would like to think it is.

It is all about nervousness about job losses, paying down credit debt instead of a holiday, the uncertain future of the economy and the bad exchange rate.

I couldn't agree more!! The exchange rate is a real factor in all this as the Baht strengthens against most currencies. The value of the Pound and Dollar has dropped over 30 % in three years so its no wonder people are looking else where. Add all the other bad press items like the Red and Yellow shirt brigades, doing there <deleted> in Bangkok its no wonder.

Agree with all you both said. But why in hell dont you think that the rip offs have no bearing, they are part of it along with what you both said. Ask the people who live there and the people who are getting out fast. If your ripped off badly on holiday, do you smile ?? most do not come back, and they tell their friends about it.

[KarenBravo]

Lack of European tourists has nothing to do with tuk-tuks, rip-offs, or, anything else within Phuket, no matter how much some people would like to think it is.

It is all about nervousness about job losses, paying down credit debt instead of a holiday, the uncertain future of the economy and the bad exchange rate.

I couldn't agree more!! The exchange rate is a real factor in all this as the Baht strengthens against most currencies. The value of the Pound and Dollar has dropped over 30 % in three years so its no wonder people are looking else where. Add all the other bad press items like the Red and Yellow shirt brigades, doing there <deleted> in Bangkok its no wonder.

Agree with all you both said. But why in hell dont you think that the rip offs have no bearing, they are part of it along with what you both said. Ask the people who live there and the people who are getting out fast. If your ripped off badly on holiday, do you smile ?? most do not come back, and they tell their friends about it.

Most tourists are either first timers and don't know, or, they are returners and know how to avoid the scams.

[Pib]

Well, at least one industry analyst is telling it like it is versus some of the positive, upbeat tourism reports from the govt.

[12DrinkMore]

here's my take on this, FWIW.

The Asian currencies have stayed more or less in line with each other. Asia is becoming wealthier and there is much more discretionary spending money around. Hence the increase in Asians holidaying in Asia. This is a very positive development.

In Europe and the States (although the US does not have the same foreign travel mentality) they are now entering the third year of the crisis, recession, depression, whatever you want to call it. I have the impression that the bullshit "we are recovering" propaganda is now being seen for what it is. There is not going to be a quick and happy return to boom-time. There might be a "jobless" recovery, but I believe the fear of a very prolonged "whatever" is now at the forefront of peoples minds. Everyday more news about DEBT, DEFAULT, SOVEREIGN DEBT, BANK INSOLVENCIES is in the news. Debt is surely now seen as not something desirable..

So, hunker down, pay off debt, restrict spending, are the themes.

Add in the exponentially increasing rents that the landowners in Phuket charge, which then have to be reflected in the room rates, restaurant prices etc. What does Phuket expect?

On the one hand they reckon to have something special that can be charged a premium for, on the other hand they have overdeveloped the place and made it unattractive. I never bother to go there except on business, and I hear it from a lot of tourists that it was not the "paradise island" they expected. I also know of expats who are trying to sell and get off the island.

If Phuket continues along this path it will suffer year after year from declining visitors as more attractive destinations market themselves. And in Thailand I have never come across a "long term plan for the future", it is always the "quick buck" and "maximize my personal gain". To reduce rents is to loose face. It won't happen, unless the bank is taking the empty property off them.

This golden goose is being strangled.

[gemini81]

Well, at least one industry analyst is telling it like it is versus some of the positive, upbeat tourism reports from the govt.

that part is true, but he fails to have the balls to explain why thailand is the cause and the real reasons why people don't wanna go there, besides some increase in the baht.

[Benjie]

The Maths simply doesn't add up.

The occupancy rate is according to the source down 10-20% in November, yet there are a ton of new resorts. How would this equal down 25% year on year? Surely a rise in hotel rooms of lets say 20% or so year on year would mean that in fact the high season is at least on par if not better than last year. I'd hazard a guess that there are more than 20% more rooms available this year than last year.

This sounds like local Phuket Hoteliers simply trying to scare international competition away because its eating into their market share. Thats a different matter entirely.

As others have mentioned competition is healthy, should keep prices in check which will make Phuket more attractive in the long run

[camwilsonart]

I've spent most my winters in Phuket since 2001 and have seen it decline in pretty much every aspect. The last time I spent there wasnt fun at all. The decline in numbers correspond with the trashy reputation Phuket unfortunately yet deservedly now has. I'm heading elsewhere this time. It's sad because I've had some of the best times of my life on Phuket.

[craigt3365]

Lack of European tourists has nothing to do with tuk-tuks, rip-offs, or, anything else within Phuket, no matter how much some people would like to think it is.

It is all about nervousness about job losses, paying down credit debt instead of a holiday, the uncertain future of the economy and the bad exchange rate.

I couldn't agree more!! The exchange rate is a real factor in all this as the Baht strengthens against most currencies. The value of the Pound and Dollar has dropped over 30 % in three years so its no wonder people are looking else where. Add all the other bad press items like the Red and Yellow shirt brigades, doing there <deleted> in Bangkok its no wonder.

Agree with all you both said. But why in hell dont you think that the rip offs have no bearing, they are part of it along with what you both said. Ask the people who live there and the people who are getting out fast. If your ripped off badly on holiday, do you smile ?? most do not come back, and they tell their friends about it.

My mom is a part (small) owner of a golf course in Nevada. Play is down about 25% vs. last year. Players are not renewing their yearly membership, fewer Canadian's coming down, etc. The course is in the best condition it's been in for years...but play is down.

It's just a lousy global economy with many people out of work. The global economy is the #1 factor, with the strong Thai Baht not far behind. But for sure, there are other factors that effect tourism. Riots, poor service, scams, etc. But they are not the #1 reason tourism is down....

[neverback]

Have not that guy heard of the money-laundering? The tourism business doesn't really bother any corrupt politician or a mafia guy. They need to show where they spend their money at.

As far as a tourism,it's gonna get only worse, unfortunately,at least for the next few years.

Edited December 24, 2010 by neverback

[Nowhereman60]

Wasn't it just a few days ago, TAT or the government was telling us the Tourist is up and will be higher next year. Got to remember the Chinese and Malaysians don't spend the money the European do.

[asiawatcher]

Maybe the negative publicity re the jetski and tuk-tuk "mafias" are finally taking a measurable toll on the Phuket tourist industry

Agree - it all takes its toll and now in the other blog, they are running full scale Tsunami drills - who the hell would ever want to go to Phuket. It is the cesspool of Thailand and lower than Pattaya!

[ratcatcher]

If Phuket resort owners are worried now, God forbid what would happen IF a miracle happened and Burma became a really open, tourist-friendly country. The Burmese Andaman coast and the Mergui archipelago would be the death knell of Phuket. It would be like Thailand 60 years ago.

Hundreds of pristine islands with diving in clear seas; Phuket has it all to lose. No wonder some Thais in the know are worried.

Or am I way off here?

[Ulysses G.]

It is about the ECONOMY (and the strong baht and the red-shirts), but I do not think the Burma "miracle" will happen any time soon anyway.

[Cnxforever]

Phuket has seen a big down turn in tourists so far this year.. I would say from talking to bar owners/small hotel owners that it is more like 50% down.. The old saying goes..YOU REAP WHAT YOU SOW.. Springs to mind.. I have been here for the last 3 mths, I am cutting my stay short because of everything that has been mentioned in previous posts, I am so fed up with being ripped off. Bkk here i come, I can't gwt out of Phuket fast enough and will never return.

I absolutly agree with you - after my last vacation in Phuket in 2009 I also vowed never to return and I have no desire to do so.

When I arrived first in Phuket years ago it was on a cruise ship. A Thai friend who had worked with me before came to visit since I was already ashore in front of the ship we decided to take the "taxi" in which he had just arrived and go back to Patong beach.

What happened next was my first impression of Phuket - asking the guy how much it was to take us back to Patong where my friend had just arrived from - the driver was immediately confronted and threatened by the "local mini bus mafia' and had to leave empty - we where then told no other transport then the local mini buses allowed!

We where then also told that the price per person (in a 9 seater mini bus) was 500 Baht a head to go to Patong for the approx. 20 minute ride - return 1000 a head - no other transport available - take it or leave it! Welcome to Phuket!

Returning later for vacation with family we experienced many more of these "unpleasant" incidents - I am one of those tourists with "high spending power" - I have no problem paying for quality - but wherever I went in Phuket I just could not get ridd of the feeling that I was being taken advantage of and ripped off whenever the locals saw a chance to do so.

I have traveled around the world extensively and apart from the many negative experiences I had in Phuket - I never understood what the fuss about Phuket is anyway - the beaches are for sure not first class and the infrastructure - for what is supposed to be one of the richest provinces in Thailand - is lousy to say the least. An overbuilt, overpriced resort island that has long lost it's charm. Once one nice beach has been destroyed the vultures move on to the next one.

There is no coordination to create a "world class" resort atmosphere hardly anybody gives you the feeling of being a "welcome guest " - like they manage to do in other major resort destinations around the world.

The quick buck and pure greed is what reigns in Phuket and I feel sorry for the many professionally and well run businesses who have to suffer because of the failure of the Phuket administration and those greedy scoundrels who jump at you at every corner. There is no long term strategy and the people in charge of the place are a miserable failure!

Failing to address infrastructure problems as well as the failure to control the various "mafias".

Corruption , under the table payments and "commissions" have become so rampant raising prices for mediocre services (like the totally overpriced often very poorly run tours!) to the unbearable. Taking advantage of tourists who are often seen as helpless suckers is for sure no way to make them return.

Wonder when they will realize that we actually have a choice as to where we will spend our vacation? And for me the choice was made easy by my experiences in phuket - simply "NEVER AGAIN!"

[Cnxforever]

If Phuket resort owners are worried now, God forbid what would happen IF a miracle happened and Burma became a really open, tourist-friendly country. The Burmese Andaman coast and the Mergui archipelago would be the death knell of Phuket. It would be like Thailand 60 years ago.

Hundreds of pristine islands with diving in clear seas; Phuket has it all to lose. No wonder some Thais in the know are worried.

Or am I way off here?

I have been saying that for years - apart from cheap gas - this is one of the reasons why successive Thai governments support the repressive military regime since many years. Also the corruption of the military rulers suits them very well - almost like home!

They want it to remain as it is - an open - god forbid - tourism industry developing Burma - with pristine beaches in the south and countless attractions throughout the country would be a very unwelcome competition for Thailand. The funny men in uniform across the border are just to stupid to realize that!

[slapout]

The Thai tourist service industry seems to operate on the old adage "theirs a sucker born every minute". They apparently forget that this was before mass communication networks that are available world wide in today.

Most people who think too highly of their own intellect are doomed to failure. When you compare the progress/change used to continually draw tourists for decades by casinos, theme parks, etc around the world, it would appear to substantiate some of the IQ questions concerning the LOS.

[madmitch]

If you didn't double and triple your rates and hit every one of the farang then they may be here! The strong Baht also precludes you. Wake up guys!!!

I assume that you are referring to hotels and guesthouses in your comment.

Hotels do not double their rates in high season, they halve them in low season.

If they worked on low season rates year round they would probably go bankrupt.

Bills, salaries, overheads and taxes have to be paid in baht so it's difficult to factor the value of the currency into the pricing.

There are bargains around. Rates on the last minute booking sites are lower than they have ever been for this time of year. The reason is, I believe, that tour companies that have rooms contracted to them, are not taking up their allocation and the returned rooms are then advertised on the aforementioned websites.

I read through the thread and don't remember a mention of another major reason for a downturn in European tourists and that is the price of long-haul flights in general, which seem to rise year after year.

Last year March was a very good month on Phuket as the bad winter in Europe persuaded a lot of Scandinavians in particular to take a late winter break. Maybe, just maybe, we will see the same in 2011.

[ScubaBuddha]

And don't forget that hotel operators in Phuket under report the amount of rooms they physically have by up to 30%, and pay off the appropriate officials to do so in order to avoid paying appropriate taxes. Depending on how they calculate the 25%, actual occupancy rates could be much lower.

[kennalder]

I agree with most of the above, but I think we are all preaching to the choir. Just as we are not allowed to hold positions like Tour Guides, and apparently things like helping write English signs, I think we are also banned from giving advice to Thais. After all, they do everything so well already.