What will Phuket be like in 5-10 years from now?

[simon43]

It's a quiet afternoon, so let's open a new thread

I'm always optimistic (as my Avatar/name suggests). But I'm also realistic. For the first time, I am actually doubting whether Phuket will attract large numbers of foreign tourists in 5 or 10 years from now, and that will have a serious effect on my/ex's small hotel businesses.

Thailand/Phuket bounces regularly from one natural disaster or self-inflicted, political 'wound', but the tourists keep on coming.

Will there ever be a point when that cash-cow dries up?

In my own case, I do have a successful 'plan B' (teaching/educational management) in case plan A goes down the pan. I am beginning to feel that I should now swap A for B, and work in the educational sector for 10 years or so, using my hotel income as an emergency/second income source.

I'm financially OK, but I don't really want to sideline my teaching career in favour of a business that could hit a brick wall some years in the future.

The recent military coup is just one event that 'rocked the tourist boat'. I see few improvements for Phuket because of this coup, since (trying not to go too political), the military support the political persuasion that exists in south Thailand, where tourist centres are rife with political corruption.

My concern is more about emerging tourist destinations, such as Myanmar, such as the unspoilt beaches of south Myanmar, (and I'm too old to build a hotel there...).

If you own or manage a business here, do you have concerns about the profitability of your business in the years to come?

Also - for those who might ask why I don't retire, the short answer is:

Ain't got time for that!

Edited June 2, 2014 by simon43

[fiddlehead]

Basically the same IMO.

5 years is not long.
When I go back to my hometown, not much has changed at all in 15 years.

Here, there are changes: more concrete, more cars, more hotels, definitely more convenient stores.
But, the numbers are not much different.
The nationalities are.

[NamKangMan]

"What will Phuket be like in 5-10 years from now?" - Pattaya.

All concreted over and nothing left to sell to tourists but sex.

It happened there, why do people think it can not, or will not happen here?

[LivinginKata]

Interesting question. As a long time business owner here (16 years now) in the residential home rental sector, my view is that the future is NOT rosy. Indeed I often advise newbies here not to bother putting their money into a business here in Phuket unless they have a novel angle that will promote long term custom.

Way back in time it was much easier to start and maintain a business. Land/property/leases were much cheaper (but not now), in my area of business there was a severe shortage of mid range, by european standards, property (but not now), the long stay expats and short stay tourists used to have more disposable income (not now).

We have done well, very well, and we are financially secure outside our business. So we could close the doors anytime given that we own all our properties and have no rent money to pay. How many business owners actually own feehold the land their building stands on. That's a major problem here in Phuket, most folks have only a 3 year lease on the property, a few might have 30 years lease, and even fewer own outright. Trouble is that it is just way way too expensive to buy, even if you could find an owner willing to sell at a sensible price.

I have noticed a decline in our business revenue starting about 5+ years ago. We weathered SARS, Bird Flu, Tsunami, and other natural disasters. My view is the decline set in with the start of global recession in about 2007 - 2008. The political situation did not help, and especially the closure of various international airports in Thailand. With the internet social media all the scam problems here in Phuket became well documented and available for reading by any potential visitor.

In summary I would not start a new business here in Thailand this 2014 year, indeed I would not invest any new money in business expansion. I made that decision 6 years ago and invested our profits in overseas finacial institutions. We had already bought the land in 2006 and had planned to build a new small condo building in 2008. Best decision I ever made to shelve the condo build.

I hope that helps answer your question Simon.

[simon43]

I hope that helps answer your question Simon.

Yes, it's nice to read a stark opinion made without rose-tinted glasses.

We were going to build another small guesthouse this year. We've decided against that, (even though the customer demand is there right now). It's the future that worries me more and more, (not financially, but I can't think of anything more depressing than sitting in an empty hotel without customers!).

My earnings ratio from teaching:guesthouses is currently about 1:3, but I am sure the number 3 will be decreasing in the coming years.....

Simon

[Lancelot]

I have noticed a decline in our business revenue starting about 5+ years ago. We weathered SARS, Bird Flu, Tsunami, and other natural disasters. My view is the decline set in with the start of global recession in about 2007 - 2008. The political situation did not help, and especially the closure of various international airports in Thailand. With the internet social medium all the scam problems here in Phuket became well documented and available for reading by any potential visitor.

I'm surprised that tourism has held up as well as it has

I'm retired and have never invested or owned a business in Thailand, so readers may take my comments and observations with a grain of salt. My last trip back to the US was in late 2011 and I was shocked at how many people in ther 40s, and older, were working at McDonalds. Those jobs used to be filled by high school kids and now adults are scrambling for them. Any way you slice it folks don't take many trips abroad on McDs wages

I am always silently observing and I see the wide eyed tourists gushing at how lovely Thailand is while I listen to the tuk tuk drivers laugh at the exorbitant price they just charged a foreigner.

To each his own but the more I hear about how wonderful Thailand is and how the junta will resolve all the problems, I'm thinking about my own Plan B

[nedkellylives]

There re a lot more Thai people opening and running successful small businesses here now

Who expats have to compete with

One Thai lady comes to mind, started with one restaurant about 7 years ago and now has

3 restaurants and 2 guest houses with family members running the different businesses

[cdmtdm]

the global picture is not rosy imo , safety in investing is a thing of the past , LIK u have done well and the big question is what to do next ,,,, as much as i dislike a coup, if the junta do what they say , Thailand could turn around and get a new injection of overseas investors ...it all hinges on the next year or two ,,, perhaps the worst is over here ... however the global financial tsunami when it comes will affect all ... we all know its lurking and the sooner its over the better ... so i say to answer the OP question .. i think in 5 years the picture maybe better than now , in between now and then pain for all ....

[shirtless]

I think Phuket may have already had its day in the sun, In my opinion it will always have tourist but it will no longer be their primary destination.

[Gonsalviz]

I don't want or care to know. Stopped caring atleast 5 years ago.

[VBF]

I have noticed a decline in our business revenue starting about 5+ years ago. We weathered SARS, Bird Flu, Tsunami, and other natural disasters. My view is the decline set in with the start of global recession in about 2007 - 2008. The political situation did not help, and especially the closure of various international airports in Thailand. With the internet social medium all the scam problems here in Phuket became well documented and available for reading by any potential visitor.

I'm surprised that tourism has held up as well as it has

I'm retired and have never invested or owned a business in Thailand, so readers may take my comments and observations with a grain of salt. My last trip back to the US was in late 2011 and I was shocked at how many people in ther 40s, and older, were working at McDonalds. Those jobs used to be filled by high school kids and now adults are scrambling for them. Any way you slice it folks don't take many trips abroad on McDs wages

I am always silently observing and I see the wide eyed tourists gushing at how lovely Thailand is while I listen to the tuk tuk drivers laugh at the exorbitant price they just charged a foreigner.

To each his own but the more I hear about how wonderful Thailand is and how the junta will resolve all the problems, I'm thinking about my own Plan B

In 2007 I was all set to retire to Thailand. The recession came along and I "sat on the fence" for a while. I'm still perching and rather glad I didn't burn my bridges.

I still love Thailand but unfortunately the rose-tinted specs came off a long time ago and I'm still a tourist when it suits me.

Phuket in particular is (as I've remarked before) ruined by greed and lack of planning.

And you know what? It's just so sad! Paradise lost!

Edited June 2, 2014 by VBF

[jocko]

I feel its not as cheap as it used to be i dont mean for regulars but the tourist and other places want Thailands tourists.

I think they think it will last for ever there is no better place than Thailand.

Have you ever tried to disuss with a Thai about other places that might take there customers.

And never mention Myanmar after that the wont believe any input from you.

You dont understand Thailand springs to mind.

[stiggy]

The same attractions will be there , i.e. sun, beaches, islands etc. The demographic will change more towards mass tourism less independents.

As a result there will be less to go around, as those operating mass tourism co's abroad will take the lions share.This will intern piss off the locals and cut incomes increasing hostility and unfortunately crime.

Combine this with up and coming destinations in the region. Malaysia, Vietnam, Cambodia, Myanmar, Sri Lanka.Then finally add the political uncertainty, and view it as some one who doesn't live here.And it's not looking good.

I'm out after 16 years,still keeping a toe in as far as business, but like "Living in Kata" will not be reinvesting (beyond dynamic costs) or starting new mid to long term ventures.

Other countries are currently offering more in terms of stability, ease of living and conducting business.

[BKS22]

Phuket is already exploding at the seams. They are scrambling to catch up to handle the growth (i.e. the underground Central Festival bypass) and we all know how nothing in Thailand gets done in a hurry. And if it does...the quality & safety suffer.

My wife was born & raised in Phuket and she said she barely recognizes it anymore. It's glory days as a beautiful island have been replaced by a tourist trap that's resources are tapped out.

[ezzra]

A cesspool with ocean view....

[steelepulse]

Part of the problem is the ones with the surly, thuggish, greedy attitudes only care about the here and now, and have no idea that punters have a plethora of choices. If these surly locals only could see how other countries are treating tourists like quality visitors instead of ATM's, perhaps their opinions would change about Phuket being the golden goose and tourists as being stupid.

[Valentine]

The mindset has been ingrained for too long to ensure any meaningful changes. In the early 90's when I was working offshore I used to rent a motorbike for my 28 days off here in Phuket, Price was reasonable & the guy would give me the same rate all year round. One high season he did not have any bikes for rent so I tried the beach front renters who had large numbers of bikes not being rented in the middle of the high season. They were trying to charge 3 times the low season rate & absolutely unwilling to negotiate simply because it was high season. In essence they did not not even realise the economics of the situation. The attitude of not caring about tomorrow has always been the undoing here.

[PattayaPhom]

"What will Phuket be like in 5-10 years from now?" - Pattaya.

All concreted over and nothing left to sell to tourists but sex.

It happened there, why do people think it can not, or will not happen here?

I think you have to visit Pattaya, the sex industry has declined dramatically in the past 5 years and is now visited by families and young couples. The beach road which was predominatly bars is now major shopping malls, hotels and restaurants. I lived in Phuket pre and post tsunami leaving in 2005. Phuket does not resemble anything like then, and the prices and greed now is turning away people in their droves. I had a quick visit last year and was shocked at the changes and prices of food, enterntaiment and transport. Phuket is a lot seedier than Pattaya and this seems to be the way the island has gone, if it carrys on in that direction, yes it will be like Pattaya but Pattaya of 10 years ago

[phuketrichard]

i moved here form Pattaya in 1985,

never thought it would ever get the way it is now. SO i expect it to keep growing, the hills between Kalim and Kamala to Surin will be filled with condos/hotels.

The thai's bounce back time and time again.

Tourism will shift ( it already has) but they will keep coming

as to expensive, yes it has gone up since then but if a Burmese worker can work, live here an still save $$, Well i can too. :-)

[Lancelot]

^ I agree. The Pattaya "Industry" is in decline and being replaced by a tacky, family friendly sea side resort with easy access to Bangkok.

Yeah, people will laugh at this prediction, but lets revisit the topic in ten years

Back on topic, Phuket has some beautiful sites, but the locals are becoming jaded, then the tourists get jaded and its a recipe for disaster. Hats off to the folks that have operated successful businesses in Thailand; maybe its time to enjoy the fruits of your labor?

[JimHuaHin]

Phuket in particular is (as I've remarked before) ruined by greed and lack of planning.

And you know what? It's just so sad! Paradise lost!

Regretfully, one can see the same happening in Hua Hin - destruction of the local natural beauty that brought many of us here during the 1970s - 1990s and massive amounts of construction, but severely struggling infrastructure. When the 10,000-odd condos currently under construction in Hua Hin come on-line over the next 18 months (as well as a huge new shopping complex in south Hua Hin), I am unsure how the electricity and water supplies will cope, let alone the roads, especially Petchkasem Road (driving on the weekends, and trying to find a car park to do shopping with family, is becoming an increasingly difficult and stressful experience).

[LivinLOS]

You need to really spell out what the question means or what part your answering... Simply numbers of arrivals.. quality of life, for both locals, resident foreigners, or just tourists.. Or potential incomes to tourist centric businesses (and then again, in what aspect, high end, mid end, low end, high volume or boutique)..

I think numbers will continue to expand..

I think those numbers will be spending less relative cash per person on average or spent in more controlled ways (resort spending v direct local economy)..

I think those increased numbers will result in increased demands on strained infrastructure, and damaged natural appeals (the tipping point is well past personally).

The culture of greed, of protest, of gangs, cliques, and mafias fighting over each segment as a monopoly drives prices ever higher for no additional service benefit.. This is a hamster wheel for the locals too, who face contact increased supply, not matched by demand, and more desperation trying to live in the increased costs of the island.

Also a local workforce who thinks the world owes them a living, and more people will always come, without regards for the services and quality of experiences offered.. The goal of getting quality tourists isnt simply raising prices for the same shoddy product.. Charging multi 1000b for the same cowboy operators on a speedboat piloted by some teenage meth head, without lifejackets or safety consideration does not make it a high end tour !! Many Thais have so little worldview they just dont know how 'high end' things work or have the desire to make those smooth seamless experiences happen.. And actively fight against improvement as it cuts out their own low end skills (see Thai tour guides protesting them giving a chinese tour guide a slapping today) the lack of being able to implement real transport options to keep a bunch of cowboys in noddy carts employed. Even the most basic things cant be done as it hurts some clique or other.

Try even today, with all the time and experience the island has had to do so, to put together a real 5 star experience in anything.. To be dealt with fluently in the language of the visitor, to be picked up promptly and on time in a luxury vehicle and transported on any kind of trip or tour free of hawkers, delays, tacked on added fees that should be handled in the payment price, etc etc etc.. Its incredibly hard to achieve, yet this is what they have tried to market for decades now.

All roads lead down the same path.. More concrete, more visiting bodies, less money, more stress, etc etc.. Its not a pretty picture to me, despite it being a great island that has or had so much potential. A total lack of leadership, a lack of vision in the locals, a desire for the most for the least, a desire for everything today and to hell with tomorrow, has set it down a path that doesnt look pretty.

For sure I would put it in the rent dont buy category now.

[keestha]

My prediction is that eventually Russians will pull out of Phuket, I already see them moving to for the time being quieter locations like Khao Lak. Europeans already stopped going to Phuket in large numbers, German speakers the first to call it quits and Scandinavians the last. Now you can say what you want about Russians, but culturally they are Europeans, and they will do the same.

What is left will be Chinese, Indians and Arabs. The beer bar industry will take a hit unless they adapt in time: think Had Yai type cocktail bars where you pay the girl by the hour to sit and chat with you, and places having shows.

Asians don't seem to be so concerned about over development, think of Korean couples honeymooning in Pattaya.

[keestha]

There re a lot more Thai people opening and running successful small businesses here now

Who expats have to compete with

One Thai lady comes to mind, started with one restaurant about 7 years ago and now has

3 restaurants and 2 guest houses with family members running the different businesses

Well observed, Ned.

Back in the eighties/early nineties Thai people still didn't know how to run a guesthouse/restaurant/travel agency/beer bar for western tourists. In those days I saw people moving to Thailand and successfully open a business with very little money to start with. Nowadays as soon as the tourism takes off a little bit somewhere, there is from the beginning on a lot of competition from Thai people.

My first business in Thailand was a guesthouse/restaurant/bar I opened in Hua Hin in 1994. The first two years tourists came to have breakfast at my place in large numbers. Places they were staying didn't know how to do it yet. But the third year, game over: Thai people had learned it is not such a big deal to toast bread, and fry eggs and bacon.

[tracker1]

I went there recently, what amazed me was It had as much Russian language as Thai and the hotels drivers were to scared of the local stand over persons to pick us up when we went out

[madmitch]

I certainly wouldn't start a business here now.

I expect the European middle market to reduce, replaced by Russians and Asians, the backpack market will survive as long as Phi Phi remains a must-do on the backpack trail, the top end should also do OK as long as the luxury resorts can offer a top class product and these resorts don't get taken over by package tourists from Russia and China. This may be problematical for those in certain businesses such as small hotels and beer bars unless they adapt.

If you look at any large tourist-orientated business to open in the past couple of years, mostly it seems big restaurants and latex shops, they have nearly all been aimed at these Russian and Asian customers.

Add to this the traffic and infrastructure problems, the uncontrolled development and the continued presence of mafia type operations, then I don't think the future is rosy.

[Pinot]

"What will Phuket be like in 5-10 years from now?" - Pattaya.

All concreted over and nothing left to sell to tourists but sex.

It happened there, why do people think it can not, or will not happen here?

I think you have to visit Pattaya, the sex industry has declined dramatically in the past 5 years and is now visited by families and young couples. The beach road which was predominatly bars is now major shopping malls, hotels and restaurants. I lived in Phuket pre and post tsunami leaving in 2005. Phuket does not resemble anything like then, and the prices and greed now is turning away people in their droves. I had a quick visit last year and was shocked at the changes and prices of food, enterntaiment and transport. Phuket is a lot seedier than Pattaya and this seems to be the way the island has gone, if it carrys on in that direction, yes it will be like Pattaya but Pattaya of 10 years ago

Yes, beautiful Pattaya...are you kidding me? I was there for a night a couple of months ago, wall to wall Russians. A lot seedier than Phuket? Are you blind or out of your mind? I can't imagine a worse place to spend a vacation. Live there? Ye gods.

Phuket will never be Patts, thank Buddha. Phuket has natural beauty. Once you get away from Patong, it's the best place I've found to live. The biggest issue is the uncontrolled development far outpacing the infrastructure, but you see that all over Thailand. It is discouraging to see raw sewage emptying out of the klongs onto the beaches with the rains. Pollution is the biggest issue facing Phuket and unfortunately the Thais are shortsighted and won't see this as an issue until too late.

[NamKangMan]

"What will Phuket be like in 5-10 years from now?" - Pattaya.

All concreted over and nothing left to sell to tourists but sex.

It happened there, why do people think it can not, or will not happen here?

I think you have to visit Pattaya, the sex industry has declined dramatically in the past 5 years and is now visited by families and young couples. The beach road which was predominatly bars is now major shopping malls, hotels and restaurants. I lived in Phuket pre and post tsunami leaving in 2005. Phuket does not resemble anything like then, and the prices and greed now is turning away people in their droves. I had a quick visit last year and was shocked at the changes and prices of food, enterntaiment and transport. Phuket is a lot seedier than Pattaya and this seems to be the way the island has gone, if it carrys on in that direction, yes it will be like Pattaya but Pattaya of 10 years ago

I go to Pattaya, regularly, because I have several friends who have moved from Phuket to Pattaya.

I usually fly with Bangkok Air to U-Tapao, stay a couple of days visiting them, and then a taxi to Don Muang for a visa run with AirAsia to a neighbouring country's Thai Embassy, then back to Phuket.

I was last in Pattaya a couple of months ago.

In my opinion, the sex industry has not declined there. It has increased. Your argument may have some weight if you said, "per capita" to expat and/or tourists, because they have increased, thus making the sex industry smaller, "per capita" - but certainly not in general. I know a few bar girls that moved to Pattaya, because they were not getting any customers in Phuket. What does that tell you?

There are more beer bars and go-go shows there than ever. The whole Soi Baulkow (not spelt correctly) and LK Metro area is booming now. This was never an area know for it's nightlife in the past. Walking Street is still full and a stroll down Soi 6 is still just as wild as ever. The sex industry has grown, not declined, and why shouldn't it grow, Pattaya is doing well for tourism. A couple of times I couldn't get into my usual accommodation - booked out.

The "families and young couples" you talk about are mainly Russian. I have no idea what they are being told, and sold, back in Russia, but I don't think they come to Pattaya expecting to see prostitution on the grand scale it is there, but I have seen them enjoying themselves and happy. I am sure it's interesting for them, just like it was for all of us, our first time in Pattaya.

Beach Road does have the impressive Central Festival, that is true, but there are still many bars there.

I'm no prude to the sex industry - I live in Patong, but don't mislead readers of this forum, Pattaya has a massive sex trade, and hasn't become "family friendly."

As Pattaya is a big city, crime is spread out. Your chances of becoming a victim are smaller. Phuket, as it is not so big, and has a terribly corrupt police department and judicial system, is drawing criminals to it - both foreigners and Thai's, and your chances of becoming a victim are increasing here, rapidly. If this is the "seedier" side you are talking about, then I agree with you.

It's the "big city" feel to Pattaya that I do not like, but I notice a lot of land is opening up on the fringes of Pattaya now, and whilst it's not my "Plan B" at the moment, it may be in the future. One main reason for that, it has transport. You can live on the quiet fringes of the city, and still come into town for a night out without the BS you get from a taxi or tuk-tuk driver here, or driving/riding whilst intoxicated.

"Prices" - definately Pattaya offers a better value for money holiday. Prices are considerably cheaper there, and in my opinion, service is better as well. The locals just seem friendlier and happier there - just my perception.

The word will eventually get around the emerging economy package holiday makers and they will chose Pattaya over Phuket for a cheaper holiday, or, use Pattaya as an "upgrade" in hotel quality and/or tours and shows as part of their package holiday. This meaning, they get a nicer room, or more tours and shows, for the same cost as a basic holiday to Phuket.

Your post makes me sound like I am criticizing Pattaya. I am not. Pattaya is operating better than Phuket. I have no doubt it will take tourists off Phuket in the future, if it hasn't already. As mentioned, I know it has already taken some expats away from Phuket.

Phuket is not only competing with neighbouring countries, but other destinations in Thailand.

In years gone by, Phuket was nicer than Pattaya, and therefore, could justify higher prices, but not anymore. The Europeans certainly can't see the justification in 20% to 30% higher prices in Phuket, and have left.

I can only see the day come, in the future, where the current demographic of tourist does the same, and of course, what will they do here, "money go down - put price up" which hasn't been working for them and is not going to work for them - yet, they continue. There's no future for Phuket, doing business that way, in the tourism industry.

You can sum up Phuket with the question I have asked many times and only ever received one answer to: "Name one positive thing that has been implemented on Phuket for the benefit of tourists, expats and locals in recent years?" The only answer has been so far: "Free vacinations for dogs." That sums up the Governance here.

Phuket is doing nothing to improve, therefore, is slipping backwards.

Edited June 3, 2014 by NamKangMan

[NamKangMan]

"What will Phuket be like in 5-10 years from now?" - Pattaya.

All concreted over and nothing left to sell to tourists but sex.

It happened there, why do people think it can not, or will not happen here?

I think you have to visit Pattaya, the sex industry has declined dramatically in the past 5 years and is now visited by families and young couples. The beach road which was predominatly bars is now major shopping malls, hotels and restaurants. I lived in Phuket pre and post tsunami leaving in 2005. Phuket does not resemble anything like then, and the prices and greed now is turning away people in their droves. I had a quick visit last year and was shocked at the changes and prices of food, enterntaiment and transport. Phuket is a lot seedier than Pattaya and this seems to be the way the island has gone, if it carrys on in that direction, yes it will be like Pattaya but Pattaya of 10 years ago

Yes, beautiful Pattaya...are you kidding me? I was there for a night a couple of months ago, wall to wall Russians. A lot seedier than Phuket? Are you blind or out of your mind? I can't imagine a worse place to spend a vacation. Live there? Ye gods.

Phuket will never be Patts, thank Buddha. Phuket has natural beauty. Once you get away from Patong, it's the best place I've found to live. The biggest issue is the uncontrolled development far outpacing the infrastructure, but you see that all over Thailand. It is discouraging to see raw sewage emptying out of the klongs onto the beaches with the rains. Pollution is the biggest issue facing Phuket and unfortunately the Thais are shortsighted and won't see this as an issue until too late.

"Phuket will never be Patts"

"biggest issue is the uncontrolled development far outpacing the infrastructure"

"It is discouraging to see raw sewage emptying out of the klongs onto the beaches with the rains."

"unfortunately the Thais are shortsighted and won't see this as an issue until too late."

Ahhhh, if "Phuket will never be Patts" - with what you describe, what will it be in the future????

What you describe, sounds a lot like what they did to Pattaya to me.

[Guest]

5 to 10 years is relatively short timespan. I don't believe that the traffic problems are solved during this time. There will be new roads and existing ones will be widened from 2 lanes to 4 lanes (this is happening right now).

While there will be more traffic jams and at the same time more local services are being build, this will eventually separate different parts of Phuket from each other.

We'll have Southern Phuket residents who rarely visit anything north of Bypass road. There will be Pattaya like Patong. Phuket town is a little Bangkok and so on. This is already happening but I guess the trend will be stronger.

Overall we will still have plenty of green areas on the island for those who wish to see them, but maybe not so many natural beaches anymore.