what do you think about future of phuket re. recent world events?

[stevehaigh]

plunging oil prices and the rubble are a game changer for the world and here in Phuket too. what do you think is going to happen here in the next few years?

so far, i think the Russian numbers haven't gone down much since they booked their holidays months ago, but i bet new bookings are way down. and if Russian tourism is down, that got to effect Russian expats who live and work here in the tourist biz.

air fares don't seem to have dropped yet, i think the airlines are probably colluding to keep prices high as long as possible but since oil is likely to stay in the $50 / barrel range for at least a couple of years i think airfares will have to come down eventually. what will that do for tourism?

European economies are still in neutral so i doubt we'll see a big increase in Europeans even if air fares do fall. the US economy seems to be doing a lot better than most but American's don;t come to asia unless they are bombing something.

so what does that leave? the Chinese and Koreans?

Edited December 24, 2014 by stevehaigh

[bubblegum]

The Russians will be hit even harder March next year when the gas price follows the oil (usually 6 months behind oil price changes).

I also believe that one day soon the Chinese bubble will burst and the yuan will free fall.

[stevenl]

Airlines bought their kerosine already a long time ago. I would presume they are buying much more now also to be used now, and keep their higher priced kerosine in stock. So we'll just need a bit of patience, but prices will drop.

I think already in February-March-April this year we'll see more westerners return.

[NamKangMan]

There are not only "recent world events" to consider, there are also local and regional issues to consider as well.

Some examples are:

A certain revered Thai man is not getting any younger.

There is currently no democratically elected Government in power in Thailand at the moment, and as soon as an election date is announced, protests and/or riots will start, yet again.

The AEC starts in 2015.

Competition for Thailand's tourist income is rapidly growing from neighbouring countries, particularly from Vietnam.

[stevehaigh]

Airlines bought their kerosine already a long time ago. I would presume they are buying much more now also to be used now, and keep their higher priced kerosine in stock. So we'll just need a bit of patience, but prices will drop.

I think already in February-March-April this year we'll see more westerners return.

do airline buy and stockpile fuel? i always assumed they bought it at the local price of whatever airport the plane happens to be at. hard to imagine all the different airlines having their own private fuel bunkers at all the worlds major airports. but i have no idea, maybe they do.

[2fishin2]

Airlines bought their kerosine already a long time ago. I would presume they are buying much more now also to be used now, and keep their higher priced kerosine in stock. So we'll just need a bit of patience, but prices will drop.

I think already in February-March-April this year we'll see more westerners return.

Aircraft dont use "kerosine" they use "aircraft fuel" completely different. Also, airlines use many different methods to purchase fuel with "hedging" which you are referring to being only one.

The Russian drop is dramatic. I live in a condo where many nationalities stay. The Russian brigade is noticeably fewer this year. There are some "long termers" but the vacation tourists are not here this year. A loss of 50% in value is a substantial loss which many people cannot afford.

[NamKangMan]

Airlines bought their kerosine already a long time ago. I would presume they are buying much more now also to be used now, and keep their higher priced kerosine in stock. So we'll just need a bit of patience, but prices will drop.

I think already in February-March-April this year we'll see more westerners return.

Aircraft dont use "kerosine" they use "aircraft fuel" completely different. Also, airlines use many different methods to purchase fuel with "hedging" which you are referring to being only one.

The Russian drop is dramatic. I live in a condo where many nationalities stay. The Russian brigade is noticeably fewer this year. There are some "long termers" but the vacation tourists are not here this year. A loss of 50% in value is a substantial loss which many people cannot afford.

"A loss of 50% in value is a substantial loss which many people cannot afford." - I expect to see many Russian expats return home, thus, adding more properties on the market for sale.

[KarenBravo]

Enjoy cheap oil prices whilst you can. Another year to 18 months it will be close to US$100 a barrel again.

Russian ranks have already been thinned. You can see this at Villa Mart. Have a Russian works house close by. Used to be five or, six of them sharing. Now only three.

Chinese tourists will increase due to easier visa regulations and a raft of airlines planning on more direct flights from China to Phuket.

Australian tourist numbers will go down drastically in 2015 due to the relative collapse of the A$ which the Aussie government want to see even lower than it is today.

Within another couple of years, the Indian mass tourist market will start.

It's too late to get back the quality European tourists, they're not coming back.

[NamKangMan]

Enjoy cheap oil prices whilst you can. Another year to 18 months it will be close to US$100 a barrel again.

Russian ranks have already been thinned. You can see this at Villa Mart. Have a Russian works house close by. Used to be five or, six of them sharing. Now only three.

Chinese tourists will increase due to easier visa regulations and a raft of airlines planning on more direct flights from China to Phuket.

Australian tourist numbers will go down drastically in 2015 due to the relative collapse of the A$ which the Aussie government want to see even lower than it is today.

Within another couple of years, the Indian mass tourist market will start.

It's too late to get back the quality European tourists, they're not coming back.

"It's too late to get back the quality European tourists, they're not coming back." - I agree KB.

It's interesting - 2 years ago if you made a comment like that, or similar, you were labled a "doomsdayer" or a "Phuket basher." I know, because I was often called this.

Now, look where Phuket, is at.

They didn't care about the rip offs, scamming, crime, violence, assaults, road deaths etc of the western tourists, because the Russians and Chinese will just take their place.

Now, the Russians are drying up very quickly, and that only leaves the Chinese money, which is negligible.

[KarenBravo]

.......and when they are left with just the Chinese, Indian and Korean mass tourist markets and Thai businesses start to fold, who will they blame?

Certainly not themselves. They'll blame the government.

[Bogan Koori]

The Ruble has bounced back 10% after the banks raised their interst rates to 17%. Thats also since been lowered back down to 5%. The Russkies will still keep coming.

The Aussie Dollar is always up and down. Australians couldn give 2 hoots if its a 10% difference in price. Most of the Aussies these days are on good salaries and dont bother with looking at exchange rates before holidaying. They hardly make up the smelly back packer crowd.

This stuff happens every year. There has been a Tsunami, 2 Millitary coups, a global financial crisis, riots in Bangkok etc etc etc. And you know what? It will happen before next high season too...this is what happens with tourist towns. Many variables affect how many tourists will come.

My prediction, pretty much as the same as the last 10 years

Enjoy cheap oil prices whilst you can. Another year to 18 months it will be close to US$100 a barrel again.

Russian ranks have already been thinned. You can see this at Villa Mart. Have a Russian works house close by. Used to be five or, six of them sharing. Now only three.

Chinese tourists will increase due to easier visa regulations and a raft of airlines planning on more direct flights from China to Phuket.

Australian tourist numbers will go down drastically in 2015 due to the relative collapse of the A$ which the Aussie government want to see even lower than it is today.

Within another couple of years, the Indian mass tourist market will start.

It's too late to get back the quality European tourists, they're not coming back.

"It's too late to get back the quality European tourists, they're not coming back." - I agree KB.

It's interesting - 2 years ago if you made a comment like that, or similar, you were labled a "doomsdayer" or a "Phuket basher." I know, because I was often called this.

Now, look where Phuket, is at.

They didn't care about the rip offs, scamming, crime, violence, assaults, road deaths etc of the western tourists, because the Russians and Chinese will just take their place.

Now, the Russians are drying up very quickly, and that only leaves the Chinese money, which is negligible.

[jpeg]

Russian ranks have already been thinned. You can see this at Villa Mart.

Yes, my trips to Villa have been greatly enhanced by the reduced numbers of loud mouthed Russians barging their way through the aisles. Silver linings and all that

Edited December 24, 2014 by jpeg

[stevehaigh]

Enjoy cheap oil prices whilst you can. Another year to 18 months it will be close to US$100 a barrel again.

not sure about $100 in 18 months but without doubt it will have to go back up sometime. i'm waiting for it to get into the $30-40 range then i'll buy oil ETFs

[madmitch]

Airlines bought their kerosine already a long time ago. I would presume they are buying much more now also to be used now, and keep their higher priced kerosine in stock. So we'll just need a bit of patience, but prices will drop.

I think already in February-March-April this year we'll see more westerners return.

What makes you think that?

Personally I believe that Thailand is rightly no longer considered an exotic destination for most. It's become very mainstream and easily accessible. Even backpackers are spurning Thailand now.

I agree with KB and NKM regarding the Russians. Speaking to a Russian restauranteur yesterday, his takings are well down this season and he expects the Russian numbers to plummet further still. We are getting regular cancellations from Russia.

Phuket and Thailand have recovered from catastrophic events in the past but this is different. It's not just a single event that we're talking about this time around.

Traffic, scams, prices, lack of public transport, no sunbeds, destruction of areas of natural beauty, overcrowded day-trips, accidents, crime and violence, pollution, a proliferation of concrete monstrosities springing up everywhere, martial law, restrictions on free speech, corrupt police and officials. All of this is well-documented online and in the press for all to read.

Being in the tourist industry I hope I'm wrong but I can only see Western tourist numbers slowly diminishing for the foreseeable future.

[jabis]

The Ruble has bounced back 10% after the banks raised their interst rates to 17%. Thats also since been lowered back down to 5%. The Russkies will still keep coming.

The Aussie Dollar is always up and down. Australians couldn give 2 hoots if its a 10% difference in price. Most of the Aussies these days are on good salaries and dont bother with looking at exchange rates before holidaying. They hardly make up the smelly back packer crowd.

This stuff happens every year. There has been a Tsunami, 2 Millitary coups, a global financial crisis, riots in Bangkok etc etc etc. And you know what? It will happen before next high season too...this is what happens with tourist towns. Many variables affect how many tourists will come.

My prediction, pretty much as the same as the last 10 years

Enjoy cheap oil prices whilst you can. Another year to 18 months it will be close to US$100 a barrel again.

Russian ranks have already been thinned. You can see this at Villa Mart. Have a Russian works house close by. Used to be five or, six of them sharing. Now only three.

Chinese tourists will increase due to easier visa regulations and a raft of airlines planning on more direct flights from China to Phuket.

Australian tourist numbers will go down drastically in 2015 due to the relative collapse of the A$ which the Aussie government want to see even lower than it is today.

Within another couple of years, the Indian mass tourist market will start.

It's too late to get back the quality European tourists, they're not coming back.

"It's too late to get back the quality European tourists, they're not coming back." - I agree KB.

It's interesting - 2 years ago if you made a comment like that, or similar, you were labled a "doomsdayer" or a "Phuket basher." I know, because I was often called this.

Now, look where Phuket, is at.

They didn't care about the rip offs, scamming, crime, violence, assaults, road deaths etc of the western tourists, because the Russians and Chinese will just take their place.

Now, the Russians are drying up very quickly, and that only leaves the Chinese money, which is negligible.

Ruble bounced back from it's historic low, not by just the interest rate, but the the central bank of moscow starting to sell gold and other federal reserves to artificially stabilize the currency - and no it won't go back up to where it stood - not in a long time - or not as long as the whole of "western" front, with the allies from middle-east, are at sanctioning mode. Everybody non-aligned with Moscow is hitting where it hurts - in the pocketbook.

As to AUD, Not saying jack about it, as it is not my pancake roll.

EDIT: Added the exchange rates per 10 years to the discussion, to point out it's not a yearly thing

Edited December 24, 2014 by jabis

[NamKangMan]

The Ruble has bounced back 10% after the banks raised their interst rates to 17%. Thats also since been lowered back down to 5%. The Russkies will still keep coming.

The Aussie Dollar is always up and down. Australians couldn give 2 hoots if its a 10% difference in price. Most of the Aussies these days are on good salaries and dont bother with looking at exchange rates before holidaying. They hardly make up the smelly back packer crowd.

This stuff happens every year. There has been a Tsunami, 2 Millitary coups, a global financial crisis, riots in Bangkok etc etc etc. And you know what? It will happen before next high season too...this is what happens with tourist towns. Many variables affect how many tourists will come.

My prediction, pretty much as the same as the last 10 years

Enjoy cheap oil prices whilst you can. Another year to 18 months it will be close to US$100 a barrel again.

Russian ranks have already been thinned. You can see this at Villa Mart. Have a Russian works house close by. Used to be five or, six of them sharing. Now only three.

Chinese tourists will increase due to easier visa regulations and a raft of airlines planning on more direct flights from China to Phuket.

Australian tourist numbers will go down drastically in 2015 due to the relative collapse of the A$ which the Aussie government want to see even lower than it is today.

Within another couple of years, the Indian mass tourist market will start.

It's too late to get back the quality European tourists, they're not coming back.

"It's too late to get back the quality European tourists, they're not coming back." - I agree KB.

It's interesting - 2 years ago if you made a comment like that, or similar, you were labled a "doomsdayer" or a "Phuket basher." I know, because I was often called this.

Now, look where Phuket, is at.

They didn't care about the rip offs, scamming, crime, violence, assaults, road deaths etc of the western tourists, because the Russians and Chinese will just take their place.

Now, the Russians are drying up very quickly, and that only leaves the Chinese money, which is negligible.

I disagree.

"My prediction, pretty much as the same as the last 10 years." - not this time around, BK.

The west have put tight sanctions on Russia, so, regardless of what they do with their interest rates and domestic economy, it's illegal for western companies to trade and/or invest in Russia. That leaves them "out in the cold" again. (pun intended)

The Australians have been, and will continue to compare the prices of Phuket, to those of Bali, which has well and truly bounced back since the bombings.

Bali currently provides a better value for money holiday for Australians, so, I think you will see Australians chose Bali over Phuket in the future, if they haven't been already.

"There has been a Tsunami, 2 Millitary coups, a global financial crisis, riots in Bangkok etc etc etc" - and this is the same BS that the TAT keeps coming up with. It's everyone elses, or everything elses, fault.

They just will not face the fact that Phuket now offers an inferior holiday product, at a premium holiday price, when compared to its competitors, thus, it is quickly losing market share, and the local Phuket economy is bleeding out.

[littleboylost]

NKM: It is not illegal for European or North American companies to trade with Russia. There are restrictions on dealing with certain companies and individuals mostly in the financial sector but in general the imposed sanctions are aimed at Putin and his cronies.

[schlog]

They just will not face the fact that Phuket now offers an inferior holiday product, at a premium holiday price, when compared to its competitors, thus, it is quickly losing market share, and the local Phuket economy is bleeding out.

+1

Since some years HKT is no longer worth the price and the hassle.

Some services are on the same price level like in Singapore but the quality of the services are 3 stars inferior.

Living here now more then 22 years, my opinion about HKT as a place to live droped from 'perfect' to 'ok'.

As a tourist i would not come here any more since 10 years.

[NamKangMan]

NKM: It is not illegal for European or North American companies to trade with Russia. There are restrictions on dealing with certain companies and individuals mostly in the financial sector but in general the imposed sanctions are aimed at Putin and his cronies.

I take your point, lbl, however, the some of the sanctions are firmed directed at the Russian financial sector, the banks.

It's a little hard to do business and trade if you can't "bank" with the company / country you are dealing with.

Do you suggest they Western Union the money?

[littleboylost]

NKM:

You can still transfer funds in to Russia as long as the companies you are dealing with are not on the sanctions list. Also a lot of the large Russian conglomerates have their own sales and trading offices in Europe and North America that can handle the financial aspects of any transaction. They are set up this way so they can keep funds in Dollars or Euros outside of Russia. Remember the financial crisis in Cyprus awhile ago where millions of Euros were wiped out of Russian owned bank accounts.

[ExPratt]

12 years ago I liked the place , so I'm not sure if Ive changed or Phuket has changed. I just find it a rip off and the Hotels there don't really try to cover up that fact. Horrible place now , with bad atmosphere . I was there during Tsunami so maybe that has something to do with it also

[Seligne2]

Airlines bought their kerosine already a long time ago. I would presume they are buying much more now also to be used now, and keep their higher priced kerosine in stock. So we'll just need a bit of patience, but prices will drop.

I think already in February-March-April this year we'll see more westerners return.

Aircraft dont use "kerosine" they use "aircraft fuel" completely different. Also, airlines use many different methods to purchase fuel with "hedging" which you are referring to being only one.

The Russian drop is dramatic. I live in a condo where many nationalities stay. The Russian brigade is noticeably fewer this year. There are some "long termers" but the vacation tourists are not here this year. A loss of 50% in value is a substantial loss which many people cannot afford.

Jet fuel A and jet fuel A-1, the most commonly used, are classed as "kerosene-type jet fuels". Airlines do not store fuels in huge tank farms. They buy fuel for the future using hedged futures contracts.

[NamKangMan]

NKM:

You can still transfer funds in to Russia as long as the companies you are dealing with are not on the sanctions list. Also a lot of the large Russian conglomerates have their own sales and trading offices in Europe and North America that can handle the financial aspects of any transaction. They are set up this way so they can keep funds in Dollars or Euros outside of Russia. Remember the financial crisis in Cyprus awhile ago where millions of Euros were wiped out of Russian owned bank accounts.

That sanction list is only going to get longer, and longer.

What company would invest in Russia whilst there are sanctions in place????

[2fishin2]

Airlines bought their kerosine already a long time ago. I would presume they are buying much more now also to be used now, and keep their higher priced kerosine in stock. So we'll just need a bit of patience, but prices will drop.

I think already in February-March-April this year we'll see more westerners return.

Aircraft dont use "kerosine" they use "aircraft fuel" completely different. Also, airlines use many different methods to purchase fuel with "hedging" which you are referring to being only one.

The Russian drop is dramatic. I live in a condo where many nationalities stay. The Russian brigade is noticeably fewer this year. There are some "long termers" but the vacation tourists are not here this year. A loss of 50% in value is a substantial loss which many people cannot afford.

Jet fuel A and jet fuel A-1, the most commonly used, are classed as "kerosene-type jet fuels". Airlines do not store fuels in huge tank farms. They buy fuel for the future using hedged futures contracts.

Its Jet A-1 and Jet B and no they dont all use hedging as a means of contracting and purchase.

[me313]

Phuket is going to become a much more expensive place to live for both ex-pats living here as well as the local Thai population. As emphasis shifts from attracting a volatile and unstable short-term tourist market, focus will concentrate on long-term investment strategies with the aim of bringing in corporate entities to settle and operate in Phuket. Accordingly, property prices will exponentially soar (this might take a few more years to go into effect). The demographic might shift, as the local Thai population who cannot keep up with inflated prices move out, and more well-off ex-pats and other more affluent nationals will move in with their operations based out, or partially out of, Phuket.

I further predict that the fantastic relatively new string of luxury hotels lining the beach cliff areas of Phuket will host conferences, hosted by some of these corporate concerns. There might be international expos, and things like that. I think this transition from a middle-value tourist market to high-end corporate investment has been a coveted goal for a while now in the inner circles of those who plan such transitions in the Phuket economy. The loss of the unstable Russian, Australian and backpacker tourist groups and the revenues the now disenfranchised or slowly deteriorating local economy has enjoyed for a few decades will be superceded by the much more lucrative corporate run by a more tight corporate group in a partial partnership with the larger ASEAN community. You may see more high rises and business offices in the coming years as well. I think the plan is to eventually try to create another semi-Singapore type of community here in Phuket.

Edited December 24, 2014 by me313

[oztaurus]

Enjoy cheap oil prices whilst you can. Another year to 18 months it will be close to US$100 a barrel again.

not sure about $100 in 18 months but without doubt it will have to go back up sometime. i'm waiting for it to get into the $30-40 range then i'll buy oil ETFs

http://www.oil-price.net/en/articles/lower-bound-of-oil-prices.php

This explains in a fair bit of detail the supply-side issues which make that scenario unlikely. With a bit of spare cash you could, however, play with CFD's and options as insurance. If you get the balance right the only way you don't make money is if the price of oil remains stable over the contract period.

[Altalake]

OK Guys, where will one go for sun from Northern Europe?

West Indies? Three times the price, often hostile people - and pretty ordinary food.

Mediterranean ---- too cold.

East Africa - can be dangerous and costly.

Sri Lanka/Goa - nice enough, but beaches nowhere near as nice as Phuket, and food not so good.

Hawaii - forget it.

Viet Nam? Well, in the south it is OK-ish - but Hanoi is cold.

Lotsa luck, we like it here in Paradise-Phuket.

[timewilltell]

We are n for a time of global volatility as the financial turmoil begins to unwind. Medicine has been prescribed but the sickness gas not been treated. It will wreak havoc and places like little Thailand with their government of me first will be hit hard. Phuket is a cesspit of corruption much like the Costa Del a Sol used to be but eventually karma comes a knocking. It knocked already just everyone is deaf.

[me313]

Due to internet interference, I tried editing my post above and was unable to, and because I spent time trying to fight the internet disruption (due to my local WiFi connection) that put so much of what I had written into a shortened version of what I'd like to add to the post, I'm going to repost--I see that I cannot even delete what I had written above, but I feel determined. I also want to add that I used to live in Miami, in the area called South Beach. I witnessed what was a more quiet but tourist-based economy become an international party scene investment community, which has proven to be a bonanza for some investors, but for the people who used to enjoy peaceful quiet mornings on the beach and a more unique and interesting scene, it turned into a corporate venture that has made that area lose it's former charm. I see the tell-tale signs here in Phuket, so from the many recent developments I read of, I see emerging the same sort of pattern. The world is turning into a global corporate enterprise, or I see it's tentacles reaching here. So, I repost with a few additional flourishes to my two paragraphs above:

Phuket is going to become a much more expensive place to live for both ex-pats living here as well as the local Thai population. As emphasis shifts from attracting a volatile and unstable short-term tourist market to high-end corporate and Real Estate investment and development, focus will concentrate on long-term investment strategies with the aim of bringing in these corporate entities to settle and operate in Phuket. Accordingly, property prices will exponentially soar (this might take a few more years to go into effect). The demographic might shift, as the local Thai population who cannot keep up with inflated prices move out, and more well-off ex-pats and other more affluent nationals will move in with their operations based out, or partially out of, Phuket.

I further predict that the fantastic, relatively new string of luxury hotels lining the beach cliff areas of Phuket will host conferences by some of these corporate concerns. There might be international expos, or other global marketing conferences. There may be a shift to attracting high tech operations into Phuket to form a new Asian high-tech sector. Much more of the newly built beach-front property that lines the Andaman Coast from Nai Harn to Surin will acquire a high-end retail and business office look and feel. This has already begun many years ago, but I believe the shift from tourism to corporate and high-end Real Estate will hold precedence. I think this transition from a middle-value tourist market to high-end corporate investment has been a coveted goal for a while now in the inner circles of those who plan such transitions in the Phuket economy. It seems apparent when I observe how local poorer entrepreneurs who had run family businesses along the beaches are now deemed an eye-sore, as they lose their former livelihoods so the beaches can become pristine and devoid of unsightly shacks and umbrellas. This will make reclining on the beach after a days' work at the new corporate structures for the upcoming long-term corporate investors more attractive. The now disenfranchised or slowly deteriorating local economy which has enjoyed operating on beaches will be superceded by the much more lucrative corporate structure. I can see many changes in the political and local government offices such as the police, as some offices are being shifted to specialized units or other merging into a larger more centralized structural form. This will make for a more efficient corporate structure, albeit I think labor laws will somehow be pushed to the outer rim of concern as centralization for profit will be the prime focus. All will be partially run or controlled in other partnerships by a more tight corporate group widely dispersed within the ASEAN community.

[billythehat]

Enjoy cheap oil prices whilst you can. Another year to 18 months it will be close to US$100 a barrel again.

Russian ranks have already been thinned. You can see this at Villa Mart. Have a Russian works house close by. Used to be five or, six of them sharing. Now only three.

Chinese tourists will increase due to easier visa regulations and a raft of airlines planning on more direct flights from China to Phuket.

Australian tourist numbers will go down drastically in 2015 due to the relative collapse of the A$ which the Aussie government want to see even lower than it is today.

Within another couple of years, the Indian mass tourist market will start.

It's too late to get back the quality European tourists, they're not coming back.

“It's too late to get back the quality European tourists, they're not coming back.”

Shoo nuff, guv. I’ve never seen Patong so quiet at Kitmath time; empty beaches, soi’s, bars and worried hotel owners.