According to CBRE Thailand, the number of international tourist arrivals to Phuket grew by 6.9 percent year-on-year. In the first quarter of 2014, there were 962,953 foreign arrivals, which helped insulate the island’s tourism sector.
In the first quarter, upscale hotels, defined as those with rates of over THB 2,000 per night, enjoyed average occupancy rates of over 80 percent. First-class hotels, one tier below the top tier of luxury hotels, with rates between THB 4,000 to 10,000 per night had the best REVPAR or revenue per available room.
CBRE forecasts that the total hotel supply in Phuket will increase by 4,000 keys over the next three years — a 25 percent increase in current supply. The company expects the rate of new supply to taper over this time period. There is thus the possibility that visitor arrivals to Phuket may increase at a faster rate than new hotel rooms, which means that room rates are likely to rise.
Constituting about half of the total arrivals, China and Russia were the largest feeder markets with 225,949 and 228,691 arrivals to Phuket airport, respectively, in the first quarter of this year. There was a 1.6 percent year-on-year decline in Chinese arrivals, a market that had been growing at 90 percent per year, while Russian arrivals grew by 20.4 percent year-on-year. Market research also showed that Asian feeder markets tend to be more sensitive to local political problems; other markets, such as Russia, exhibited a lack of concern about such matters.
CBRE believes that Phuket will remain one of Asia’s leading tourist destinations. The airport is being expanded, which will reduce capacity problems. While the dependence on a limited number of feeder markets increases risk, there is still potential for growth. There were about 100 million outbound Chinese tourists last year and only 4.7 million of them visited Thailand.
