Asia’s surging China syndrome is reshaping the Phuket tourism market with one in four international visitors now coming from the Mainland. According to new data released by consulting firm C9 Hotelworks, in the first half of 2013 the resort island attracted nearly half a million Chinese travelers, up from less than 40,000 in 2007. Airlift is a key catalyst with surging numbers of direct flights between Phuket and Mainland cities, which now stands at 22 versus only seven only five years ago.
As Thailand’s booming travel sector witnessed 12.7 million overseas arrivals for the period January through June, China alone excluding the SAR has claimed 18% of the total market. “For the first time travelers from legacy markets such as Western Europe no longer present in the Top 5 arrivals. What has replaced them are Asian regional travelers and the emerging Russian segment,” said C9’s Managing Director Bill Barnett.
C9 is forecasting a record high three million international visitors for the full year 2013 with the duo of China and Russia boosting 44% of the total overseas volume at the end of June. “The mantra of demand is clearly Thailand’s strategic location in the sweet spot ‘window’ of six hours and under airline travel time,” Barnett said.
While there have been concerns voiced by the local travel industry over low-end mass tourism, hotel trading figures remain strong. C9’s report shows that mid-year Phuket market wide occupancy stood at 76%, which is the highest level since 2008. More importantly average rates year-on-year rose by 7% for the same period.
“We looked inside the numbers and spoke to hoteliers regarding the trend of Eastern European tourists upgrading room categories or using higher rated hotels, which is on the way up,” Barnett added. “This is apparent in the performance of the upscale tier and beach specific west coast locations where room rates have ticked higher.”
One by-product of the Asian economic influence noted by C9 is a series of new hotel branded real estate projects, which have tapped into the Thai domestic and regional buying pool. Barnett said properties that in the past attracted end-users are now focusing on investment buyers. “Though a sign of the times is unit downsizing and lower price points, which in the branded condominium/apartment segment averages just over US$4,300 per square meter,” he said.