Increased airport arrivals boost Phuket hotels

An 11% surge in airport arrivals during the first half of 2012 for a total of 2.32 million passengers is driving the hospitality market in Phuket, Thailand, according to a new report from hospitality consulting firm C9 Hotelwords.

Top growth markets are China, Eastern Europe and Malaysia growing at 66%, 33% and 17%, respectively, versus the same period last year, according to the report.

“New airlift from Mainland China and Russia, plus the massive pickup in regional low-cost carrier flights, is driving a new era of mass tourism to the island, and the hotel sector is a clear beneficiary of the growing trend,” said C9 Hotelworks Managing Director Bill Barnett.

A rise in direct international flights is being reflected in soaring hotel occupancy rates — 75% island-wide — from January to June of this year, C9 Hotelworks said. RevPAR jumped 8%.

The C9 research also highlighted that 2012 hotel transaction levels are expected to top US$315 million. Between now and 2015, 5,080 new rooms are under development in Phuket, which will increase total inventory by 11%.

However, Barnett also identified potential future obstacles to smooth development. “The island continues to face both a mounting infrastructure dilemma and lacks a clear-cut long-term tourism plan,” he said. “This can perhaps be best demonstrated by the delayed upgrade plans at the gateway Phuket International Airport. With the expansion plan now expected to be completed by 2015, assuming an average annual growth rate of 5%, the expanded airport would hit capacity by 2017. Essentially this equates to a scenario of a new facility being dead on arrival.”