Phuket’s accommodation market is predicted to face stress in the short- to medium-term with soaring hotel supply expected to be challenged by declining tourism demand, according to new analysis by C9 Hotelworks.
The Thai resort destination has a development pipeline of 15,348 keys set to enter the market over the next five years, which represents an 18% push in total supply, C9’s Phuket Hotel Market Update Mid-Year Edition revealed.
During the first four months of 2019, considered a high season, year-on-year international passenger arrivals at Phuket International Airport slipped by 3%, while the domestic segment was down 6%.
A boat accident in Phuket that claimed the lives of Chinese tourists had prompted a sharp decline in arrivals in the second half of 2018 after a record first half of the year.
Mainland China remains at the forefront of any discussion about Phuket and the segment continues to be volatile with a 19% decrease registered this year from January through May. Russian arrivals have also declined.
On the upside, the fast-growing Indian market tripled its tourism arrival trajectory during the same period versus 2018.
Hotel performance has mirrored the current trend. Citing STR data, C9 says there is a 12% retraction of RevPAR, driven largely by lower market occupancy.