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2 Jun 2008


Active Phuket Tourism Likely Generating THB110 Billion in 2008 (Business Brief No.2184)

One year on after the Tsunami disaster, tourism in Phuket has returned to normalcy. The resort island has emerged as a world-class seaside resort destination that has gained popularity with affluent tourists, especially those from Europe. It could be said that the Tsunami disaster was a blessing in disguise for Phuket tourism, thanks to global news coverage about the natural disaster and ongoing efforts from the public and private sectors to promote tourism venues along the Andaman coast.
Among the favorable factors for Phuket tourism are attractive beachfronts, a comparatively lower cost of living than other seaside resorts elsewhere and development of Phuket International Airport to boost its passenger handling capacity to cope with a rising number of tourists traveling by plane to the resort island. The fast growing tourism and real estate markets in Phuket can be attributed to several factors, as summarized in the following notes:
- Expansion of foreign investment into real estate and hotel businesses, including world-class hotel chains that have branched out into Thailand
- The price of real estate in Phuket, albeit being on the rise, is still one-quarter to one-third of the prices seen many countries including Spain, Italy and France. This has drawn affluent Europeans to buy property on the resort island both for investment and for vocation homes.
- Expansion in sales and marketing management of foreign hotel chains into the local hotel business, focusing on key tourism locations.
- Reemergence of time sharing business, especially in local seaside venues, especially the development of the new concept of ;fractional ownership for vacation homes” which will offer greater choices for those who want to acquire resort spaces for occasional stay.
KASIKORN RESEARCH CENTER (KResearch) forecasts that tourist arrivals to Phuket in 2008 may total some 5.6 million, up 12 percent over 2007, thus generating income of some THB110 billion to related businesses on the island, up 17 percent over the year before. Among the main beneficiaries will be:
- Accommodation: Of the total amount, twenty-eight percent – around THB31 billion – will go to more than 630 hotels and resorts in Phuket with a total of 38,000 rooms.
- Food and Beverages: Seventeen percent – around THB19 billion – will likely go to restaurants in Phuket.
- Shopping: Sixteen percent – around THB17 billion – will go to souvenir shops, including those selling gems and jewelry, cotton and batik products, mother of pearl adornments, pewter and other handicrafts and/or indigenous food products.
- Entertainment and Recreation: The thirteen percent – around THB14 billion – will go to entertainment venues, sporting services, e.g., diving, golf, health-related services, especially spas and Thai massage services.
Amid the fast-growing Phuket tourism, a huge number of tourists have flocked to the resort island each year. This has resulted in several problems that need urgent attention from the public and private agencies concerned. If these problems are left unresolved, the global image of Phuket may be put in jeopardy. The pressing issues include encroachment on land, destruction of natural resources, garbage disposal and water pollution, infrastructure falling short of rising demand – especially water supply and public medical services. Other problems include untidiness at Patong Beach and insufficient facilities during high season, i.e., car parking spaces for tourists, because of the number of rented cars parking along both sides of the road, plus untidiness of entrepreneurs offering beachfront services such as deckchair seating, beverage vendors, etc., as well as complaints from tourists about unfair services by jet ski and tuk-tuk operators, and so forth.

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