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20 Sep 2007


One-Two-Go Crash…No Impact Seen on Phuket Tourism: Income Expected to Top THB90 Billion in 2007 (Business Brief No.2041)

Air travel has gained greater popularity among travelers thanks to its speed and convenience. This mode of transportation also requires relatively low expenses (if travelers choose to fly with no-frills airlines). Based on statistics of Tourism Authority of Thailand (TAT) on Phuket tourism in 2006, it was found that tourist arrivals in Phuket via air accounted for 46 percent of the number of tourists visiting the Island province, totaling 4,499 million, more than doubling the record in 2005. Of these, 1.506 million were foreign visitors. Seventy-seven percent of them flew directly from abroad to Phuket while the rest used domestic flights to visit the province.
Meanwhile, around 40 percent of Thai tourists visiting Phuket, totaling 1.617 million went there by their own cars, followed by plane, 35 percent in 2006.
The horrendous air crash of One-Two-Go aircraft veering off the runway at the Phuket International Airport on September 16, 2007 left 89 passengers dead and 41 others injured. The fatal accident is expected to deal a severe blow to travelers' confidence in air travel with low-budget airlines. Still, the impact is expected to be felt only short-term or during the off-peak period for tourism along the Andaman coast.
Even so, confidence towards air travel safety is likely to be restored soon if both full-service carriers and low-cost airlines including airports adopt more stringent safety measures in times of volatile weather. Also, checking on readiness of aircraft equipment before each flight should be strictly undertaken to ensure safety standards. In so doing, the high tourism season, starting in November 2007 is likely to become more active at the Andaman coastal tourist venues, particularly, in Phuket – the center of tourist attraction.
Tourism in Phuket has clearly tended to recover since the end of 2006 continuing to 2007 due to the driving force from the growth of foreign tourist market most of whom try to avoid the earthquake-risk Bali in Indonesia. So more of them have turned to tourist sources in Thailand's Andaman coast instead, which is a good outcome for tourism in Phuket, Krabi and Phangnga.
KASIKORN RESEARCH CENTER forecasts that in 2007, around 5.3 million tourists will travel to Phuket, increasing 18 percent from 2006. Almost 70 percent in this amount are expected to be foreign tourists, increasing 25 percent, while Thai tourists traveling to Phuket will rise only 5 percent.
Notably, foreign tourists traveling to Phuket are increasing steadily. Most of them are from far-distant markets in Europe, i.e., Germany, the UK, Russia and Sweden. Moreover other short-distant markets like Australia, South Korea, Japan and China also have an important role for Phuket tourism.
Relatively high spending of tourists both Thais and foreigners traveling to Phuket in 2007 can be expected to generate income to tourism business in Phuket to the approximate value of THB93 billion, increasing 20 percent from 2006. This is considered the first time after the Tsunami incidence that Phuket has earned tourism income higher than 2004 in which the income valued THB85,671 million.
Most of Phuket's tourism income of around THB24 billion or 26 percent tends to be dispersed to accommodation business consisting of around 60 hotels in town with totally around 4,500 rooms. Moreover there are also more than 500 hotels and resorts around Phuket beaches which have around 30,000 rooms altogether.
It is worth observing that investment in hotel business in Phuket is increasing steadily. It is projected that in 2007, hotels and resorts will total around 600 venues with around 36,000 rooms in all. However the steadily higher growth of foreign tourist markets will respectively boost the average occupancy rate of hotels in Phuket. So it is projected that the average occupancy rate of hotels in 2007 will increase to more than 60 percent against the average of only 52.24 percent in 2006.

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