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Domestic Property Buyers Swoop on Thai Resort Destinations as Second Home Market Soars

Changes in lifestyle and Covid-19 fatigue highlight a dramatic rise in urban flight

 
(left): Brennan Campbell, Co-Founder & CEO of FazWaz; (right) Boon Yongsakul, Chairman of Boat Pattana, Phuket
(left): Brennan Campbell, Co-Founder & CEO of FazWaz; (right) Boon Yongsakul, Chairman of Boat Pattana, Phuket

 
Thailand’s resort real estate markets have experienced a dramatic reset in buyer profiles over the past eighteen months of the pandemic. A strong wave of domestic demand has seen Thai’s flocking to the country’s leisure destinations and snapping up holiday or second homes.

According to new data released by Thai property portal FazWaz, the popular Thai seaside resort area of Hua Hin has seen buying interest grow significantly in year-to-date online inquiries. FazWaz Co-Founder and CEO Brennan Campbell said: “By tracking the data from Q2 2020 to mid-2021 on buying motivation of either a holiday home or for investment purposes, we can see a change in behavior towards lifestyle purchases in Phuket, Koh Samui and Pattaya, with the sharpest uptick being Hua Hin.”

In Phuket, where resort grade real estate over the past decade has been highly leveraged by foreign buyers, Boon Yongsakul, Chairman of Boat Pattana said “our Shambala luxury pool villa project in Bangtao Beach initially targeted legacy overseas buyers in the Laguna Phuket area. But by the middle of last year, we saw a strong influx of Bangkok buyers and this has continued to drive sales momentum to date”.

 
 
Hua Hin is Thailand’s leading second home resort market amongst domestic buyers
Hua Hin is Thailand’s leading second home resort market amongst domestic buyers

 

“One of the most notable characteristics in Thai buyers that has changed is the desire for resort living, quality of life, and outdoor areas. If you look back five years, island real estate was focused on investment-type condominiums, but today it’s single-family homes or second residences,” continued Mr Yongsakul.

Trying to get a fix on what is the new normal for Thailand’s resort property market, consulting group C9 Hotelworks Managing Director Bill Barnett weighed in with “Bangkok’s worsening pollution problems play a part in real estate purchase values.  Another is the pandemic ‘Zoom-factor’ that has created what we expect to be a longer-lasting trend of working from home. Real estate developers are now facing changing consumer tastes for flex-specs and recreational areas.”

The trend for buyers seeking a lifestyle reset is clear in Hua Hin where property developer Tjeert Kwant, CEO of Banyan Residences, says there has been a significant rise in buyers looking to escape the city and enjoy a more healthy, active lifestyle. “This for us has been the key driver with families and couples and looking for spacious second homes outside of Bangkok.”

Adds Brennan Campbell of FazWaz “looking at our Insights data for Hua Hin, 64% of transactions are now from the domestic market. The impact of the pandemic is going to have a lasting impact on what drives Thai’s to purchase property and there is one thing for certain, the times are changing fast, and moving out of the city at a pace we have not seen before.”

WELCOME BACK HOME. An Interactive Online Tourism Event

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Thursday 15th July | 3 pm Bangkok | 4 pm Singapore/Hong Kong | 9 am London

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Everything you need to know about Thailand’s Phuket Sandbox

 

Tourism eyes around the world are focused on the resort island of Phuket, Thailand.  In the last two weeks the reopening of international, vaccinated travel to the Phuket Sandbox has created a model for other resort destinations to restart their tourism economies. A key emerging storyline from the island’s frenzied runaway to 1st July has been the remarkable cross sector partnerships that has become a true catalyst of change. 

This timely one-hour online event is an opportunity to hear from industry experts who have been involved in the process and will be sharing their learnings. The event will also have an extensive question and answer session. The event will be particularly useful for those in the travel trade industry, media and tourism sectors given the Sandbox platform will likely emerge in other destinations. 

Speakers

Koh Samui’s Tourism Hopes Pinned on International Travelers

Sandboxes, islands, and beaches headline return of Thailand tourism

 
 
Despite the crisis, global hotel brand Kimpton is set to debut on Koh Samui at the end of 2021, showing a vote of confidence in the island’s tourism prospects in the wake of the reopening (Photo courtesy Kimpton Hotels)

 

For Immediate Release, 10th July, 2021

It’s baby steps at the moment as Thailand’s Robinson Crusoe-inspired, island-focused international travel reopening plan is set to roll out in Koh Samui on 15th July.  Unlike the Phuket Sandbox program for vaccinated travelers, the Samui Plus sealed-route will test the water with a hybrid approach of three days in a hotel quarantine scenario and then allows visitor’s island-wide free access from the fourth day onwards.

In anticipation of overseas travelers flying to the idyllic holiday island in the Gulf of Thailand over 60 hotels have been certified in the SHA Plus safety and health program according to hospitality consulting group C9 Hotelworks’ research.  Gateway carrier Bangkok Airways has confirmed three domestic daily ‘sealed route’ flights from Bangkok’s Suvarnabhumi Airport starting in the middle of the month.  International Samui Plus visitors will be required to fly via Bangkok and transit on these designated flights.

Koh Samui’s island economy is heavily dependent on tourism with over 600 registered tourism establishments and nearly 24,000 rooms. The impact of the pandemic can best be highlighted when looking at the airlift, comparing pre-pandemic 2019 and the onset and ongoing impact of Covid-19 which saw airline passenger traffic drop 64% year-on-year.

 
 
 
 
Chart 1

Speaking about the process of a gradual stepped programme for accepting overseas arrivals, C9 Hotelworks Managing Director Bill Barnett said “the learnings from the first week of the Phuket Sandbox will likely follow a similar pattern.  Over 2,300 international arrivals have come to the island with more than 140,000 confirmed hotel nights booked in SHA Plus hotels through August. Demand has remained strong and is now demonstrated, which bodes well for Koh Samui’s chances.”

He added “an ancillary impact of the Sandbox is the restoration of regularly scheduled direct flights between the two islands from 16th July starting with four flights a week this month and becoming daily in August. In analyzing tourism, we look to the sky for answers as the logical starting point, and this increased airlift is a key driver for the tourism economy.”

Moving to the outlook for the island’s lodging industry, C9 Hotelworks’ new Koh Samui Hotel Market Update points out that the likely recovery journey will be top-down, with many travelers taking advantage of competitive rates in luxury and upscale tier hotels. C9 is forecasting the short to medium-term impact to be in rising demand at the expense of room rates as travelers tend to historically trade up in post-crisis travel.

As Covid-19 has landed the tourism industry in unknown territory, leading global data group STR’s Area Director for Asia Pacific Jesper Palmqvist weighed in with “since Q2 in 2020 when the crisis started, we have seen three hotel peak periods in Koh Samui, where levels reached beyond the bare minimum – Mid-October 2020 for the long weekend, New Year’s Eve, and most recently the Songkran holiday where occupancies reached close to 50%.  These spikes in demand came from the domestic market and once the international factor comes into play, more stability will evolve.”

While Thailand’s tourism fortunes remain highly focused on islands, C9’s Bill Barnett is quick to say “it’s important to remember that Koh Samui and Phuket remain only small pieces of a bigger puzzle and that even Robinson Crusoe had to eventually get onto a raft and return to the larger world at hand. Until the entire country gets better, the sandbox remains a relatively small stage.”

Download: C9 Hotelworks Samui Hotel Market Update.

Phuket’s Tourism High-Season Hopes Shattered in Policy Flip-flop

New airport and hotel data from research group C9 Hotelworks triggers alarm bells over worsening economic outlook

Iconic Thai island destination Koh Phi Phi is a popular day trip for Phuket tourists but with borders closed, hotels and tourism businesses remain empty. Image courtesy of Vertigo Video Productions Phuket
Iconic Thai island destination Koh Phi Phi is a popular day trip for Phuket tourists but with borders closed, hotels and tourism businesses remain empty. Image courtesy of Vertigo Video Productions Phuket

 

For Immediate Release, 10th November, 2020

Phuket: Thailand’s leading resort island Phuket has come face-to-face with the reality that it’s tourism high-season will not see a marked reopening to overseas travelers. In the wake of the dismantling of the ‘Phuket Model’ and refocus by the government on using Bangkok as a single international gateway, there is increasing alarm over the lack of a path forward for the island’s rice bowl – tourism.

The key tourism indicator for the island is airlift and Phuket International Airport is the gateway for 70-80% of visitors to the destination. According to Airports of Thailand data, 121,530 passengers arrived in the month of September. This equates to just over 4,000 arrivals a day and a portion of these include local residents and business people. Comparing year-on-year data, 2019’s daily arrivals which included international travelers was five times higher.

Commenting on the toxic situation, hospitality consulting group C9 Hotelworks Managing Director Bill Barnett says “there is a dramatic change in the market mix where the current domestic-led average length of stay for hotels is approximately 1.8 days, while for foreign travelers it’s more than double this amount. What this means for hotels is severely reduced overall demand across the island’s entire accommodation sector.”

Phuket International Airport PAssenger Arrivals January - September 2020

Looking forward to the high season when the numbers spike upwards in the four months of December through March, the high season months last year equated to more than one-third of annual demand.  Total domestic and international arrivals at the airport totaled just over 9 million in 2019.  Adding in high season shoulder months into the equation, the stark economic impact of Phuket’s economic seasonality is reflected in the fact that well over half of the island’s tourism arrivals are packed into a six-month period.

Now, nearly two months into that timeframe, what is apparent is it’s virtually impossible to save the high season and hotel owners in 2021 will be forced to contend with historically the lowest trading months of the year by May. Given these grim prospects, C9 is predicting large-scale job losses and business closures given there is no light at the end of the pandemic-induced tunnel.

“Taking a 360-degree view on the restricted domestic-only demand, you have to take into account that Phuket’s current registered accommodation supply has continued to surge to its present size of 90,267 rooms in 1,773 hotels/tourism establishments” adds Barnett. “Of this supply upper midscale, upscale, and luxury properties of international standards are approximately 25% of the total rooms.”

Data from leading data intelligence provider STR daily has Phuket occupancy averaging 10% with upward spikes on weekends at international standard hotels. Looking into the number though, the reality is domestic travelers are cashing in on cheap deals at upscale and luxury hotels.  Given limited visitor arrivals the far larger mid and economy tiers where most of the hotel inventory sits, are experiencing even lower occupancy. This domino effect is expected to prevail unabated throughout a sustained downturn and effectively crushes the smaller properties and local tourism businesses.

As Thailand’s government policy has maintained Bangkok as the sole entry point for a limited number of travelers from overseas under the Alternative State Quarantine (ASQ) program, a number of hotels in all tiers are operating under the scheme. Hotel performance data for Bangkok from STR is reflecting occupancy just above 25% for international standard hotels, though again in the broader marketplace demand is at considerably lower levels.

In Phuket, many hotels pinned high-season hope on the now-aborted ‘Phuket Model’ to allow Special Tourist Visa’s (STV’s) aimed at long-staying visitors, which is logical given the island’s legacy winter ‘snowbird’ market from Northern Europe and Russia. Putting the Alternative Local State Quarantine program at the head of the reopening tourism initiative, 17 Phuket hotels have been approved and 21 applications are under process. Properties who have undertaken both the expense and time in qualifying for the status have been shut-out, given the government’s about-face policy of centralizing all overseas arrivals into Bangkok.

What is unclear is the logic in policy flip flop on negating the island’s essential tourism lifeline. Using smaller contained resort-focused islands would appear a logical risk mitigation strategy that was echoed in all of the hype over the ‘Phuket Model’ but after the dust has settled, it ultimately failed to launch.

The time has come that Thailand must gain confidence from international benchmarks, such as  the tourism dependent Maldives. According to data from the nation’s Ministry of Tourism, in October the destination recorded 21,514 tourist arrivals. This trend is again on the rise in November and looking back the country has safely managed the reopening of its borders since mid-July. Another nearby island, namely Singapore is set to put an overseas travel bubble into place within this month to Hong Kong (SAR).

Putting Phuket’s economy debacle into perspective C9’s Bill Barnett says “losing this high-season will further intensify the catastrophic impact on the island’s business owners and the livelihoods of the vast majority of residents. Given the sheer size of the hotel inventory, it cannot survive only on domestic visitors, cheaper airfares, or by adding more public holidays. For Phuket, this high season, faced with the prevailing arithmetic the island can only wait and wonder what comes next.”

Global Hotel Chains Refocus to Management-Light Approach to Weather COVID Storm

Soft Brands, Franchising and Third-Party Hospitality Operators Rising in Across Southeast Asia

 

SAii Lagoon Maldives
SAii Lagoon Maldives, Curio Collection by Hilton is a highly successful example of a soft brand in action

For Immediate Release, 5th November, 2020

BANGKOK Dramatic changes are happening to new hotel development projects across Southeast Asia due to the severe COVID-19 triggered slowdown with global and regional chains rapidly shifting their attention to conversion opportunities and a management-light approach.

From a market size assessment, the stakes are high, according to data from STR, with over 80% of their reporting 8,757 international standard hotels in Southeast Asia classified as independent. The recent Soft Brand Hotels Review research by hospitality consulting group C9 Hotelworks further notes that the top three countries in the region with the highest number of independent hotels are Vietnam, Indonesia and the Philippines.

Southeast Asia’s explosive hospitality growth trajectory over the past decade has been driven by developers new to the industry or those expecting hyper-tourism growth. This love affair with hotels has quickly soured in the wake of the pandemic and suddenly owners are looking for stopgap measures for their multimillion-dollar assets as operating losses mount by the day.

“It’s ugly out there and about to get uglier,” says C9 Hotelworks Managing Director Bill Barnett. “Rising pressure from lenders, and a mounting storm of unpredictability has set hotel owners adrift in a sea of economic uncertainty.

“This is especially prevalent in the midscale and upscale tiers, as most markets are domestic reliant, and seeing cheap deals at the top end of the market creates a domino effect across tiers. Bottom line, there simply is not enough broad demand to sustain Southeast Asia’s hotel sector and the squeeze is felt directly where the largest room supply sits, in the middle.”

Operating international standards
Soft Brand hotels

Another key hotel trend across the region highlighted in C9 Hotelworks’ research is the emergence of greater emphasis on soft brand offerings by global brands such as ACCOR, Marriott, and Hilton. This light approach takes in to account a growing number of owners who want their name reflected on properties and non-standardized design approaches. Add on the fast-track to conversions for operating properties or options to franchise for experienced developers and there is clear evidence of major shifts in the industry.

Speaking to this C9’s Bill Barnett adds, “Southeast Asia’s hotel industry is being driven into a new cycle by the necessity generated by the pandemic, and common practices in North America and Europe that are now accelerating into the region. Our research shows fast development in franchising, third party operators, and a pivot by international chains to management-light approaches. Given the significant size of independent hotels, it’s a logical step to fish where the fish are.”

Summing up the post-COVID outlook, David Johnson CEO of Delivering Asia Communications says “distribution and brand are on the cusp of a new disruptive cycle. While it’s a total departure from the standardized mass-market approach in recent times it is without a doubt the shape of things to come.”

To download C9 Hotelworks report Soft Brand Hotels – Southeast Asia Market Review:

Download report

You might also want to view C9 Hotelworks recent virtual online event on Soft Brands and White Label Hotels with leading hotel groups and experts speaking.

Phuket Hotels Fight For Their Lives As Massive Economic Fallout Expected From Failure Of Domestic Tourism To Support The Industry

New research by consulting group C9 Hotelworks points to Covid-19’s crippling implications with airport arrivals plunging, the Phuket Model stuttering and 50,000 jobs expected to be lost if there are no overseas visitors this year

For Immediate Release, 8 September, 2020

PHUKET, THAILAND Phuket’s hotel industry is reaching breaking point and drastic economic support from the government is needed for it to survive the high season, urge industry leaders.

In the wake of the controversial “Phuket Model” international travel reopening scheme, reality is biting back as hotels in Thailand’s leading resort island are unable to sustain operating viability based on domestic tourism.

According to the Airports of Thailand (AOT), passenger arrivals at the aviation gateway have plunged 65% year-on-year from January through July of this year.

What is clear is that the 86,000 rooms in Phuket’s registered accommodation establishments cannot realistically break-even or even be cash-flow positive with only domestic demand. This realistically could set the scene for 50,000 job losses in the hotel sector this year if there’s no support forth coming or international visitors are not allowed in.

One of the green shoots is the Alternative Local State Quarantine (ALSQ) program, with over 60 island properties applying. While this program is meant to emulate the ASQ program in Bangkok, given there are no direct flights to Phuket, the government needs wider support of a return of international travelers at a local level and implement inter-ministerial coordination before it could materialize. But this may take months.

Anthony Lark, President of the Phuket Hotels Association that represents 78 hotels in Phuket said: “The math simply doesn’t work with single-digit occupancies being reported. No amount of induced local demand can prevent the dramatic continued loss of jobs and rapidly eroding financial crisis for owners and operators. We strongly advocate a safe, pragmatic, and strategic reopening for foreign travelers.”

With tourism being the lead economic indicator in Phuket data newly released by hospitality consulting group C9 Hotelworks reveals the Covid-19 impact on the hotel development pipeline with 69% of hotels now being delayed or put on hold. Looking at the economic consequences, at the end of 2019, there were 1,758 licensed accommodation establishments on the island and today incoming projects stand at 58 hotels, representing a 19% rise in supply with 16,476 additional rooms planned.

C9 Hotelworks Managing Director Bill Barnett said: “Thailand’s failure to relaunch overseas tourism creates a dangerously perilous scenario for Phuket’s hospitality industry. The domino financial impact is not only on hotels and the expanded tourism sector, but it suffocates the development pipeline. This will negatively trigger the erosion of jobs in construction, real estate, retail and ultimately be manifested in consumer credit defaults. The situation is bad, and likely to get worse, as operating hotels remain incur losses day in and day out.”

In terms of updating the Phuket hotel situation on the ground, there continues to be much controversy and a lack of national and local consensus over the proposed “Safe and Sealed’ sandbox long-stay program. While a stark warning was issued last week by the Bank of Thailand (BoT) over the potential disruption to the heavily tourism-dependent country, the fate of Phuket’s coming high season remains very challenged.

Citing a way forward C9’s Bill Barnett commented: “Any reopening plan must not only be well planned but has to win the hearts and minds of the Thai people to see any chance of success. While the island may hold the keys to the Kingdom in leading a restoration of tourism, but the more critical issue is how hotels can fight for their lives in the current state of limbo.”

 

 

Speaking about Phuket’s current situation Anthony Lark added: “Firstly, greater proactive dialogue between the public and private sector has to be undertaken. We can’t simply say we are now in unknown territory forever. Steps must be taken and a single voice formed.

“Secondly, the Bank of Thailand (BoT) has to look at interim measures to assist hotels with short-term operating bridge loans to weather the storm and retain jobs. Tourism is a human endeavor and without protecting and nurturing our Thai workforce there will be no recovery.”

 

Anthony Lark, President, Phuket Hotels Association

 

For further information or high-resolution photography, please contact:

Anthony Lark
President
Phuket Hotels Association
E-mail: [email protected]

Sunisa Pollasit
Delivering Asia Communications
Mobile: 087 690 1620
E-mail: [email protected]
www.delivering.asia

Phuket Hotels Association members are as follows:

Amanpuri, Anantara Layan Phuket Resort, Anantara Maikhao Phuket Villas, Anantara Vacation Club, Andara Resort & Villas, Angsana Laguna Phuket Resort, Banyan Tree Phuket, Boathouse by Montara, Burasari Resort, Cape Sienna, Centara Grand Beach Resort, Club Med Phuket, Dream Hotel & Spa, Dewa Phuket, Grand Mercure Phuket Patong, Hilton Phuket Arcadia, Holiday Inn Maikhao, Holiday Inn Resort Phuket, Patong, Hyatt Regency Phuket Resort, Impiana Resort Patong, JW Marriott Phuket, Le Meridien Phuket Beach Resort, Maikhao Dream Villa Resort & Spa, Manathai Surin, Movenpick Resort Bangtao Beach, Novotel Phuket Kamala Beach, Novotel Phuket Karon Beach, Novotel Phuket Phokeethra, Novotel Phuket Surin Beach Resort, Outrigger Laguna Phuket Beach Resort, Outrigger Laguna Phuket Resort & Villas, Paresa Resort, Phuket Marriott Resort and Spa, COMO by Point Yamu, Pullman Phuket Arcadia Naithon, Pullman Panwa Beach Resort, Renaissance Phuket Resort & Spa, Rosewood Phuket, Swissotel Resort Phuket Kamala, Swissotel Resort Phuket Patong Beach, Thanyapura, The Bell Pool Villa, The Nai Harn, The Pavilions, Phuket, The Slate, The Surin, The Village Coconut Island, The Westin Sirey Bay Resort &  Spa Phuket, Trisara, Twinpalms Phuket.

Thailand’s tourism recovery hinged on tapping into 227 million strong domestic marketplace

Over 1,000 travel industry participants at Thailand Tourism Forum 2020 – Special Bangkok Edition – virtual online conference

 

TTF 2020 Bangkok-based speakers

TTF 2020 Bangkok-based speakers (from left): QUO CEO, David Keen; Rosewood Bangkok Director of Sales and Marketing, Leanne Reddie; Centara Hotels & Resorts CEO Thirayuth Chirathivat; IC Partners CEO, Charles Blocker; Hotel Intel Editor-in-Chief Wimintra Raj; Delivering Asia Communications CEO, David Johnson; and Horwath HTL Director-Thailand, Nikhom Jensiriratanakorn.

 

BANGKOK Thailand’s domestic-led tourism recovery was at the forefront of a virtual online event “TTF2020 – Special Bangkok Edition” today that tapped more than a 1,000 leading domestic and international travel and hotel industry participants.

Research from hospitality consulting group C9 Hotelworks and Delivering Asia Communications focused on domestic inter-Thailand visitor market whose size at more than 227 million in 2019 stole the limelight versus 39.8 million international visitors. This set the event stage for a compelling look into the pent-up demand of local travelers who are now being targeted by Thai hotels and tourism establishments.

In a series of random polls as part of C9 and Delivering Asia’s market insight held over the weekend in Bangkok, an assortment of Greater Bangkok residents that represent more than 15 million people in the expanded metropolitan area voiced a clear preference for less dense, more natural provincial destinations. Those most mentioned were the islands of Koh Chang and Koh Kood and mountain areas of Phetchabun, Nan, Pai and Mae Sot.

To view the special event video edition of Greater Bangkok residents talking about Thai domestic travel click.

 

TTF 2020 Bangkok Edition:

TTF 2020 Bangkok Edition: keynote speaker Centara Hotels & Resorts CEO Thirayuth Chirathivat (right) interviewed by Delivering Asia Communications CEO, David Johnson.

Top 10 Thailand Destinations
Thailand Domestic Travel

Thailand domestic travel data by C9 Hotelworks and Delivering Asia Communications

 

In a key segment of the event by global hotel intelligence group STR, which zeroed in on the country’s gateway capital, Area Director – Asia Pacific Jesper Palmqvist said “as Thailand’s economic engine, Bangkok will need to lead by example coming out of the crisis and promote and enable the domestic business that exists. In hotel metrics, this will change the definition of what are ‘acceptable performance levels’ are.”

As to what lays ahead for hotels Palmqvist added “forget about hitting 2019 levels again anytime soon and instead focus on recalibrating what acceptable hotel trading levels are. There is a case to be made for either economy and midscale or luxury properties to emerge more efficiently. Though the question remains, with tighter traveler belts on the horizon, which class of hotel will represent the fastest route to longer term recovery?”

Summing up the takeaway points of TTF2020 – Special Bangkok Edition, C9’s Managing Director Bill Barnett said “while international tourism remains a work in progress that is highly leveraged on bilateral cross-border agreements and restoration of airlift, the near-term goal of hotels is to attract cash flow. Expect Thailand to take to the road in considerably greater numbers for the remainder of 2020 and the industry will have to fish where the fish as part of the recovery journey ahead.”

An impressive line-up of speakers for the event, organized by C9 Hotelworks and the American Chamber of Commerce Thailand, included Centara Hotels and Resorts CEO Thirayuth Chirathivat and key senior executives from JLL, Horwath HTL, QUO, TSI, STR, Agoda, IHG, HotelIntel and Rosewood Bangkok. 

To download the full-length event video and presentations, visit this link.

Young, Independent, Digitally-Driven Travelers to Lead Vietnam’s Travel Reopening: China Vietnam Travel Sentiment Survey

Vietnam’s global tourism ambition needs to focus on China and short-haul travel, concludes latest research.

 

BANGKOK: Vietnam’s remarkable reopening of its domestic travel sector is expected to be replicated by focusing on short-haul Asian markets in a quest to restore their international tourism profile. The country has effectively demonstrated a Covid-19 leadership model in Southeast Asia with a focus on the all-important driver of airlift demand.

A newly released survey of qualified travelers from first tier cities in China by leading hospitality consulting group C9 Hotelworks and Delivering Asia Communications, created to understand relevant overseas travel sentiment for the remainder of 2020, analyses demand for Chinese inbound tourism to Vietnam.

Key points highlighted in the study are that nearly half of the respondents want to travel abroad this year, with 45% interested in traveling specifically to Vietnam. Moreover, post Covid-19 Chinese travelers are looking at more mainstream, well-known destinations with top Vietnam picks being Ho Chi Minh City, Hanoi, Nha Trang/Cam Ranh Bay and Halong Bay.

Speaking about the reopening of Vietnam tourism, C9 Hotelworks Managing Director Bill Barnett said “a post crisis short-term ‘fear factor’ is expected for extended air travel which will be manifested in a preference for short-haul, door-to-door flights, which is a key opportunity for China outbound to Vietnam.

“Of equal importance is to understand that at the moment, and in the coming months, domestic travel and tourism will define the gradual recovery process. What is significant about the China Vietnam Survey is who are the immediate post crisis travelers and how can hotels and tourism stakeholders proactively meet their needs. We see a parallel trend in early travelers both domestically and from the China data, which pair up in a new tourism visitor profile,” said Barnett.

Putting the market insights to use is an important sentiment voiced by David Johnson, CEO of Delivering Asia Communications, who added “a 360 view of the results from over 1,000 qualified respondents concludes that tourism for the remainder of the year will be heavily leveraged by younger travelers in the age range of 20-29 years old, who increasingly place an emphasis on booking hotels on digital platforms.

“Two other significant trends from our China research showed that aside from sightseeing and eating being key activities, nature moved up in preference, which could be a reaction to a post-crisis change in tourism values. Diving into accommodation preferences, the two ends of the price spectrum of budget/economy and five-star hotels drew most positive responses from the Chinese surveyed,” he said.  

One final takeaway from the survey is how younger travelers are reflected in rising sentiment with 81% saying they would choose independent travel vs. group tours. This fact, coupled by younger Chinese booking travel digitally via WeChat and Fliggy is a new twist in Vietnam’s marketing to China inbound tourists.

In addition to the survey, a special free web event is being held on Thursday 7th May at 2:00pm Vietnam time led by C9 Hotelworks and Delivering Asia Communications including leading experts Ken Atkinson, Founder and Senior Advisor of Grant Thornton Vietnam and Vice Chairman of the Vietnam Tourism Advisory Board, Michael Piro, Chief Operating Officer of Indochina Capital and David Keen, Chief Executive Officer, QUO.  Register here.

Read and download the China Vietnam Travel Sentiment Survey 2020 here.

Visitor singularity punctuates Phnom Penh’s journey to bright lights, big city

C9 Hotelworks reports that airlift exceeded record 2 million passenger arrivals last year

As fast-paced urban development and sprawling mega-infrastructure projects mount on Phnom Penh’s Mekong horizon, the obvious question is, where does it go from here? Cambodia’s shift from its singular tourism magnet Siem Reap, which is the access point of the iconic Ankor Wat, is now rapidly moving southward to the nation’s capital city.

Last year, the lead indicator of passenger arrivals by air saw Phnom Penh exceed 2 million passenger arrivals, surging past Siem Reap for the first time in a decade. Research by hospitality consulting group C9 Hotelworks has also captured data showing a steady  sustained growth trajectory, as passenger arrivals recorded double-digit rate growth rates from 2012 through 2018, with a CAGR (compound annual growth rate) of 18%.

Clearly the key catalyst of change for the city has been its proximity to the country’s leading private and public sector headquarters and strategic location for China’s ambitious BRI (Belt and Road Initiative. The BRI now spans across Cambodia and runs all the way south to the Gulf of Thailand and beyond into the South China Sea.

Citing the critical business and tourism potential of the city is C9’s newly released Phnom Penh Hotel Market Update 2020 which reports that Asia is the dominate visitor source region, representing a 79% market share. More telling is a deeper data dive that 66% of the regional traffic is from Mainland China. Ranking the top 5 geographic source markets has China at the top with 52%, followed in order by Malaysia, USA, Japan and Thailand.  

Moving on to how overseas travelers are funneling into the accommodation sector, C9’s report underscores that according to latest available data there are 313 hotels with 19,337 keys and 523 guests houses in Phnom Penh.  A clear sign how fast-paced growth is impacting the hospitality sector is demonstrated in the fact that there are presently fifteen new hotels in the pipeline with 7,849 keys. It should be highlighted that thirteen of the upcoming properties are internationally branded by global hotel management groups including Marriott, Hyatt, Shangri-La and ACCOR.

As for the city’s hotel sector, there are challenges ahead with a spike of newer and bigger hotels and it yet to be seen how they will penetrate the existing hotel market. C9’s Managing Director Bill Barnett reflects “the next two years will see a massive transformation in the accommodation supply as ten new branded properties are forecasted to enter supply between now and 2022.  While business travelers are the core guests, the task is how to attract other segments including tourists and the MICE sector.

Phnom Penh finds itself in a similar situation as other Asian CBD gateway capital hubs like Jakarta and Yangon where hotels are defined by weekday business travelers. Manila on the other hand has been able to capitalize in the gaming sector to grow the leisure segment and provides a more balanced model in the future.”

As for what are the prospects ahead Barnett adds “Cambodia’s new economic model remains unique in the region given the confluence of the BRI, though it’s sheer location is strategic by nature. With a young emerging working class, and influence of globalization, its economic history remains further in the future, so there remains a lot of work on the table in the foreseeable future.”

To read and download the full Phnom Penh Hotel Market Update 2020, click here