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Asian Resort Trading Downturn

Category: Hotels, Posted:06 Mar 2015 | 14:32 pm

For many Phuket hotels, this year's peak season effectively ended after the Christmas/New Year period.
Anxious hoteliers have been pointing to the ongoing beach issue as a key driver of negative demand, yet looking at regional numbers there is a far broader issue at play.
As TTG's Raini Hamdi tallied in at ITB in Berlin yesterday, Asia's most lucrative resort market, the Maldives is currently experiencing a marked decline in trading levels.
China which is the island nation's leading inbound market has seen year-on-year retraction starting in September of last year and has continued unabated through January.
Hamdi has spoken to wholesalers who are now offering deep discounting to induce business levels back.
Currency of course remains the new elephant in the room for Asian hotels, given a strong US Dollar and devaluation of a number of global currencies.
Russia of course is on a decided downturn with little short term relief.
Yesterday's travel headlines highlighted the emergence of Lufthansa's new low-cost airline carrier Eurowings later this year.
Reportedly the carrier will offer cheap flights to Bangkok and Phuket back of a strategy that is aimed at tackling the rising tide of Middle East airlines who are increasingly capturing market share from legacy operators.
In the first few months of the year as hotels are reporting volatile trading with the exception being Chinese New Year, deceptively destinations such as Bali and Phuket are showing increased passenger numbers compared to the same period in 2013.
While airlift is a key metric to track tourism, the reality on the ground is that peripheral rising locations such as Khao Lak, Lombok and the Gili islands are seeing rising visitors vis a vie transient traffic.
At the same time strong increases in new hotel supply, surging non-traditional accommodation such as condominium hotels and villas and urbanizing local populations are increasingly taking up those airline seats.
Equally at play is a dynamically shifting marketplace with more regional and domestic traffic, which is equating to a shorter average length of stay, hence supply and demand are at odds with each other.
Expect more of the same, as rising competition on pricing is expected to create a far broader competitive sector and Phuket's hotels are faced with a far wider field of predatory challenges.

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