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Bali Hotels Edge Ahead of Phuket

Category: Hotels, Posted:25 May 2009 | 06:56 am

In the battle for regional destination supremacy Bali has now edged ahead of Phuket as a result of the continued political issues and uncertainty facing Thailand. thephuketinsider.com attended the Hotel Investment Conference (HICAP) Asia Pacific Update last week in Singapore and spoke to Horwath Managing Director Robert Hecker who is a leading authority on hotels and tourism.
Looking at the numbers for Bali in the first quarter of 2009 average occupancy came in at 65%, and average room rates of US$115; while the outlook for full year 2009 is 65-70% occupancy and rates of US$115-120. It's important to note that Bali's high season which is highly leveraged from the Australian market comes later in the year, hence room rates will increase.
While for Phuket which the first quarter is traditionally high season only achieved 65% with rates of US$143. Moving to a full year forecast which factors in low season occupancy is anticipated to be 55-60% and a significant rate decline down to US$110-115.
It seems to be the consensus of the international hotel operators, financial institutions and consultants who attended the conference that this year would see no recovery and in 2010 a best base case was markets would hold. Horwath's forward outlook on Bali next year was occupancy of 65-70% and rates in the band of US$120-125. While for Phuket occupancies are expected to be in par, coupled by a continued rate decline down to US$105-110.
Presently Bali has instituted a moratorium on new hotels which excludes those under construction or with planning permission; though a strong negative will see in excess of 1500 mid tier hotel rooms enter the stream in 2009-2010, and 300 upper tier units. Much of Bali's recent success has been as a result of growth in regional demand and a redirection of travelers from Thailand. Additionally the limitation of resorts in Vietnam is creating demand. Long haul US and European business is declining in that market with the exception of Russia.
For Phuket the biggest hits have been from last years airport closures and this years continued demonstrations which garnered worldwide attention. Given that Bali will have a swing in the next 24 months to a more unfavorable supply and demand ratio with new products hitting the market; while much of the new supply anticipated for Phuket has either slowed down or stopped as a result of the negative debt and equity markets.

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