Building a Global Brand
Speak to most developers and real estate agents and two things rapidly become apparent. The first is that with more than 400 developments now gracing Phuket's shores, the supply chain is continuing to grow at breakneck speed. The second is that over the past 12 months demand for property has not grown at the same pace as supply – mainly as a result of political events, the appreciation of the Thai baht, uncertainty over amendments to the Foreign Business Act and most importantly the sub-prime credit crisis.
Last year saw a huge increase in tourism numbers, which has been known to create a positive, knock-on effect on the residential property market. In this perfect "field of dreams", there is no shortage of property and potential buyers continue to arrive in ever-increasing numbers. The question that remains is whether they will continue to buy or whether oversupply is inevitable?
As with any developing market experiencing growth, market segmentation and pursuing new markets for sustained growth are essential. Sustainability is perhaps too closely associated with philanthropists who want to fit in with the world of real estate. Unscrupulous corporate raider Gordon Gekko and his "greed is good" sentiment, from the classic Michael Douglas movie Wall Street, seem more and more appropriate. In the end, market growth comes down to a basic numbers game of supply and demand.
In the recent past, Phuket has been over-reliant on Hong Kong-investors, who have become increasingly fewer, and has had trouble finding significant new replacements for the volume generated a few years back.
Unlike other markets in Thailand, such as Hua Hin, Pattaya and Bangkok, Phuket has a limited demand from domestic buyers looking for a second home or an investment at the upper end of the market.
Typically, Thai buyers prefer to drive to the eastern seaboard or Hua Hin rather than buying costly flights. Also, it is believed that the overall predominance of leasehold property on offer remains a major deterrent for foreigners wishing to obtain bank financing and mortgages. These factors, plus others, all point to the need for the Phuket property businesses to look further afield to new markets and customers.
Taking on the world, is a tall order for most individual developers. Often marketing expenditure and scale of economies simply don't match up. Debbie Dionysius and her destination marketing team at Laguna Phuket are probably the best example of global marketing done successfully. Using clever cross-marketing of brand and destination, Laguna Phuket has managed to turn its annual triathlon and marathon into a vehicle for attracting overseas visitors.
Graham Doven and his Hong Kong-based Phuket Select road shows have proved successful in attracting new clients by gaining exposure in international print media, at the same time increasing consumer awareness of the local property market. Mr Doven is currently looking to expand the offering of overseas-based trade shows, web strategies and tactical campaigns and is working with a consortium of established developers keen to spread the word about real estate in Phuket.
The Phuket "brand" of today holds considerable clout in the world market, but it wasn't always so. Rewind a decade or two, when Bali was the holder of the magical title of "Asia's premier resort destination". Phuket has excelled at attracting attention to itself. Just take a look at Neil Cummings' Phuket.com, Asia Web Direct and Wotif.com websites, which have been hailed for their significant worldwide profile.
Today, it's not uncommon to see groups of businessmen from countries such as Vietnam, Cambodia, India and Malaysia arriving to study the Phuket blueprint, with the aim of recreating the island's success formula at home. While Phuket as a destination and a brand are flourishing, it's time for us to up the ante. Competition is growing and global economies fluctuate, so it's increasingly important to cast the marketing net as widely as possible.
The emergence of quality publications has not only raised the bar at home but also further afield, creating a positive impression of Phuket's developing market. We need more Debbie Dionysius's, Graham Doven's and Neil Cummings to take the lead and show Phuket to the world. You may ask, what's in a name? The answer: absolutely everything.