High Season Hijinx
The Phuket Gazette.
Indeed the much anticipated high season has arrived, and perhaps a collective sigh can be heard across the island that the end of 2009 is finally within sight. With the fortunes of both the hotel and property industries back in the limelight, it will be interesting to see if the next few months bring a boost to the real-estate market, or if 2010 will be branded with the infamous 'same same but different' slogan.
December kicked off with the launch of three new international hotels: the 68-unit Outrigger Laguna Resort and Villas, Accor hotel group's 258-room Ibis Phuket Kata, and the 144-room Best Western Sawaddi Patong. More changes are also on the horizon for Rawai's Mangosteen Resort and Spa, which signed a new management deal with the global Golden Tulip Hotel chain. Global Tulip made headlines earlier this year when it was acquired by Starwood Capital.
Growing regional chain InVision is looking to open the Patong-based boutique resort B-Lay Tong in January, and expectations for two new chain deals are set to be announced within the next month. In Khao Lak, the JW Marriott opened its doors, and in Krabi, the Ritz-Carlton Reserve's Phulay Bay will debut just in time for Christmas. The long-awaited Hard Rock Cafe at Patong's Courtyard by Marriott is now serving one and all.
In good news for overseas hotel investors, Thailand's BOI (Board of Investments) has expanded its certification to hotels with 100 percent foreign ownership. Previously, only projects with 100 keys and over qualified for the certification, but a second initiative was added in which the minimum requirement for the number of rooms can be modified if the project cost is over THB 500 million (excluding land and working capital). This now makes projects more feasible for Phang Nga, which experienced a post-tsunami ban that limited new hotels to 79 rooms if within 300 meters of the ocean, effectively disqualifying them from BOI certification. The new initiative adds both scale and the ability to leverage debt and investment both offshore and domestically.
On the property front, which has been auspiciously quiet for much of the year, new products are coming to market. Sri Panwa is launching the fourth phase of its luxury residential estate, with seven new villas priced from US$6 million. In Bangtao, Mandala's Luxury Condos took an innovative approach to the global financial crisis by forgoing the project launch phase, which typically sells land and units before construction, and instead elected to build out the units before they were sold. Now close to completion, the condos are hitting the market offering no development risk to buyers, and the ability to move straight into completed units.
In tourism, new airline routes are opening as Thai Airways has announced plans to offer flights from two of China's largest cities, Beijing and Shanghai. The re-emergence of JetStar from Singapore, new services by V Australia (including direct flights to Langkawi), and AirAsia's direct Phuket-Hong Kong route are all assisting a growth in arrival figures.
There remain many whispers, glances into the rear view mirror, and skepticism about what potential setbacks could derail this year's high season to a prosperous return. Several issues still loom in the background, be it the continued Thaksin rift, with saber rattling between Cambodia and Thailand, the Dubai credit crunch, or the re-emergence of H1N1. One thing we learned from the tsunami is that no matter the threat, real or imagined, you can never predict just what could go wrong.
Traveling around the island, business is indeed moving, and new initiatives are blossoming, be it the start of the newly widened Sarasin Bridge, talks of a second major north to south road, plans for the Mai Khao Convention Center, and the new international terminal at the airport.
'Going green' is finally coming on the radar with successful beach clean ups and the new plastic bag initiative, which are all positives for the ecosystem of Phuket. While it may not all be perfect, these are at least baby steps in the right direction.
The rains were savage this year, and as the sunshine returns with the year's end, so do large amounts of tourists, and hopefully, an increasing number of property buyers. Perhaps it's a good time to reflect on what Phuket is doing right, versus focusing only on the negatives. Asia remains a bright spot in the troubled global financial crisis, and what better place to be than this island.