HOTEL ALERT Discounting and Supply Hit Phuket's Q3 Hotel Perform
Wide scale discounting starting at the upscale and midscale hotels has created a domino effect downward with a continued slide in 3rd quarter Phuket hotel performance. Speaking to Jonas Ogren at STR Global the for the period of January through September (nine months) of 2009 versus the same period in 2008 the islands average occupancy is down 18.9%, average rate declined 14.3% and most important RevPAR rattled lower to 30.5%.
Poor market sentiment has led many properties into deeply discounting room rates along with the effects of substantial new hotel supply entering into a market which is vastly seeing a saturation point in the mid and upper tier levels. Back of the already open Radisson Plaza, new hotels coming online include Westin in Koh Siray, Renaissance Mai Khao and Centara Grand Karon.
Based on actual trading terms for international standard properties island wide occupancy year to date registered 52.9%, an average rate of THB 3,786 and RevPAR standing THB 2,002. While there are positive gains in airlift and tourism numbers these are being counteracted with increased hotel rooms and a shifting geographic mix with greater numbers of regional and lower yielding markets.
Though 4th quarter occupancies and rates will be lift as high season comes into play, there remains considerable concern for long term rate recovery with 45 new properties now in the development pipeline.