New C9 Hotelworks Phuket Hotel Market Update 2022 Report
The continued economic impact of the pandemic has hit Phuket hotels as 73% of new projects put on hold according to new C9 Hotelworks market research.
Hoteliers in Phuket have been quick to address damage control from the Ukraine Russia crisis, but most of the Russian market falls away in March historically. Three notable source markets that are ramping up airlift to Phuket are Australia, India and the Middle East, and these remain bright spots, though none have demonstrated traffic to match the mass Chinese market.
Phuket led all of Southeast Asia in a remarkable effort of widespread vaccinations and the pioneering Sandbox re-entry program. But a look at the current situation which has seen a return to seasonal trading and departure of winter snowbird travelers dissipate, now has the island looking for replacement markets. As other regional neighbors such as Vietnam, Indonesia and the Philippines roll out quarantine free travel, Thailand remains in an uncompetitive situation given its beleaguered Test & Go process.
Another change in attitude for island hotel owners has been a wave of conversions of independent properties to brands given that many of the highest performing properties during the Phuket Sandbox reopening and growth in domestic travelers was to branded hotels. While another outcome has also seen a number of internationally managed properties converted from management to franchises. This reality of owners operating under global brands and a new influx of white label management has been a trend that was coming anyway and has only been accelerated by the pandemic.
The elephant in the room for the moment is China. The conundrum is that while we fully expect Phuket stabilized numbers to return given its favorable geographic location, tourism-oriented infrastructure and demonstrated airlift capacity but macro political and economic issues are clouding the short-term horizon.
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