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Reinventing Phuket A Necessary But Daunting Task

Category: Real estate, Posted:15 Dec 2014 | 18:09 pm

Want to know what is next for Phuket. The following is an article I penned in the Bankgok Post on December 10th which is published with permission.
Phuket is an island in transition. Once the golden child of Thailand's tourism industry, where a select coterie of high-end, long-stay travelers used to visit year in and year out, the island today is a place where the times are definitely changing.
That's not to say the ''Monaco of the East" still does not have pulling power.
Private jet arrivals are up, new superyacht berths are being created to cater to high rollers from around the world, and US$10-million villas are sought-after commodities to add to global investment portfolios.
The tourism scene, however, is a bit different. The mass market has moved in and looks as though it is here to stay.
China and Russia dominate arrivals, although in many ways this is a good thing, as it is shoring up numbers following the Great Beach Clearance
of2014 courtesy of the new military regime.
For some visitors coming to Phuket this high season, the prospect of vast, empty oceanfront stretches is going to come as a shock to the system. The post-coup clean-up was aimed mainly at the island's notorious taxi mafia and the booming beach commerce of sun loungers for rent on public land. Caught up in the crossfire were stylish beach clubs, decades-old restaurants and vendors. No one was spared under the soldiers' new "change for good" policy.
For Phuket's tourism industry, a prime economic mover on a national scale, the jury remains out on the impact of the changes. International arrivals have risen since 2009 but remain markedly weak.
since the events of May this year. Hotel occupancy as of mid-year was down for the first time in five years, though it was a pretty soft landing at 72%. June was tough with the nationwide curfew, but arrivals have crept along since then.
The only bright spot has been the upturn in direct flights from emerging markets – chiefly those saviours from China and Russia, who accounted for 47% of all international travelers to Phuket from June 2013 to June 2014.
The reliance on two markets for this amount of business could be risky for a destination formerly happily reliant on a mixed basket of euros and dollars.
Tourism across Asia has been thriving from the emergence of low-cost airlines and a rising consumer class. Double-digit growth has been the norm, and little attention is being paid to the issue of quantity versus quality.
Phuket's prospects now depend on two main feeders: the volume mass-travel segment and the legacy European snowbirds – and the two have entirely different demand drivers. For the latter, a holiday is all about days spent at the beach and lying in a sun lounger. The former are looking for attractions and shopping.
It's easy to say Phuket is no longer entirely about the beach, but what about its large high-season core visitor base that wants beach-type facilities? For local hotels, the future remains unclear, given the lack of transparency or a public agenda about what will happen to beach areas.
Speculation has run rampant about possible options such as concessions in some areas for sun loungers and commerce, but nothing is confirmed.
There has been a lot of debate about Phuket's brand identity- North-South, high-end or mass tourism. But it may be too late to try to revive the quality versus quantity approach. The supply of licensed accommodation will surpass 50,000 rooms over the next two years.
Add in the growing element of unlicensed condominiums and villas for rent and a steadily growing development pipeline, and the reality is Phuket is now an urban resort destination rather than a small idyllic island.
The statistics don't always show the whole picture either. The Tourism Authority of Thailand claims more than 10 million visitors to Phuket last year compared with the 5.4 million arrivals counted by Airports of Thailand.
So what does count? What is clear is there is a lack of identity for the island.
Phuket's growth has surprised everyone, but the question is can it cater to everyone? Add to that the volatility on the horizon. The Russian rouble is down, and the geopolitical situation is anything but stable. So where does that leave the golden child of Thai tourism? Mass tourism is the new reality, and it presents challenges. But it also offers opportunities to reinvent the destination with its new reality. It's a big island, and it does not necessarily have to be inclusive for everyone. Segmentation and specialisation may be the new watchwords.
But for those looking to find some shade on a sun lounger, this may now mean a towel on the beach-and a retro experience of 25 years past. Now, that may get the European snowbirds back on board.

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