Sky's the Limit to Tourism Growth
With more than 5.4 million tourist arrivals to Phuket in 2007, the market will have to look to the skies in order to maintain its upward momentum. So far, the Airports of Thailand (AOT) has failed to grasp the scope of expansion needed for coping with the increased levels of traffic in the region.
Current problem areas are lack of parking, management of vehicular traffic flow at airport entrances and exits, inferior passenger facilities and the lack of apron space and passenger docks. It appears that this lack of long-term planning will inevitably choke the goose that laid the golden egg for Phuket's tourism.
While Phuket has done little to improve airport facilities, its domestic competitors are expanding.
On Koh Samui a second airport is in the works. At Koh Kood, an island in Trat province, plans are underway for a new commercial airport aimed at the same tourist demographic as Phuket's.
With international hotel chains such as Six Senses opening up on Koh Kood, the island represents strong competition and is quickly becoming the fourth-largest island destination after Phuket, Koh Samui and Koh Chang.
Meanwhile, back in the Andaman region, there is good news that the provincial government in Phang Nga is looking to build an airport north of Khao Lak on Koh Kho Khao. While this poses infrastructure challenges such as the need for a bridge to the island, which is currently serviced by ferries, it appears to be a step in the right direction. The Khao Lak hotel market continues to expand, with international chains such as the Meridien and Ramada adding to the current inventory of 4,000 rooms in the area. Although the property industry in Khao Lak is still in its infancy, this is predicted to take off as well.
While this government-sponsored airport initiative is a positive, it is often the case that these substantial infrastructure projects don't quite match the requirements of their users. In Krabi, for example, Tiger Airways ceased flying to the Krabi airport as demand did not meet its short-term goals.
Koh Samui, in contrast, has been an excellent case study as a destination airport success story in a location dominated by tourism. The existing airport, privately owned and operated by Bangkok Airways, has grown over the years with an attractive and exotic design that reflects both Thailand and the local flavor. Bangkok Airways has a vested, long-term interest in the facility and remains focused on the larger picture of the developing market.
At major airports the landing and take-off fees amount to more than 10% of overhead costs for airlines, making the small, regional airports a more lucrative option for both international and low-cost carriers.
Therefore, a private airport in Phang Nga operated by a low-cost carrier might be the recipe for long-term success. Not only would it allow better tourist access to Khao Lak but it would also free up space at the existing Phuket airport, enabling it to better service its own direct market.
At Phuket Airport, meanwhile, the main discussion point remains the lengthening of the runway at a time when smaller regional aircraft growth is far outpacing that of the larger and more fuel-hungry 747s of a bygone era. In a nutshell, Phuket and its neighbors need either a second airport or a large-scale expansion, neither of which are on books for the current facility. If the pace of infrastructure can't keep up with market demand, then visitors will go to other locations in Thailand or fast-growing locations such as Cambodia or Vietnam. Looking to the skies, the answer is out there but it looks to be in a holding pattern.