Villa Rental Market Surges Despite Downturn
The Phuket alternative accommodation market of villas, condominiums and apartments is starting to reach a greater critical mass and becoming a competitor to established hotels. During this high season agents such as PIPS (Phuket Villa Rentals), Knight Frank, Shibumi, Phuket Marbella, Phuket.net, Phuket Villas and Homes and a number of other agents are reporting strong sustained demand for product.
Given the vast developments in internet booking engines the lions share of these bookings are coming online at a time when travelers are already to accustomed to purchasing other related items like airline tickets through web site and the LCC (low cost airline carrier) boom. When speaking to a number of global accommodation providers based in Asia we understand a number are already looking to either introduce new sites for this type of product or offer a category aimed directly at alternative products.
There remain some important statutory issues unresolved as much as many villa and condo projects cannot obtain hotels licenses since the Thai Hotel Act does not address these new hybrid models. Additionally at stake is taxation such as VAT, municipal rental tax and personal income tax for individual owners. A similar situation occurred a few years ago in Bangkok with the explosion of serviced apartments and the Hotel Act was broadened to cover these developments.
As a byproduct of the holiday residential property boom there remains a huge pipeline that will see sustained product come online over the next 2-3 years and as such look for the rental market to becoming a major segment in the property industry. It is yet to be seen how the hotel groups are going to come to grasps with this type of competition and is an interesting developing storyline.