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Posted: 02 Jun 2014 | 9:14 am
Getting inside the island's tourism numbers continues to be an arduous task given the fluid nature of the market, but data at least gives us touch points to understand the actual hotel trading dynamics.
Phuket's two 'go-to' markets have been the emerging China and Russian segments for the past few years.
For the period of January to April of this year, Russian passenger arrivals rose 6% over the same period in 2013. China registered only a 2% gain.
While the good news is that there is growth, the shrinking percentage increase is telling.
More important foreign passenger arrivals decreased by 2% for the first four months of the year from 1,238,835 last year to 1,211,433 in 2014.
Key indicators for the volume markets are the fact that there is a seasonality element. The two top losers were the legacy German and Swedish segments.
For Russia, the snowbird effect goes from November to April, while China aside from Chinese New Year sees strong volume in July and August.
Last year's new China tourism law which came into place in October 2013 did have an impact on lower-end subsidized groups shopping tours.
By the second quarter of this year though, China numbers in many part of the region has pushed up again as operators have adjusted the tour content.
The closure of the runway at Phuket International Airport for maintenance from mid May to mid August from 1 am to 7 am is displacing some airlift to the island.
MICE business traditionally targets shoulder and none peak months, but the political issues look to mute this segment.
Upcoming is the World Cup from mid June to mid July which typically hits resort markets in Asia.
Speaking to hotel groups in Phuket, forward booking pace is below expected levels. One key area hit is Patong which has seen waning performance for two consecutive high seasons driven by new properties entering the market and negative sentiment pushing many travelers to other 'less crowded' west coast locations.
Looking around the region, Bali may be benefiting from the Thailand crisis with a 'tourism redirect' where first quarter international arrivals were up year-on-year by 14%. On the flip side though is a massive incoming pipeline into the Indonesian destination of over 10,000 new hotel rooms may see gains negated by oversupply.
In analysis nothing moves in straight lines and mono market segmentation and a volume strategy are not healthy. Looking to year end, the expectation is that the island's tourism segment will see some flattening which has to be expected given the country has maintained a presence on lead new items around the world for much of the same time.
On the positive sign is that given events, the collateral damage has been contained to a certain degree with a reasonable level of sustained demand.
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