Convention Center Stoppage Triggers Political Concerns

Posted: 05 Sep 2011 | 4:29 pm

The rejection of the environmental impact analysis (EIA) for the planned Mai Khao International Convention and Exhibition Center is a staggering blow to the island's tourism industry.

The following is an article I wrote for today's Phuket Gazette on this important issue.

Over the past five years the nation's domestic political infighting has crippled efforts to develop a sustainable plan for tourism in Thailand.

As Asia led the world in a post 2008 economic surge a dynamic shift away from foreign investment to Thai investors in the hotel business has spawned an uncontrolled countrywide surge in new properties being built.

Ranging from the feasible to the illogical, the influx of new supply and a looming pipeline are endangering virtually every destination in the Kingdom.

Hotel development has made a dangerous transition from hard business criteria to many pursuing the trade as a hobby, secondary line or else providing a showcase for friends and family. In many cases, no feasibility, or even financial projections accompany the investment decision.

Typically the types of hotels and resorts which are now cropping up in many cases are bulk standard midscale properties which have few distinctive or unique offerings, and few points of differentiation. First time hotel owners are only investing into guest rooms with few looking into other demand generators for tourists. Master planned resorts with open areas and wide array of facilities remain an endangered species.

We have more and more rooms that have multiplied on private sector sentiment, but the ghost in the machine is a check and balance system of no government investment into zoning, controls, or infrastructure projects.

So many rooms, so many tourists and what is left for them to do? The Phuket travel industry continues to complain about the rise in less affluent guests, but what can you expect when all you have is an seemingly unlimited supply of anonymous 32 square meter rooms.

As of the mid-year mark the island has 43,571 hotel room. Another 6,968 are in the pipeline and will open by the end of 2014.

Airport arrivals in 2011 are expected to top a record 4 million and total airport traffic will near the 8 million mark. An expansion plan which will see the capacity of Phuket International Airport rise to 12.5 million in 2014 is underway.

We have a growing number of hotel rooms and airlift that is a given - the numbers will materialize. The clear and present danger is that there is no choice but to be thrust down the expressway of volume mass tourism. Rooms to fill at any price.

But the fact is the price that Phuket will pay will be catostrophic.

An International Convention Center be it located in Mai Khao, Patong, or Phuket City remains a leading generator to diversify the growing over reliance on charter and group tours. Domestic and international MICE business (meetings, incentives, conference and exhibitions) are necessary component of any developed market - be it Singapore, Hong Kong or even resort islands such as Bali.

In the case of the latter a new conference center is underway in the Nusa Dua destination resort.

Its illogical to expect that this isolated government intervention into the island's tourism future is part of a changing attitude to get things right. One has to ask is this a case of political agenda's colliding or the shape of change with a greater awareness of planning foresight?

While we wallow in indecision over tunnels, flyovers, convention centers and public transportation the world around us continues to move forward, while Phuket's future remains very much a foggy blur.

Personally I am a great advocate of a long term tourism plan, one that is holistic towards stemming new building of hotels, encouraging renovations and upgrading, zoning into specific designed areas and yes environmental controls which are stridently enforced. Perhaps the key word here is sustainability.

But a the same time, penalizing the industry by laying waste to a key and necessary infrastructure boost to the island's tourism economy is a shame. It's that simple. For now, what we are all the rooms in the world but a limited amount of places to go.

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