DISCOUNT WARS Splash Jungle Plunges Low Season Rates

Posted: 08 Mar 2010 | 6:00 am

In perhaps a premature anticipation of low season (or is that summer season?), West Sand's Splash Jungle has slashed rates for both residents and visitors as of the beginning of March.

New rates for Phuket residents are THB 380 for children and THB 750 for adults, while for tourists it's THB 750 kids and THB 1495 for adults.

Most of the islands hotels currently are holding reasonable levels of occupancy and looking to maintain rates high season rates to end of March or end of April depending on the market and property. Certainly for start up's like Splash Jungle cash flow remains a critical factor and looking at accommodation there are two large international properties Westin in Khao Siray and Renaissance in Mai Khao who are going to face similar situations in trying to get into the black.

Despite a very vocal local population who have been critical of the opening pricing of the attraction, it remains debatable as to how much incremental revenue the populace will fuel into the park with the exception of weekends at any rate. Fundamentally the park is driven by tourism and many eyes remain on whether seasonal trading will prevail for 2010 or else some of the lows less prevalent with regional and domestic volume markets tapped.

In the past we have written a great deal on the dangers of discounting at high levels since the time it takes to recovery rates can be counted in years, not months. Though for any new project now coming to market the challenge remains that for many debt payments need to be made to banks and cash flows stabilized instead of investors funding ongoing losses.

The next few months will be interesting times on the discount front. Stay tuned.

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