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Posted: 13 Jan 2012 | 1:50 pm
Arrivals at Phuket International Airport reached 4,228,633 for the full year in 2011. This compared to 2010's total of 3,519,823.
Key year on year growth was in international traffic (arrivals and departures) which clocked in with a 30.77% surge. Total passenger volume moved past the 8.4 million marker.
Mounting concerns over the delay in the construction of a new international terminal which has now been announced as set to complete only by 2015 could restrain short term sustainable growth.
Speaking to a number of Phuket hotel's, a significant trend is a reduction in the expected volume of Russian wholesale bookings. In many cases prepaid room allotments are not hitting the numbers back of a travel slowdown due to concerns over the Russian elections.
Charter flight load factors have been hit, and large wholesalers look to take absorb financial losses with the retraction in trading numbers. What's unknown at this time is will the business rebound quickly after the event, and also just how deep is the captive marketplace.
Winding back the clock the scenario is reminiscent of the overleveraging into the Scandinavian market in Asia's resort destinations a number of years ago, where wholesalers entered into long term prepaid room arrangements and when business levels retracted the lodging market was forced to look for replacement sources.
While the perception in the larger industry is that the Russian business is the bottom of the barrel in terms of room rates, given average lengths of stay which often hit 11 days the market is a key revenue contributor. If hotels are put into a position to replace the business with other Asian based short haul business, the negative impact on hotel rates could potentially be damaging.
Another key storyline will be the increase in the minimum wage which is set for April 1st where a new floor limit of THB300 baht per day or 35% increase further sets a hyperinflation script.
Expect hotel operating costs are set to go up and room rates remain volatile in the year ahead. RevPAR remains under the gun. While the Russian are still coming ,it remains to be seen if they come in the numbers expected.
A column featuring environmental issues and conservation around the island. Click here for more Green Reports check out the latest story from the leading experts:
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