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Phuket
Mid-Year Edition September 2014
2014 Hotel Market Update
2014 Mid Year
Phuket tourism straddles a thin redline with its volume-driven
strategy
In the aftermath of Thailands politicalcrisis which saw martial
law anda nationwide curfew imposed in May,the resort island of
Phuket experienceda sharp drop in visitor arrivals. Thispeaked in
the month of June whencombined international and domesticpassenger
arrivals dropped by 14% year-on-year.
There has been a gradual easing of thenegative trend in July and
August, thoughcompared to the same period in 2013 themarket has
continued to experiencecontraction. Chinese and Russiantravelers
remain key sources of businessin the first half of 2014 accounting
for47% of international arrivals, rising 6%and 14% year-on-year,
respectively.
At the same time Phuket is expected tobenefit from an extensive
government-ledoceanfront clean up of illegal structures
Mid-year slump in arrivalsjolts hotel trading levels
During the first half year of 2014 room night demandretracted to
72% and room rates decelerated, levelingoff at US$159 compared to
the same period in 2013.
Passengers arrivals at Phuket International Airport
in H1 2014 maintained a positive 10-year CAGRgrowth of 13%
between 2004 to 2014 and 5-yeargrowth of 8%.
Number of total arrival aircraft movements hasexpanded from
5,810 flights in H1 2005 to 18,986flights in first half of 2014.
Proportion of directinternational flights rose from 38% to 55% in
thesame period.
Phukets incoming pipeline stands at 4,582 newrooms from 23
hotels which are presently underdevelopment. Approximately 40% are
forecasted toopen in 2015, followed by another 22% in 2016.
Most of the islands pipeline is concentrated on theWest Coast
accounting for 74% vs. 17% for theEast Coast. The North and inland
areas lag at 3%and 6%.
Over-leveraging of emerging mass tourismsegments continues to
concern hotels as doespotential risk from the Ukraine political
crisis andrise of global oil prices.
Bill Barnett, Managing Director, C9 Hotelworks
and anti-corruption campaignwhich has resulted in a
remarkableclearing of the islands beaches.
Speaking to hoteliers on the forwardoutlook, while static growth
isexpected this year, in 2015 they arelooking at budgeting similar
figureswhich they had previously anticipatedwhen preparing
growth-oriented2014 budgets.
Monthly Trend of Airport Arrivals
Source: Phuket International Airport and C9 Hotelworks Market
Research
%
100806040200
-20-40-60-80
Number of Passengers
700,000
600,000
500,000
400,000
300,000
200,000
100,000
Jan Feb Mar Apr May Jun
Annual Growth of Total Arrivals
Total Arrivals H1 2013 Total Arrivals H1 2014
Forward Outlook
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TOURISM
C9 2014 Hotel Market Update:September 2014
Airline Indicators
International and domestic passenger arrivals for the period of
January through June 2014 tallied in at1.6 million and 1.2 million,
respectively.
Total number of direct international aircraft arriving at Phuket
International Airport accounted for10,399 flights which registered
5% year-on-year growth. Domestic aircraft arrivals increased
9%year-on-year with 8,587 flights.
Tourism Indicators
Key Geographic Source Market Share
Source: Phuket Airport Immigration and C9 Hotelworks Market
Research
Top 5 Source Markets Top 5 Asian Markets Top 5 European
Markets
Chinese andRussian sourcemarkets showsustained 5-yeargrowth
pattern
All-time highairport passenger
arrivals in firsthalf 2014
Phuket Airport Arrivals Half Year
Source: Phuket International Airport and C9 Hotelworks Market
Research
H1 2010 H1 2013 H1 2014H1 2011 H1 2012
Top 5 Source Markets Half YearNumber of Visitors
China Russia Australia South Korea U.K.
200,000
100,000
300,000
400,000
500,000
600,000
Number of Passengers %
H1 2008 H1 2009 H1 2010 H1 2011 H1 2012 H1 2013 H1 2014
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000600,000
400,000
200,000
100
80
60
40
20
0-20
-40
-60
-80
International Passengers
Annual Growth of International Passengers Annual Growth of
Domestic Passengers
Domestic Passengers
Russia
U.K.
Germany
Sweden
France
Other
China
South Korea
Singapore
Malaysia
Hong Kong SAR
Others
China
Russia
Australia
South Korea
U.K.
Others
36%59%
12%
19%
50%
9%
12%29%
19%7%
6% 6%
8%
8%
7%
6%
3%
4%
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Hotel Performance All tiers demonstrated a negative trend in
operating performance during H1 2014 compared to the
same period in 2013. Market-wide occupancy of 72%, was down by
4%, while ADR decreased fromUS$165 to US$159. Overall RevPAR of
US$114 declined by 9%. Hotel demand in key locations
across the island has remained static versus year-on-year
figures in 2013.
Hotel Supply Aside from a surging pipeline of new build hotels,
upgrading and expansion programs of existing
properties is on the rise. Two notable repositioning projects
are the Royal Phuket Yacht Club Nai Harnand former Evason Rawai
(now InterContinental) which should re-enter the market over the
next
18 months.
HOTEL MARKET
Source: C9 Hotelworks Market Research*To Be Announced
H1 2014 Average Room Rate
H1 2014 OccupancyH1 2013 Occupancy
H1 2013 Average Room Rate
Performance by Key Locations
Source: C9 Hotelworks Market Research
% in USD
100
80
60
40
20
300
200
100
Patong Bangtao Karon & Kata Mai Khao
Hotel Indigo Phuket Naithon Beach ResortNikki Beach Hotel and
SpaThe Naka PhuketKeemalaBest Western Patong Beach hotelRamada
Phuket DeevanaThe Patong Bay Hill Hotel & Resort
All Seasons Phuket Patong BeachRosewood Phuket
Hyatt Place PhuketGrand Mercure Phuket PatongCentara Grand
Moringa Resort & Spa PhuketFour Points by Sheraton Phuket,
Patong
Aloft Phuket PatongNovotel Phuket Karon Resort & SpaEastin
Yama Hotel Kata PhuketThe Hermitage HillNovotel Phuket Townibis
Styles Phuket TownPark Hyatt PhuketSri Panwa (extension)Panwa Beach
Resort (extension)
JW Marriott Phuket Resort & Spa Chalong BayCourtyard by
Marriott Phuket at Chalong BayPhuket Marriott Resort & Spa,
Naiyang Beach(conversion and extension of Imperial Adamas Hotel
Phuket)W Retreat Phuket Phang Nga Bay
Nai ThonBangtaoKamalaKamalaPatongPatongPatongPatongPatong
PatongPatongPatongPatongPatongKaronKataKataPhuket CityPhuket
CityKoh SirayCape PanwaCape Panwa
Chalong BayChalong BayNai Yang
Koh Yao Noi
135174
9438
224206744250
80
161350350290250210104
80180120
8530
223
18927781
79
TBA*Q1 2015Dec 2014
Aug 2015Oct 2014
Jul 2015Q4 20152015Q1 2016
Q2 20162016TBA*TBA*TBA*Q2 2015Oct 2014
Jun 2015Q2 2015Q2 20152016Oct 2015TBA*
Dec 2016Dec 2016Q2 2016
Jan 2018
Hotel Name Location Keys Opening Date
RevPAR OccupancyAverage Room Rate
Overall Performance Half Year
Source: C9 Hotelworks Market Research
% in USD
100
80
60
40
20
250
200
150
50
100
H1 2010 H1 2011 H1 2012 H1 2013 H1 2014
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About C9 HotelworksC9 Hotelworks is an internationally
recognized consulting firm with extensive
experience in the Asia Pacific region.
Its core business focus includes:
Hotel and Resort Development
Asset Management / Ownership Representation
Project Feasibility and Analysis
Key competencies include international hotel operator
search,selection and contract negotiation, mixed use hotel
andresidential planning and operation reviews.
A wide range of both institutional and private developers and
acomprehensive portfolio of completed projects give C9 the
skill
set and background to focus on key issues, evaluate complexones
and assist clients in achieving solid results. Based in
Phuket,Thailand and led by Managing Director Bill Barnett, who
has29 years of experience in Asia Pacific, the firm is well
positionedto serve an increasingly demanding marketplace.
Bill BarnettManaging Director
C9 Hotelworks Company Limited9 Lagoon Road, Cherngtalay,Thalang,
Phuket, 83110, Thailand
(Office located at the entrance of Laguna Phuket)T: +66 (0)76
271 535F: +66 (0)76 271 536
[email protected]
The Source for all Hotel and Real Estate News
www.thephuketinsider.com
