Phuket Market Update - July 2013

8/14/2019 Phuket Market Update - July 2013

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Phuket

Mid-Year Edition July 2013

2013 Hotel Market Update

2013 Mid Year Forward Outlook

Scheduled flights from Mainland China to Phuketaccounted for 18% of the total internationalscheduled flights in H1 2013, while China charterflights accounted for 43% of all charter traffic.China originating scheduled flights achieved a5-year CAGR growth of 38%, while China charterflights grew by 73%.

Hotel market-wide occupancy at 76% is the highest

since 2008. Increased demand especially frominternational visitors pushed average room ratesand RevPAR up by 7% and 8%, respectively.

Hoteliers reported higher than normal demand inQ1, with weaker growth in Q2 and Q3 expected,so full year 2013 growth expectations will bedependant on Q4.

Nearly half a million MainlandChinese visitors in first half 2013

The number of Mainland Chinesevisitors to Thailand registered arecord high of 2.3 million in H1 2013,compared to 1.2 million in the firsthalf of 2012. A total of 12.7 millioninternational visitors arrived inThailand in the first six months of thisyear, of which China accounted for18% of the total.

In 2012, the number of arrivals fromChina to Phuket was just over halfa million which has skyrocketed froma lowly 37,948 in 2007. From Januarythrough June this year, the numberhas already reached 457,401 and isexpected to gain further momentumfor the remainder of the year.

Mainland Chinese arrivals at PhuketInternational Airport represented 24%

A quarter of all internationalvisitors to island are Chinese

A rising number of cities with direct flights fromChina to Phuket is now 22, which is up from 7 in2007. The expansion of Phuket InternationalAirport is underway and is scheduled for completionin 2015. The airport has been able to managecapacity through off-peak arrivals/departures,particularly with China scheduled and charterflights.

Increasing number of visitors from emerging marketssuch as China and Russia are shifting demand fromindependent travelers to the wholesale segments.A knock on effect to tourism attractions is expected.

More developers are likely to be attracted to thehotel branded residence sector with a substantialincrease in projects anticipated.

Bill Barnett, Managing Director, C9 Hotelworks

of total overseas Asian travelers in2010 and now reflects a hefty 54% inthe first half of 2013.

Phukets tourism industry is now firmlyreflecting the growing prominence ofAsian based visitors, but at the sametime is being challenged to balancecommodity-based emerging markets.

Source: Phuket Airport Immigration and C9 Hotelworks Market Research

%Number of Passengers

150

100

50

0

-50

600,000

500,000

400,000

300,000

200,000

100,000

2011 2012 H1 2012 H1 201320102009

No. of Chinese Passengers to Phuket Growth of Chinese Passengers to Phuket

Mainland Chinese Airport Arrivals


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TOURISM

C9 2013 Hotel Market Update:July 2013

Airline Indicators

The number of international passengers as well as international flights has sharply increased since2009 and continues to surpass the domestic sector ever since it first did in 2011.

In H1 2013, international arrivals grew at 30% compared to H1 2012, accounting for 57% of totalinbound passengers. Domestic arrivals rose at 9% over the same period.

Tourism Indicators

In the first half of 2013, total visitors to Phuket grew at 32% vs. H1 2012. China topped the list at27% of total arrivals, recording major growth of 100%. Other key market contributors were Russiansat 17%, South Koreans 7%, Australians 7% and Malaysians with 4%.

Market share of traditional Western European visitors dropped from 37% in 2009 to 22% in H1 2013.

Growth indirect flights

over a 5-yearperiod hasresulted inCAGR of 19%

Russia andMainlandChina combinefor 44% ofinternationalmarket share

Airport Visitor Arrivals - Half Year

No. of International Passengers

Annual Growth of International Passengers

No. of Domestic Passengers

Annual Growth of Domestic Passengers

Source: Phuket International Airport and C9 Hotelworks Market Research

Number of Passengers %

H1 2012H1 2011 H1 2013H1 2010H1 2009H1 2008H1 2007

100

80

60

40

20

0

-80

-60

-40

-20

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

Top 5 Source Markets

H1 2012 H1 2013 Annual Growth


Number of Visitors %

MalaysiaAustraliaSouth KoreaRussiaChina

120

100

80

60

40

20

0

-20

100,000

200,000

300,000

400,000

500,000

CAGR - Compound Annual Growth Rate


3/8C9 2013 Hotel Market Update:July 2013 3

Content and analysis is based on Mainland China, excluding Hong Kong SAR.

Seasonal dynamics of China demand, coupled with the departure of the traditional Eurocentricmarket is creating a new influx of trade in what was once Phukets off-season.

20% of Chinesevisitors toThailand cometo Phuket

Shanghai,Chongqing andChengdu arethe top cities oforigin for flights

to Phuket fromthe Mainland.

Chinese Visitors to Thailand vs. Phuket

No. of Chinese Visitors to Phuket

Annual Growth of Chinese Visitors to Phuket

No. of Chinese Visitors to Thailand

Annual Growth of Chinese Visitors to Thailand

Source: Department of Tourism, Department of Civil Aviation and C9 Hotelworks Market Research

Number of Visitors %

H1 2013H1 20122012201120102009

350

300

250

200

150

100

50

0

-50

500,000

1,000,000

1,500,000

3,000,000

2,500,000

2,000,000

Peak periods

for Mainlandvisitors to Phuketis July/Augustand ChineseNew Year

2011 Chinese Visitors

2011 Other Visitors

2012 Chinese Visitors

2012 Other Visitors


Market SeasonalityNumber of Visitors

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

100,000

50,000

200,000

300,000

150,000

250,000

350,000

400,000

China Market

Passenger Arrivals from Top 10 Cities


15% 14%

12%

6%

3% 3% 3% 3% 2% 2%

Shanghai/Pudong

Chongqing

Chengdu

Beijing

Hangzhou

Nanjing

Xian

Guangzhou

Shenyang

Tianjin

Number of Visitors

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000


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HOTEL MARKET

C9 2013 Hotel Market Update:July 20134

Bangtaodelivered thehighest RevPARgrowth of 25%,closely followedby Surin andKamala with24%

Performance by Key Locations Half Year

H1 2012 Average Room Rate

H1 2012 Occupancy

H1 2013 Average Room Rate

H1 2013 Occupancy

Source: C9 Hotelworks Market Research

% US$

Mai KhaoSurin & KamalaKaron & KataBangtaoPatong

400

350

300

250

200

150

100

5020

40

60

80

100

Hotel Performance

Market-wideRevPAR in firsthalf 2013 is

highest since2008

Budget andeconomy tierdemonstratedhighest growthof demand

Midscale andupscale hotelshave beeneffective inincreasingaverage roomrates

By Tier

Change

Luxury 9%

Upscale 4%

Midscale 5%

Budget &Economy -1%

Change

Luxury 0%

Upscale 5%

Midscale -4%

Budget &Economy 7%

Change

Luxury 9%

Upscale 11%

Midscale 0%

Budget &Economy

8%

250

200

150

100

50

US$

US$

Full Year (11 vs.12)

Average Room Rate


Half Year (12 vs.13)

100

80

60

40

20

%


Occupancy





250

200

150

100

50


RevPAR


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A total of seven projects with 989 units is currently available in the market. There has been a markedrise of new launches in 2013 with nearly 50% of new inventory up for sale this year.

HOTEL MANAGED RESIDENCES MARKET

C9 2013 Hotel Market Update:July 2013 5

Majority ofsupply is locatedin Bangtao andPatong with37% and 21%respectively

Market Trend

The Phuket hotel managed residences sector is rapidly emerging in the broader island real estatemarket as a key segment. Investment buyer demand is outpacing end users, while lower pricing pointsand unit sizing are defining the offerings.

Domestic Thai buyers are on the rise with key international purchasers from Singapore, Hong Kong,Mainland China and Eastern Europe.

Average market take-uprate is 6.5 units per month,

and average pricing persquare meter is US$4,316

53% of total units havemandatory rental

management programs


Project Name

The Lofts at Laguna VillageLaguna Shores - Phase ILaguna Shores - Phase IIThe Privilege Residences PatongAmari Residences PhuketPhumundra The CondoIcon ParkBaan Mai Khao

Location

BangtaoBangtaoBangtaoPatongPatongKoh KaewKamalaMai Khao

Total

Units

2522910849

16013082

206

Year

Launch

20082012201320102013201020112013

Source: C9 Hotelworks Market ResearchSource: C9 Hotelworks Market Research

Current InventoryNumber of Units

600

500

400

300

200

100

Optional Rental Program Mandatory Rental Program

Units Available Units Sold

Unit Price and AbsorptionPer MonthUS$/sq.m.

6,000

5,000

4,000

3,000

2,000

1,000

7.0

6.0

5.0

4.0

3.0

2.0

1.0

Optional Rental Program Mandatory Rental Program

Price Sales Pace

51%

49%

69%

31%


6/8C9 2013 Hotel Market Update:July 2013

HOTEL SUPPLY

Hotel Openings

Hotel Indigo Phuket Naithon Beach ResortNikki Beach Hotel and SpaNovotel Phuket Kamala BeachThe Naka PhuketHyatt Regency Phuket ResortEastin Easy Patong PhuketSleep With Me HotelGrand Mercure Phuket PatongU Zenmaya

All Seasons Phuket Patong BeachRosewood PhuketThe Patong Bay Hill Hotel & ResortRamada Phuket DeevanaCentara Grand Moringa Resort & Spa PhuketFour Points by Sheraton Phuket, PatongAloft Phuket PatongKata RocksEastin Yama Hotel Kata PhuketThe Hermitage HillB2 PhuketDays Hotel Phuket TownPoint Yamu by COMOPanwa Beach Resort by Marco Polo (Extension)Park Hyatt Phuket

Nai ThonBangtaoKamalaKamalaKamalaPatongPatongPatongPatong

PatongPatongPatongPatongPatongPatongPatongKataKataKataPhuket CityPhuket CityCape YamuCape PanwaKoh Siray

13517416894

20255

23031850

25080

74420635029025034

1058030

12079

22370

2015Q2 2014Sep 2013Feb 20142014Sep 2013Oct 2013Q1 2014Q2 2014

2014Q3 2015Q4 2015Jan 2016TBA*

TBA*

TBA*

Dec 2013Q2 2014Q4 2014Q1 2014Jul 2014Nov 2013Q1 20142016


Hotel Name Location Keys Opening Period

Development Insight

As of June 2013, there were 24 new hotels with 4,337 keys in the Phuket pipeline. Patong leads with65% of total additions to supply. A notable reopening set for December 2013 is the extensivelyupgraded Anantara Phuket Layan Resort (formerly Bundarika) with 77 villas and rooms.

55% of total keys under development are midscale, with upscale properties accounting for 27%.

1,646 newrooms will

enter the hotelmarket in 2014

New Supply by Opening Year

Rooms Hotels

* To Be Announced

* To Be Announced


Number of Rooms Number of Hotels

TBA*2016 Onwards20152014H1 2013

14

12

10

8

6

4

2

2,500

2,000

1,500

1,000

500


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Hotel Pipeline Map


C9 2013 Hotel Market Update:July 2013 7

Point Yamu

Koh Siray

Kata Rocks

Four PointsAloft

Grand Mercure

Nikki Beach

Novotel Kamala

Centara Grand Moringa

All Seasons Hotel

Sleep With Me

Park Hyatt

The Hermitage

Eastin Yama

Patong Bay Hill

Hotel Indigo

Hyatt RegencyU Zenmaya

Ramada Deevana

The Naka

Eastin Easy

Rosewood

Panwa Beach Resort

B2 Phuket

Days Hotel


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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 has28 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

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Phuket Market Update - July 2013