Hotels in Thailand have recorded their best July occupancy rates in six years, according to STR Global, but booming arrivals from China and Russia are something of a double-edged sword, warns analyst Bill Barnett. “Mass tourism is the elephant in the room of every major resort destination in Asia,” he says, while the key Thai destination of Phuket faces “a mounting infrastructure dilemma”.
“Sustained direct access to the island is having a major impact on the hospitality sector and it is resulting in an increasingly self-sufficient position for Brand Phuket,” says Mr Barnett, Managing Director of C9 Hotelworks.
“New airlift from Mainland China, Russia, plus the massive pick up in regional low-cost carrier flights is driving a new era of mass tourism to the island and the hotel sector is a clear beneficiary of the growing trend.”
Mr Barnett says top growth markets are China (66%), Eastern Europe (33%) and Malaysia (17%).
He says there’s a strong development pipeline driven by both international and domestic investment.
“Between now and 2015, 5,080 new rooms are under development which will increase total inventory by 11%.
“However, there are obstacles in the future.
“Despite a upwards trading pattern, mass tourism is the elephant in the room of every major resort destination in Asia and the island continues to face both a mounting infrastructure dilemma and lacks a clear-cut long-term tourism plan.
“This can perhaps be best demonstrated by the delayed upgrade plans at the gateway Phuket International Airport.
“With the expansion plan now expected to be completed by 2015, assuming an average annual growth rate of 5%, the expanded airport would hit capacity by 2017.
“Essentially this equates to a scenario of a new facility being dead on arrival.”
Since the 1970s, in man y countries with low services costs and abundant sunshine, tourism development has been based on the three S’s: “sea, sand and sun”. This is also known as mass tourism: large numbers of tourists coming to stay in cheap resorts located in coastal areas. In Thailand, this type of tourism has been developed in areas such as Pattaya, Phuket and along many of the pleasant beaches in southern Thailand.
Unfortunately, mass tourism provides little contribution to the local economy. It creates low-paid employment, and 80% of the profits are made outside the tourism area by foreign tour-operator, hotel owners and suppliers of imported goods for tourist. Moreover mass tourism, if not adequately controlled, destroys the environment. It can cause the depletion of water resources and the contamination of rivers and beaches. It can also lead to a rise in prices that put land and other resources out of reach for the local people. Mass tourism also encourages acculturation, social disruptions and, often, prostitution.
The environmental damage is quite visible in Thailand. High productions of waste with little collection systems, especially on the southern islands, have led to the creation of huge dumping sites in the middle of the forests. Plastic garbage covers the beautiful beaches where tourists enjoy bathing, and are affecting the coral reef and marine fauna (causing turtles to become endangered). Cultural damage is perceived in some hill-tribe villages in the northern mountains, where tour companies have turned these villagers into “zoo” characters.
In the long run, mass tourism can snowball into a vicious circle, destroying its very assets – a friendly culture, rich biodiversity, pristine beaches, beautiful landscape – that attracted visitors in the first place. There is also risk of lowering the quality of service, which will lead to the need of lowering prices to attract more tourists from less demanding segments of the market.