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.”