Phuket is the largest island in Thailand, both in terms of area and number of visitors each year. In fact, Phuket alone accounted for 9 million visitors arriving by plane in 2018, which represents a quarter of arrivals in Thailand. As a specialist in rental investment in Thailand and present in Phuket, Thai Property Group explains why the hotel market in Phuket is still and always attractive.

Phuket has historically been the most popular tourist destination in Thailand, which is why its hotel market is the most active. Its location, at the exit of the Strait of Malacca, has always made it an international crossroads, especially crossed by the Silk Road maritime route, but it is mainly the early development of the island in terms of tourism that makes it the top destination in Thailand. The first backpackers arrived as early as the 1970s and the first bungalows were built in the following decade.

Thus, the tourist development of Phuket has always been ahead of neighbouring destinations and does not seem to be stopping anytime soon. The construction of two American training hospitals, new modern malls providing access to everything necessary – including huge shopping spaces – and a future Tramway line (opening in 2021) show that tourist attractiveness is at the heart of this island economy.

Furthermore, the diversity of its visitors allows for a certain consistency in terms of attendance. Because the “Pearl of the Andaman” is not dependent on mass tourism (backpackers, young partygoers, families), but can also rely on the attendance of wealthy expatriates living on the island, athletes attracted by the exceptional golf courses, snorkeling enthusiasts, or even Thailand specialists who come to immerse themselves in Thai culture in Phuket Town.

2018 raised some concerns about a possible slowdown in tourism, especially following the sinking of a Chinese cruise ship. However, while growth is lower than in 2017, it remains positive (8% according to the first quarterly report of 2019 from Hotelworks). Furthermore, the slight decrease in occupancy rates has been offset by an increase in prices that has been accepted by tourists (around 115€ per night, with an average daily expenditure per visitor of 230€). Indeed, the affluent clientele in Phuket, willing to pay more for constantly developing infrastructure and services, has allowed Phuket hotels to maintain their occupancy rate at 80% while the rest of Thailand is at 70%.

As for future growth prospects, Chinese and Russian tourists, the main tourists in Phuket (Chinese represent almost a quarter of tourists), continue to come in increasing numbers (20% growth for Russians last year) and are joined by other nationalities (Indians, Hong Kongers mainly) due to the democratization of direct flights and the increase in purchasing power in South and East Asia.

Thus, the confidence of the hotel industry in Phuket regarding the future of its market is reflected in several projects to establish renowned hotel chains: Best Western, Hilton, Sheraton, Novotel, and Holiday Inn. This confidence is also shared by the Thai government, which is investing in the expansion of Phuket airport to allow more direct flights. The expansion of the North section has already allowed the opening of the direct Phuket – Phnom Penh route.

If you want to learn more about the hotel market in Phuket, or if you are considering investing in Thailand, do not hesitate to contact the experts at Thai Property Group who will be able to offer you an offer that meets your needs.

*Prices in € are given as an indication based on the exchange rate at the time of this publication.

Sources :

1. https://www.c9hotelworks.com/downloads/phuket-hotel-market-update-2019-03.pdf
2. https://www.phuket.net/visit-phuket/about/info/history/
3. https://www.ceicdata.com/en/thailand/hotel-occupancy-rate-and-average-room-rate-monthly
4. https://thethaiger.com/news/phuket/number-of-tourists-visiting-phuket-still-high-tat-phuket