Phuket's hotel industry on the path of growth

Among the new projects are Patong Promende, developed by Baan Sukhothai at Patong Beach Co Ltd, located on Bangla Road. It will be a shopping, dining and entertainment complex, with room for 150 retail shops over 40,000 square metres and a parking area underground of 2,000 square metres capable of accommodating more than 700 cars. The project is expected to be completed soon. 

Benzy Mall is another interesting project, located on Wirat Hongsyok Road, Phuket Town, which has great potential to emerge as a new business quarter. The project covers 15 rai of land. The retail building will be developed as one two-storeyed and five single-storeyed buildings, containing a total of 250 units. A 60m x 20m water park will be in the middle of the project. Banana Walk will be a chic mall with construction elements that include stone, wood, glass and bamboo. Its concept is sustainable retail practice. The project will provide 30 retail outlets, five restaurants and a rooftop nightclub. The project is situated on a 4,500-metre land in Soi Bangla, just 100 metres from the beach. 

Nattha Kahapana, director of Knight Frank Phuket, said that not only retail development, but even the entertainment business has taken off in Phuket recently. A mega-project in Phuket is from Ratchada Niramit, operator of Siam Niramit, on Tiamruammit Road, where a second Siam Niramit Theatre would be built on 50 rai of land. The theatre will have a seating capacity of 1,750. The project is located on Ratsada-Samkong Road, off the Bypass Road. The Splash Jungle Waterpark is being developed in the new northern Centara Grand, probably better known as the West Sands Property Development. There will be 12 waterslides, a huge Superbowl slide and a 335-metre lazy river. 

Phuket has a lot of hotel rooms, however, the new facilities will encourage tourists to go and chill out during their holidays. According to the Department of Tourism, the average occupancy rates in 2010 were 46.2 per cent, increasing from 35.84 per cent in 2009. 

Risinee Sarikaputra, associate director of research and valuation of Knight Frank Thailand, said four-star hotels in Phuket achieved occupancy rate of about 75 per cent in the period between January and October, a 64.83-per-cent increase over 2010. Patong  is  outperforming  the  rest  of  the  island  with  occupancy  rates  of about 82 per cent during January to October.

“We also expect budget/economy hotels to perform better than four-star hotels as travellers tend to be cost -conscious. The total completed four-star hotel supply in Phuket increased by 1,170 keys to 12,493 keys at the end of 2011. The additional supply came from the opening of eight hotels located in different locations of Phuket. 

According to the Department of Tourism, the first 10 months of 2011 proved that Phuket is increasing its share in mass tourism. The emerging markets are the Middle East, Asia and Russia, which increased by 63.2 per cent, 41 per cent and 14.5 per cent respectively. 

Risinee said research indicated that the average ADR of four-star hotels in Patong increased in 2011, from just 2490.76 in 2010 to 2,510.35 during the first 10 months of 2011. With 12 hotels in the pipeline in Patong, the competition is estimated to be intense in this area. The ADR is estimated to decrease in Patong in the near future. The average length of stay is diminished as the average length of stay of Asean tourists is only a few days, while European tourists normally take longer holidays from a week to a month at a time. 

She added that hotels  in  Phuket are  also facing  increased  competition  from  rental  properties  which are offering  competitive rates,  particularly for longer-stay visitors, as  well as competition  from  other resort destinations in the  region.