Phuket bounces back 
Phuket has recovered quickly from the
politically inspired concerns that hit Thailand early last year and is
now on track to reach new tourism revenue highs by the end of 2011.
Russia
and China have become the new top tourist markets and a number of Thai
developers have also entered the hospitality investment market in recent
months, suggesting domestic interest is also growing. According to
figures recently released consultancy firm C9Hotelworks, Phuket achieved
a personal best record of 3.5 million passenger arrivals in 2010,
with 22% growth since 2009 and this trend looks set to continue. New
direct flights from China, Russia, the Middle East, Australia, as well
as a number of regional destinations definitely added significantly to
Phuket's tourism growth, amounting to a 21% increase in the number of
flights to the island. The number of planes arriving from Russia jumped
by 128%, while overall, international flights accounted for 37% of
airlift with domestic flights at 21%.
The China market also
blossomed last year, ranking second overall. However, the loss of
traditional geographic markets in Europe and a continued lack of
certainly regarding the recovery of long haul visitors from Eurozone
countries has created a challenging outlook for sales and marketing
teams. Phuket's new markets are much more price sensitive and mid-range
accommodation is thereforeattracting a lot of interest.Patong, in
particular, is expanding to become something of a 'destination within a
destination' with the hotels in the Patong district expected to account
for over 50% of the island's accommodation supply over the next five
years.
For investors looking to capitalise on tourism growth and
generate rental yields, alternative accommodation sectors, including of
condos, apartments and private villas, are attracting increasingly large
amounts of guests on Phuket, drawing custom away from hotels. The
market for these properties is estimated to account for 10% of entire
supply on the island, with increases forecast across the sector. This
element of the market is increasingly the preferred choice for luxury
level visitors, and this in turn is driving the investment market on
Phuket. As the global economy shifts focus and generates new fortunes
for high net worth individuals, European buyers are slowly being
superseded by investors from the emerging markets of Russia, China and
India.
In 2010, mixed use residential and hotel managed
properties continued perform well on Phuket, alongside pure residential
developments. Based on historical trends, 2007 was clearly the defining
year with rock solid supply and demand fundamentals. After the global
financial crises the market slumped with sales in 2009 dropping to
around US$13 million. Key market indicators suggest the luxury villa
segment (US$2 million and up) is now returning to form with registered
transaction volume of approximately US$93 million for the year in 2010.
Such
figures certainly present a positive picture for Phuket in 2011 and
beyond with tourism, investment and therefore economic growth all on the
upturn. The only question that remains is how best to manage the
development.Many of the island's business owners and residents are now
asking the question: "Is bigger always better?