C9 Hotel works, a consulting firm, released it Phuket Hotel Market Update for the mid-year edition. There it revealed that the island is expecting to open an additional 15,348 rooms for accommodating guests. These additional rooms are to be constructed within five years. With this number, the increase in supply will reach 18 per cent. With this projection, existing accommodations including Novotel in Phuket are worried because the current demand is not as strong as the previous year. This dilemma was tagged by industry experts as the perfect storm that will hit the hospitality sector of the province.
For the first four months of this year, considered to a high season for the island, the number of international arrivals based on year-on-year report for the Phuket International Airport has decreased by three per cent. The domestic arrivals, on the other hand, have decreased by six per cent.
Checking past data showed that the first six months of 2018 recorded an epic increase for the tourism industry but it suffered for the last six months of the same year because of the decline in the number of tourists coming from Mainland China.
For the first five months of 2019, the number of arrivals from Mainland China is lower by 19 per cent. The decline is not only exclusive to Chinese tourists as the same trend is happening with tourists from Russia. The good news is that the number of tourists from India has tripled between January and May 2019 compared to the same period in 2018.
When it comes to performance of the hotels, STR data showed that it is also not faring well with 12 per cent decrease in revenue for every available room. According to the consulting agency, the main reason for the decline is the market wide occupancy which is not as high as before. Based on the yearly record of Novotel in Phuket, the months of May and September are considered to have the lowest revenue while July and August are the two months expected to have higher rate of occupancy. The growth, however, will not be felt because it has to compensate for the off-seasons.