Phuket Hotel Market Update February 2017
Russian arrivals back to pre-financial crisis level, as zero-baht tourism curbs Q4 growth rate Airport Passenger Arrivals Growth Independent properties shift to chains with 6 hotels branded “With total airport arrivals to Phuket surpassing 7.5 million passengers, the Province experienced a higher year-on-year growth rate in 2016 of 18% compared to 13% the previous year. This is largely attributed to the resurgence of the Russian source market, which increased by 51% last year. The rebound was prompted by the strengthening of the Ruble against the Thai Baht, and political volatility in the Middle East that redirected Russian tourists to the island during high season. Another notable source market is Mainland China, whose arrivals were substantially affected after a nationwide government crackdown on zero-baht tourism in September of last year. The growth rate of Chinese travelers for FY2016 was down to 11% versus 35% in the previous year. However, the impact from the new enforcement is expected to soften in early
% 25 20 15 10 5 Q1
Q2
2016 Domestic Arrivals 2016 Total Arrivals
Q3
Q4
2016 International Arrivals
Source: Phuket International Airport and C9 Hotelworks Market Research
2017 with more Chinese FIT’s arriving during Chinese New Year. The balance between two major source markets ended the year on a positive note as hotels’ market-wide RevPAR rose by 4%. We see the industry continuing to attract new developments with more brand affiliated properties. Currently, a total of 5,584 keys are expected to come on stream by 2020." Bill Barnett, Managing Director, C9 Hotelworks
Trends
Forward Outlook
• South Korea and the United Kingdom both moved
• Renovation of Phuket International Airport’s
in the top 5 international source markets, with an increase of 21% and 20% in passenger arrivals, respectively. • Growth of inbound domestic flights almost doubled that of international routes, with y-o-y achieving 20% compared to 11%. • Hotel pipeline has a strong trend towards branded properties, with approximately 79% of total keys in new developments brand-affiliated and 21% independent.
domestic terminal, scheduled to be completed in Q4 2017, will link the international and domestic terminals and ease passenger traffic. • Ultimatum for unregistered hotels to obtain a hotel license in 2017 will help push Phuket’s lower-tier hotels to a higher operating standard. • Mega projects such as the Central Festival expansion, Blu Pearl luxury mall, multiple underpasses and planned light rail project are redefining the broader tourism market.
TOURISM Airline Indicators • In 2016, Phuket International Airport hosted a total of 7,549,346 inbound passengers, with 46% coming from domestic arrivals and 54% from international flights.
Phuket Airport International & Domestic Passenger Arrivals Number of Passengers
500,000 400,000 300,000 200,000 100,000
Jan
Feb
Mar
Apr
May
Jun
Jul
2015 International Arrivals 2015 Domestic Arrivals
Aug
Sep
Oct
Nov
Dec
2016 International Arrivals 2016 Domestic Arrivals
Domestic sector had stronger y-o-y growth rate of 19% last year compared to 16% for international passengers
Source: Phuket Airport Immigration and C9 Hotelworks Market Research
Top 5 Destinations for International Scheduled Flight Arrivals Number of Flights
10,000
The top 5 account for 81% of total international scheduled flight arrivals to the island
8,000 6,000 4,000 2,000
Mainland China
Singapore
Malaysia
Hong Kong
South Korea
Source: Phuket Airport Immigration and C9 Hotelworks Market Research
Top 5 Key Geographic Source Market Trend Number of Passengers 1,750,000
1,500,000 1,250,000 1,000,000 750,000 500,000 250,000 Mainland China
Russia
South Korea 2014
Australia 2015
United Kingdom 2016
Source: Phuket Airport Immigration and C9 Hotelworks Market Research
2
C9 Hotel Market Update: February 2017
Mainland China is the biggest overseas source market despite dropping 2%, as Russia grew to 13% of market share
HOTEL OVERVIEW Performance Comparison 2016 vs. 2015 In THB
%
5,000
78
4,000
76
3,000
74
2,000
72
1,000
70 68 2016
2015 RevPAR
ADR
Occupancy
RevPAR growth was pushed by an uptick in occupancy of 6.28% last year, while ADR averaged THB3,804
Source: STR
Hotel Supply • Thailand's Ministry of Tourism and Sports' hotel supply data was amended to include both registered and unregistered tourist accommodations in 2016. Phuket currently has a total of 81,727 keys in 1,744 establishments. There are 32 hotels in the island’s pipeline. Hotel Name
Location
Keys
Sheraton Phuket Grand Bay Resort & Residences Cassia Phuket (Phase 2) X2 Vibe Phuket Bangtao Residence Parida Resort Yoskarn Kalliste Phuket Wellness Resort & Spa Courtyard by Marriott Phuket JW Marriott Phuket Resort & Spa Noku Roxy Phuket Sheraton Phuket Kalim Beach Resort Best Western Premier Himalai Resort InterContinental Phuket Resort Twinpalms Residences MontAzure Radisson Phuket Karon The 137 Pillars Resort Phuket The Hermitage Resort The SIS Resort Kempinski Hotel Phuket Park Hyatt Phuket Royal Lee The Terminal (unnamed) Mai Khao Palm Beach Resort Movenpick Resort Mai Khao Phuket Anantara Vacation Club Mai Khao Boutique Sai 3 Patong Hotel Hilton Phuket Patong Resort Hotel Indigo Phuket Absolute Twin Sands (Phase 3) Four Points by Sheraton Patong Beach Kata Group (unnamed) Ramada ChaoFa Phuket Best Western The Beachfront Dusit D2 Phuket Aria Rosewood Phuket
Ao Por Bangtao Bangtao Bangtao Cape Panwa Chalong Bay Chalong Bay Chalong Bay Kalim Kamala Kamala Kamala Karon Kata Kata Kata Koh Siray Koh Siray Layan Mai Khao Mai Khao Mai Khao Patong Patong Patong Patong Patong Patong Phuket City Rawai Surin Tri Trang
269 105* 85 24 40 277 189 95 230 402 200 75 150 66 78 124 85 85 320 225 106* 98* 200 300 180 89* 560 170 260 216 210 71
*Additional keys for existing hotels
Opening Date Jan 2019 2017 2017 Jan 2017 Q2 2017 TBA TBA 2018 TBA 2019 2019 Q1 2019 Q1 2019 2019 Jun 2017 Apr 2017 2018 TBA TBA Q1 2017 Jul 2017 Q3 2018 May 2017 Q3 2019 2018 Apr 2018 Jan 2019 Q3 2017 Q4 2017 Q1 2017 Q2 2020 Q2 2017
Source: C9 Hotelworks Market Research
C9 Hotel Market Update: February 2017
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Phuket’s Tourism: A 10 Year Perspective (2007-2016) 10 Year Growth in Passenger Arrivals & Hotel Supply Number of Passengers
4,500,000
Number of Hotel Keys
Between 2008-09, international tourism dropped temporarily due to political issues
4,000,000
100,000
Change in government’s data collection method for hotel supply
80,000
3,500,000 3,000,000
60,000
2,500,000 2,000,000
40,000
1,500,000 1,000,000
20,000
500,000 2007
2008
2009
2010
2011
2012
2013
International Arrivals
2014
2015
2016
Domestic Arrivals
Hotel Keys
Supply and Demand Compound Annual Growth Demand
11%
Growth in Total Passenger Arrivals at Phuket Airport
Supply
9%
Growth in number of hotel keys
Since 2006, the number of passenger arrivals increased more than
3X
How does Phuket compare to other select global beach destinations?
1 Bali
2 Honolulu
3 Phuket
4 Ibiza
5 Maldives
11,148,935
9,745,287
7,549,346
3,091,901
1,234,248
Passengers
Passengers
Passengers
Passengers
Passengers
(2015)
(2015)
(2016)
(2015)
(2015) Data refers to airport passenger arrivals
C9 Hotelworks Company Limited 9 Lagoon Road, Cherngtalay, Thalang, Phuket, 83110, Thailand (Office located at the entrance of Laguna Phuket) T: +66 (0)76 271 535 F: +66 (0)76 271 536 www.c9hotelworks.com info@c9hotelworks.com