Phuket Hotel Market Update Mid-Year Edition July 2019
Phuket hotel sector set for perfect storm as supply and demand fundamentals become unbalanced Over 8,452 hotel-managed residences in pipeline, as condominium real estate market taps investment driven buyers
Hotel & Hotel Residences Pipeline by Location Karon Chalong Bay
“Our latest research has recorded a total of 56 properties or 15,463 keys in the pipeline, representing 18% growth in the next five years from the existing supply of 84,707 keys. These pipeline projects are categorized into three types: hotels, hotel residences with mandatory or optional rental management programs. Of the total 56 pipeline properties, more than 46% are hotel residence developments with either mandatory or optional rental management programs. These hotel-managed properties either offer guaranteed returns or revenue share generated from the rental pool program. The most popular locations for hotel residences are Kamala and Patong, which have 2,169 and 1,353 units, respectively. Management and franchise offerings with international brands and operators is rising.
Nai Harn Kathu Mai Khao Bangtao Kamala Kata Patong 0
500
1,000
1,500
2,000
2,500
Number of Keys Source: C9 Hotelworks Market Research Note: The chart above excludes hotel residences with optional rental programs
Properties with an international brand affiliation totaled 7,537 keys, representing over 49% of the total pipeline. With the Phuket tourism market in a mature cycle, the massive hotel pipeline has raised oversupply concerns for both existing hotels and projects under development, with increasing stress on island infrastructure inevitable.” Bill Barnett, Managing Director, C9 Hotelworks
Trends
Forward Outlook
•
After an exceptional H1 in 2018 and challenged second half of last year, the first five months of 2019 has not seen recovery of volume driven Mainland China and Russian markets.
•
Phuket development zoning regulations are currently under review by the Ministry of the Interior, which revisions likely impacting the real estate and hospitality sectors on the island.
•
Regional Asian feeders are expanding, with Malaysia rising significantly by 42%. India tripled it’s volume as of May 2019, compared to the same period last year.
•
The announcement a Hotel License Amnesty Program by the Thai government has put pressure on unregistered hotels to be documented legally.
•
Declining tourism demand resulted in a marketwide occupancy drop by more than 6% percentage point for period January thru May.
•
A second Greater Phuket airport located in southern Phang Nga is moving forward with a total investment budgeted at THB75 billion.
TOURISM Phuket International Airport Arrivals Number of Passengers
%
6,000,000
25
5,000,000
20
4,000,000
15
3,000,000
10
2,000,000
5
1,000,000
0 2012 2013 2014 2015 2016 2017 2018
Domestic
International
Domestic arrivals dropped by 6% year-todate as of April 2019, while international sector fell by 3%
YTD YTD April April 2018 2019
Growth Rate
Source: Airports of Thailand and C9 Hotelworks Market Research
Top 5 Geographic Source Markets Number of Passengers
%
1,200,000
60
800,000
30
400,000
0
0
-30 Mainland China
Russia
Australia
YTD May 2018
South Korea
Malaysia
YTD May 2019
Mainland China declined by 19% compared to 2018, Malaysia registered a sharp increase of 42%
Growth Rate
Source: Office of Commercial Affairs Phuket and C9 Hotelworks Market Research
MARKET OVERVIEW Hotel Performance Comparison – YTD May 2019 In THB
%
5,000
100
2,500
50
0
0 2017
2018 ADR
RevPAR
2019 Occupancy
Source: STR and C9 Hotelworks Market Research
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C9 Phuket Hotel Market Update: July 2019
As of end of May 2019, marketwide RevPAR decreased by 12% compared to the same period last year
Phuket Pipeline Hotels Island Escape by Burasari (phase 1) Oceanfront Kalim InterContinental Phuket Resort Island Escape by Burasari (phase 2) STAY Wellbeing and Lifestyle Resort Hilton Garden Inn Phuket Bang Tao Glow Karon Beach Phuket Bhamookah Anantara Vacation Club Mai Khao* Splash Beach Resort Villas Four Points by Sheraton Patong Beach JW Marriott Phuket Resort & Spa Chalong Bay The Beach Plaza Phase 1 Angsana Oceanview Anayara Luxx Panwa Resort Noku Roxy Phuket Hilton Phuket Patong Resort Courtyard by Marriott Phuket Holiday Inn Vana Nava Phuket Hilton Phuket Maikhao Resort and Spa Meliรก Phuket Mai Khao Meliรก Phuket Karon Thanyapura Hotel Phase 2* Centra Central Phuket COSI Central Phuket Novotel Phuket Naiharn Porto de Phuket Hotel by Centara Mandarin Oriental, Phuket Radisson Hotel Mai Khao Holiday Inn Express Phuket Kata The 137 Pillars Estate Phuket Space Hotel Total Hotel Keys Hotel Residences with Mandatory Rental Program Best Western Plus The Beachfront Rawai Angsana Oceanview Residences Dhawa Phuket Residences Best Western Premier Himalai Resort Patong Bay Cottages Phase 1 Ramada Plaza Grand Himalai Resort Platinum Bay Phuket Patong Bay Hills 2 Phuket Water World Resort - Hotel Oceana Surin - Hotel Zone Patong Bay Seaview Residence Dusit Laguna Resort Villas Phuket Patong Bay Cottages Phase 2 & 3 Total Hotel Residences with Mandatory Rental Program Hotel Residences with Optional Rental Program Utopia Nai Harn Citygate Kamala Utopia Loft Nai Harn Utopia Central Utopia Karon Utopia Mai Khao The Marin Phuket Laya Condominium and Resort MontAzure Lakeside by MGallery Beachfront Bliss Naiyang Phuket Water World Resort - Condo Park Oceana Surin - Residential Zone Angsana Beachfront Residences Utopia Dream Total Hotel Residences with Optional Rental Program *Additional Keys for Existing Hotel
Location Koh Mapraow Kalim Kamala Koh Mapraow Rawai Bangtao Karon Kata Mai Khao Mai Khao Patong Chalong Bay Kata Bangtao Cape Panwa Chalong Bay Patong Chalong Bay Kathu Mai Khao Mai Khao Karon Thalang Kathu Kathu Nai Harn Bangtao Laem Singh Bay Mai Khao Kata Kata Kathu Location Rawai Bangtao Bangtao Kamala Patong Kamala Kamala Patong Bangtao Surin Patong Bangtao Patong Location Nai Harn Kamala Nai Harn Kathu Karon Mai Khao Kamala Layan Kamala Nai Yang Bangtao Surin Bangtao Nai Harn
Keys 15 200 170 220 162 177 164 500 106 42 600 189 730 116 44 91 300 277 255 257 101 224 138 170 180 650 135 105 222 300 66 105 7,011 Keys 186 33 175 427 300 426 432 199 300 333 454 10 400 3,675 Keys 118 388 234 405 238 92 260 926 236 96 605 555 54 570 4,777
Opening Date Q3 2019 Q4 2019 Q4 2019 Q4 2019 Q4 2019 Q1 2020 Q1 2020 Q1 2020 Q1 2020 Q1 2020 Q1 2020 Q4 2020 Q4 2020 Q4 2020 2020 2020 2020 Q1 2021 Q1 2021 Q3 2021 Q3 2021 Q4 2021 Q4 2021 Q2 2022 Q2 2022 Q2 2022 Q4 2022 2022 2023 2023 TBA TBA Opening Date Q4 2019 Q4 2020 Q4 2020 Q4 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q1 2022 Q2 2022 Q4 2022 TBA TBA Opening Date Q3 2019 Q4 2019 Q4 2019 2020 2020 2021 Q1 2021 Q3 2021 Q4 2021 Q4 2021 Q1 2022 Q2 2022 TBA TBA
Source: C9 Hotelworks Market Research
C9 Phuket Hotel Market Update: July 2019
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About C9 Hotelworks C9 Hotelworks is an internationally recognized consulting firm with extensive experience in the Asia Pacific region. Its core business focus includes: • • •
Hotel and Resort Development Asset Management / Ownership Representation Project Feasibility and Analysis
Key competencies include international hotel operator search, selection and contract negotiation, mixed use hotel and residential planning and operation reviews. A wide range of both institutional and private developers and a comprehensive portfolio of completed projects give C9 the skill set and background to focus on key issues, evaluate complex ones and assist clients in achieving solid results. Based in Phuket, Thailand and led by Managing Director Bill Barnett, who has 30 years of experience in Asia Pacific, the firm is well positioned to serve an increasing demanding marketplace.
C9 Hotelworks Company Limited 9 Lagoon Road, Cherngtalay, Thalang, Phuket, 83110, Thailand www.c9hotelworks.com info@c9hotelworks.com