Tourism and Property Investment Surge Drives Phuket's Economy to New Highs

Thailand’s tropical paradise island Phuket continues to out-perform its Asian rivals in the intense competition for tourists who demand luxury accommodation managed by some of the world’s most prominent hotel organisations.

This in turn, has spurred substantial levels of investor interest in the destination’s every-growing property market and higher than ever interest from international hotel management companies searching from new projects along the Andaman coastline.

Tourist arrivals in Phuket reached 4.7 million in 2006, which in turn produced tourism-related spending of US$1.7 billion, up 87% from 2005, according to research from the Kasikorn Bank’s Research Centre. This year Phuket is predicted to welcome 5.2 million tourists who will spend US$2 billion during their time on the island.

These numbers are being driven by the emergence of low-cost carriers serving the island’s airport. Tiger Airways now flies three times daily from Singapore, Jetstar Asia has started direct flights from Sydney and Dragonair recently resumed daily flights from Hong Kong. Rights for direct flights from the Middle East are being finalised now with flights expected to commence in the near future.

According to Phuket-based C9 Hotelworks Managing Director, Mr Bill Barnett, the trend towards luxury accommodation developers selecting an international hotel chain to manage the property – and ensuring rental returns for owners – has elevated Phuket’s investment landscape to its strongest position in many years.

Mr Barnett is involved in many projects on the island including heading up project marketing at the Mövenpick Residence Karon Beach Phuket.

He said the Mövenpick Residence is a prime example of internationally managed projects driving demand, with other leading operators such as the Shangri-La, Raffles, Jumeirah, Taj, Dusit, and Banyan Tree groups poised to launch similar projects while leveraging their brand equity to inspire investor confidence.

“Phuket has recaptured its place as Asia’s premier resort location and is now headed towards becoming a world class destination capturing an increasing international marketplace,” Mr Barnett said.

“Niche products such as the Moevenpick Residences are capturing a global phenomenon with international brands now aligning themselves with mixed use developments and offering high yielding lifestyle investments.”

“Phuket’s property market is as robust as it has ever been with many major institutional investors entering the sector, and this, combined with a boom in the Phuket travel market, points to internationally managed apartment ownership being a sound investment choice” added Mr Barnett.

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