Development of New Hotels in Phuket Remains Strong

Development of new Phuket hotel properties remains strong, despite ongoing political issues in the country and international financial downturn. Thirty new hotels are at various stages of development with over 4,918 rooms due to hit the supply side over the next three  years through 2011, according to market research conducted by Thailand-based hospitality consulting firm, C9 Hotelworks.

Currently on the island there are nearly 40,000 rooms in registered tourism establishments, ranging from guest houses up through to branded hotels with approximately 10,000 of these, or 25% of total supply, being international star rated. Adding in the new inventory there will be an increase by 50% of the existing international standard units, with 47% being upscale and luxury hotels, 41% midscale, 9% budget/economy and 3% extended stay (villas/condos). 2009 is set to see the largest surge in supply with 38% or 1,850 new rooms scheduled to open.

According to C9 Hotelworks Managing Director Bill Barnett, "Significant trends emerging include a greater number of Thai investment entities developing new hotels at the back of both publicly listed firms and private individuals. Much of this can be attributed to the domestic liquidity and greater availability of debt. Branding of hotels is also on the rise with 27 of the 30 hotels operated by international, regional and domestic chains. Thailand based brands such as Anantara and Centara are growing at a rapid pace and regional chains such as Langham are now expanding into the country."

"The hotel market in Phuket is seeing a strong shift of new properties at the northern end of the island in particularly Mai Khao and now even over the bridge into Phang Nga. The east coast and Phang Nga bay are set to define a new era of luxury properties at the back of offerings which include The Yamu - designed by the design dream team Philippe Starck/Jean Michel Gathy, Jumeriah Private Island and Taj Exotica," Mr. Barnett added. "There remains growing concern on possible oversupply issues facing the island in the coming years and what is currently a sleeping giant, in terms of supply growth, is the conversion of exclusive villas and condos, in the non-traditional accommodation segment, becoming a direct competitor to the mainstream hotel market."

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