Where’s the Phuket Sandbox heading?

PHUKET, 27 August 2021: The latest full-month data from the Phuket Sandbox are encouraging for hoteliers as it demonstrates the growth in booked room nights, according to the latest data compiled by C9 Hotelworks.

Key observations are from the C9 Hotelworks Phuket Hotel Market Update Mid-Year Edition 2021*

Looking at July, nearly 200,000 nights and brought in 14,055 direct international travellers to the Thai resort island. Moving through August and looking at advance bookings in September C9 Hotelworks’ research shows the growth pattern continues.

But the consultancy firm’s managing director Bill Barnett cautions: “That said, we must also understand that while the Sandbox was created as a proof of concept for vaccinated travellers, a large portion of those arriving have been a mixed bag of returning expatriates and Thai residents, business people, workers such as teachers and yes tourists as well.”

“The social impact of reuniting families, partners, friends and others has created a strong positive in these uncertain times,” says Barnett. “And the economic boost is clear since hotel room nights, spends on local restaurants and other establishments are a much-needed boost to the economy.

“We have always said, the way forward through this crisis is baby steps,” Barnett adds, noting “the next logical step is to look at the prospects of the upcoming winter season and understand what potential markets will likely travel.”

For Phuket, two of the largest overseas markets are Mainland China and Russia. With China sidelined for what looks to be the rest this year, hoteliers are eying the Russian segment. Looking back at 2019, over 700,000 Russian travellers arrived on direct flights. With an average length of stay of 11 to 12 nights and a Sandbox requirement of 14 nights, Russia and the Sandbox seem an ideal match.

Looking at the broader situation, C9 Hotelworks newly released Phuket Hotel Market Update report underpins that International visitors are an important foundation in driving tourism growth in Phuket.

 According to the Airports of Thailand, international passenger arrivals increased for ten consecutive years to reach a record of 5.3 million in 2019 before decreasing by 80% to 1.1 million in 2020 due to travel restrictions under the Covid-19 pandemic. At the same time, this year’s total passenger arrivals between January to July dropped to 0.4 million from 1.9 million passengers in 2020.

In FY2020, the market-wide ADR was propped up by the government’s ‘We Travel Together programme. However, the Bangkok travel restrictions have effectively negated the domestic market and made the island reliant on Sandbox travellers. This has pushed market-wide demand into double digits, though rates have dropped.

Phuket became the first province in Thailand to welcome back international visitors without quarantine requirements. Based on the Tourism Authority of Thailand, the reopening of Phuket quadrupled its room night demand in July, with further gains registered in August.

Under the Sandbox programme in July, there were 14,055 international passenger arrivals with nearly 200,00 room nights booked. Looking at August by month-end, arrivals are set to show growth and looking at September bookings, and the growth trend is set to continue.

The 17 months of the ongoing pandemic have weighed heavily on hotels under development, where 67% of pipeline project projects have been delayed, mostly to 2023-24. The West Coast remains the most popular development area, led by Kamala, Patong, and Layan. Despite the ongoing COVID-19 impact on hotel owners, only two significant transactions of hotels occurred this year, though more are expected over the new 12 to 18 months.

“Moving towards the remainder of the year, it’s important to understand that Phuket and its Sandbox have created a model that is now being widely viewed across many destinations in Asia as a pathway to re-entry. For the Thai resort island, the longer-term issue is how to keep the momentum going in a volatile marketplace.”

*To download C9 Hotelworks Phuket Hotel Market Update Mid-Year Edition 2021 visit

https://www.c9hotelworks.com/wp-content/uploads/2021/08/2021-08-phuket-hotel-market-update.pdf

1 COMMENT

  1. Cant see any small success continuing. Uk has put Thailand on red list, Chinese can’t travel, leaves Russians who won’t be happy if they can’t get a drink with their meal in towns where everything is closed up !! !!! COVID infections are on the rise, nearly all local, and apparently anyone can enter Phuket by land if they wish, cars, taxis, minibuses. Which wasn’t meant to happen , to limit unvaccinated , non tested people arriving on the island. I rather think that the latest news will not encourage tourists. Expats returning, yes. Europe is having a very good summer too, no need for extra sunshine, or rain !

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