PHUKET, 25 March 2025: A newly released C9 Hotelworks Phuket Hotel & Tourism Market Update 2026 highlights a structural shift underway, as Phuket prepares for its next phase of tourism growth driven by infrastructure expansion and accelerating urbanisation.
The market update compiled by C9 Hotelworks Managing Director Bill Barnett indicates the island’s airport is currently operating at 39% above capacity, handling approximately 17.4 million passengers in 2025, with major upgrades planned through Phase II expansion and the proposed Andaman International Airport.
New zoning reforms and integrated developments are transforming key areas such as Bangtao into more structured urban clusters. Together, these changes signal Phuket’s transition from a resort-driven island toward a more institutionalised tourism market.
Against this backdrop, Phuket’s demand profile is diversifying. Total arrivals reached 8.8 million in 2025 despite a 44% decline in Chinese visitors, reflecting a combination of Thai baht appreciation, shifting travel sentiment, and increased competition from alternative destinations such as Japan and Vietnam. This has accelerated the diversification of source markets, with Russia remaining the largest contributor, while India and South Korea recorded the strongest growth.
The impact of this shift is evident in hotel performance. Average daily rates rose by 5% while occupancy declined by 6%, indicating that rate growth is being sustained rather than driven by broad-based demand expansion. At a submarket level, luxury enclaves such as Surin and Mai Khao continue to command rate premiums. At the same time, Patong remains volume-driven, reinforcing the widening gap between yield-focused and mass-market locations.
Looking ahead, Phuket is entering a supply-driven expansion cycle. With 41 new hotel projects and over 8,000 keys in the pipeline, new supply is concentrated in integrated lifestyle destinations such as Bangtao/Cherngtalay.
At the same time, tighter enforcement of unlicensed accommodations is expected to rebalance the competitive landscape. As infrastructure improves and regulatory oversight strengthens, Phuket’s growth trajectory in 2026 is expected to normalise, with long-term performance increasingly dependent on product differentiation and the ability to capture evolving regional travel demand.
To download and read the C9 Hotelworks Hotel & Tourism Market Update 2026, CLICK.
(Source: C9 Hotelworks)
