UP to 48 per cent of all new hotel developments in Phuket are experiencing major construction delays, triggered by the downturn and concerns over Thailand’s political stability, according to an industry report.
The Phuket Hotel Market Update Mid-Year Report released by hospitality consulting firm C9 Hotelworks based in Phuket, the slowdown on hotel construction sites has however not dented developers’ enthusiasm for entering the accommodation market on the island.
C9 Hotelwork’s managing director Bill Barnett said despite the delays, new developments continue to enter the stream with 38 properties offering 6,231 rooms at various stages of advancement in the construction cycle.
“Non-traditional product such as hotel managed villas and condos now represent 34 per cent of the upcoming inventory,” he said. According to the research, branded hotels outperformed non-branded properties rate wise by 33.7 per cent although the non-brand sector outperformed the brands on occupancy by 12.4 per cent.
“Cash flow is a key underlying consideration in this market with most hospitality assets largely carrying low debt ratios. Defying the trends are the luxury high-end tier properties which operate in a favourable supply and demand segment and budget tier hotels who have captured changing demographics, are experiencing business from price conscious travellers.”
The report concluded that Phuket’s long term outlook remained positive with brand concentration, growing airlift and infrastructure improvements, though recovery in 2009 has effectively been written off with prospects pushed into 2010.