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Thai tourism industry suffers as Phuket area sees up to 30% decline
Posted on 17/07/2019

EconomyThailand

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Is Thailand's number one tourist hotspot falling through the ranks? Recent statistics suggest that a tourism drought could be on the horizon for Phuket.

Has Phuket peaked?

Has Phuket peaked?
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Thailand has long been a popular holiday destination among many types of travellers, from the rich and extravagant staying in 5-star hotels, to backpacking students exploring islands while sleeping in cheap hostels. It was once a destination for everyone, with a successful and diverse tourism industry. However, recent studies have shown that the crowds are dispersing, and tourism is slowly slipping into a speedy spiral of decline, with as many as 30% fewere tourists than in previous years. But what has caused this slump?

Missing: tourism in Thailand

Missing: tourism in Thailand
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Reports have found that the tourism industry in Thailand, and specifically in Phuket, is declining due to a general worldwide reduction in tourists caused by different crises such as the stagnant EU economy and the US-China trade war. It seems that in the harsh conditions of the current world economy, people are more reluctant to organise big holidays, and Thailand is feeling the consequences. After a huge rise in travellers in the last decade, Phuket has seen a rapid rise in the construction of hotels and restaurants, which are now struggling to find customers due to this tourism decline. Some hotels have had to charge almost half as much as previous years for their rooms in order to generate income. Kongsak Phupongsakorn, head of the Thai Hotels Association, expressed concerns that tourists are avoiding Phuket because of the unstable, unpredictable political environment in Thailand as it begins to emerge from a period of military rule.

What does the future look like for Phuket?

What does the future look like for Phuket?
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This month (July), C9 Hotelworks released a study which shows a significant reduction of tourists from mainland China to Phuket, as well as a market-wide decrease in hotel performance. The study outlines the worrying imbalance between supply and demand in Thailand, pointing out the huge surplus of hotels and planned hotels versus the decreasing number of customers. However, they believe that the development of the new Greater Phuket airport in Southern Phang Nga will aid the comeback of Thai tourism, and that in the longrun, this is expected to be a temporary dip in the market.

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