Phuket Hotels and Tourism Coronovirus Update

In what is a continuing storyline on the global coronavirus crisis, the impact on Phuket tourism market is a creating challenging landscape.

Looking at the largest single drop according to STR data, was the week of January 20^th to 27^th in the lead up to Chinese New Year, market-wide occupancy fell from 90% down to 60%.

As of 17th February, occupancy was sitting at the mid-50% level, though rate room rates have remained static during the past month. This week hotel numbers are shifting downward as sentiment worsens due to travel advisories and a uncertainty over return travel are key issues.

Moving over to the aviation gateway of Phuket International Airport as of the 25^thFebruary, month-to-date arrivals compared to the same period last year were down 37.51%.

Looking at Bangkok’s Suvarnabhumi Airport the comparative figure is a negative 45.23% which ramps into the Phuket situation given it’s a feeder of business to the island.

Forward trading remains speculative, but there remains widespread postponement and/or cancellations of MICE events.

While there is some movement to attract the Thai domestic market by the TAT, but all of Thailand’s markets are chasing that same tail. The upcoming Songkran period is likely to be dominated by staycations versus international trips abroad.

Expectations are that that declining demand and airlift are key factors impacting occupancy and we are starting to see rate-driven promotions which will undoubtedly hit ADR’s.

Perhaps the biggest wild card is the mounting number of travel advisories across the globe based on COVID-19 and for now travel and tourism are working onday-to-day management of the situation.

As the majority of hoteliers are looking for some historical context and the closest thing to grab onto is the SARS crisis in 2003. For Thailand the market hit a freefall over five months from March to July, as market-wide occupancy bottomed out just under the 30% level in May of that year.

Or course, what followed was the big bounce and pent up demand drove recovery in August.

In the case of the coronavirus the only takeaway from the current situation is a bit like the Back to the Future gab about where we’re headed, there aren’t any roads.