The state of Phuket’s hotel industry in H1 2022

Due to its popularity as a tourist destination, Phuket is expected to welcome at least 10 million foreign visitors this year

Deputy governor Pichet Panapong stated that Phuket welcomed more than four million visitors in the first eight months of 2022, generating approximately THB66 billion (USD1.7 billion).

The Bangkok Post reported that the province sees 3,000 to 5,000 international arrivals daily, which is at least 40 percent of 2019 numbers. Indian tourists visited the most with 120,000 arrivals from 1 May to 21 September.

The hotel industry in Phuket is heavily reliant on foreign visitors, which was why it was the most affected sector during the pandemic, according to Knight Frank. Many hotel operators had to improve their business models and switch their focus to domestic tourism.

In July 2021, the government prioritised the province’s market recovery by launching the pilot programme to reopen the country’s borders, which went through several changes based on the development of COVID infections.

In 2019, Phuket welcomed more than nine million tourists, including a record number of Mainland Chinese. There was an influx of entry-level investment properties throughout the province, mostly in large condominium blocks, reported The Thaiger. 

The COVID-19 pandemic cut that trend short that even foreigners who have purchased off-plan properties were not allowed to visit for handovers of completed units.

The change in market conditions led to an increase in rental demand for villas and an increase in home purchases for completed homes. Phuket’s promise of slower, outdoor-oriented living attracted Thais from Bangkok and expats from Hong Kong and Singapore to name a few.

More: Thailand revises economic growth forecast, foreign investments may start picking up again soon

It has been a good start to 2022 for the Phuket hotel industry. The average daily rate (ADR) of luxury and upscale hotels increased by 21 percent YoY from H1 2021. However, room rates remained 30 percent lower than before the pandemic.

At the end of June 2022, there were 24,263 luxury and upscale hotels, with 698 rooms added in H1 2022.

Due to its popularity as a tourist destination, Phuket is expected to welcome at least 10 million foreign visitors this year.

In 2018, THB471 billion (USD12.4 billion) in revenue was generated by 14.5 million local and foreign tourists.

The Property Report editors wrote this article. For more information, email: [email protected].