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AMCHAM LUXURY RESORT MARKETS PHUKET AND SAMUI April 21, 2010

AMCHAM LUXURY RESORT MARKETS PHUKET AND SAMUI April 21, 2010. What’s ahead?. Phuket Trends and Outlook: 2009 at a Glance Q1 2010 Performance Snapshot Going Forward: Key Challenges Samui Trends and Outlook: 2009 at a Glance Going Forward: Key Challenges

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AMCHAM LUXURY RESORT MARKETS PHUKET AND SAMUI April 21, 2010

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  1. AMCHAM LUXURY RESORT MARKETS PHUKET AND SAMUI April 21, 2010

  2. What’s ahead? • Phuket Trends and Outlook: • 2009 at a Glance • Q1 2010 Performance Snapshot • Going Forward: Key Challenges • Samui Trends and Outlook: • 2009 at a Glance • Going Forward: Key Challenges • Resort Island Property: Updates and Trends

  3. Trends and Outlook

  4. Phuket • 2009 at a Glance • Annual visitor arrivals bounced back to 2007 level of 2.9 million. • Visitors were more price sensitive due to a global economic crisis exploding in H2 2008. • Discounting rates became a strategic tool to draw guests. • Signs of a travel rebound emerged in the final months of the year as economies around the world strengthened.

  5. Phuket • 2009 at a Glance

  6. Phuket • Q1 10 Performance Snapshot • Hotel occupancy and RevPAR ahead of 2009 created a strong base for performance pick up. • Q1 2010 market wide occupancy was closed at 85% reflecting a tremendous improvement of 25% from Q1 2009 and 20% from YTD 2009. • Example of uplift Patong average room rates closed at THB 4,590 (about USD 145) showing 17% increase versus YTD 2009.

  7. Phuket • Going Forward: Key Challenges • Potential for oversupply in midscale and upscale. • Low season to impact annualized figures with political unrest hitting China market and MICE rebound. • Airlift growth has created strong volume fundamentals but key concerns on Thai airways pricing increase and flight reductions. • Branded properties will penetrate markets and create destination promotion benefits but new openings to set back rate growth to 2011.

  8. Trends and Outlook

  9. Samui • 2009 at a Glance • A domino effect with an occupancy decline of 5%, average room rates 13% and RevPAR 20%. • Inverse growth trends between increased Asian visitors and a decrease in European’s. • Airlift limitation created a major reliance on market as 91% of arrivals were from domestic flights.

  10. Samui • 2009 at a Glance

  11. Samui • Going Forward: Key Challenges • Environmental control over Samui airport limiting a maximum of 36 daily flights constrains sustainable visitor growth. • Lack of developed tourism demand generators and attractions inhibit shift into mass tourism model. • International branded hotels create induced demand for the destination. • With incoming supply the market could see supply outstrip demand.

  12. Resort Island Property Updates and Trends

  13. Resort Island Property • Updates and Trends • 2009 was the year “failure to launch” said it all. • Resales became a significant segment. • Sharp shift in developer profile from foreign to Thai. • Limited distress but some banner failed projects. • Domestic buyers on rise creating low end products but increasing market share. • Off plan branded residential sluggish, while urban demand up. • Property funds to become key equity drivers.

  14. 2010? Keep the Faith

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