Phuket loses its hotspot standingCity talk | Sophie Deviller 21 Oct 2019
Hotels on Thailand's most popular holiday island have been forced to slash prices, with rooms left vacant and beaches sparse as tourist chiefs struggle with a plunge in Chinese visitors caused by the US trade war and a stronger baht.
Located on the Andaman Sea and known for its beaches and nightlife, Phuket was the second most-visited destination in Thailand last year and a good gauge of the state of its crucial travel industry.
Tourism accounts for 18 percent of Thailand's gross domestic product, and Chinese holidaymakers make up more than a quarter of total arrivals.
While 2.2 million people from China visited in 2018, according to official figures, numbers for January-September this year were down almost a fifth year-on-year.
Claude de Crissey, France's honorary consul in Phuket and owner of about 40 rooms in the Patong Beach area, says Chinese tourists are usually present even during the current low season.
But "that was not the case this year," he says, adding he had to lower his prices by as much as 50 percent.
The problem is not just in Phuket, with hotels also struggling to fill rooms in the resort of Pattaya on the mainland and on Koh Samui island.
Trade tensions with the United States have already made some Chinese reluctant to take holidays owing to uncertainty back home, while the Thai baht has also risen around 10 percent against the yuan this year.
A boating disaster off Phuket's coast that killed 47 Chinese holidaymakers earlier this year has scared some off as well.
"We're worried," said an industry insider who declined to be identified due to the sensitivity of the topic in a country where tourism provides thousands of jobs.
Adding to the headache is the fact that more than 3,000 new hotel rooms are being constructed on Phuket, raising the question of who will fill them.
"In terms of business it's not good," says Kongsak Khoopongsakorn, vice president of the association of hotels in Thailand and director of Vijitt Resort. "We have more hotels, more rooms to sell, more restaurants, more coffee shops."
Still, tourism authority chairman Yuthasak Supasorn says he remains "optimistic,"saying "we should reach our goal of 39.8 million foreign visitors this year."
But that is only up from 38.2 million in 2018, compared to the jump seen from the previous year's total of 35.6 million.
Now hoteliers and tour package operators are targeting visitors from elsewhere, particularly India, which experts see as a huge untapped market.
"We're counting on the Indians to revive the sector," Kongsak admits.
A rapid expansion of the middle class, increased direct flights and visa-free travel have prompted Thailand to revise forecasts upward.
It now expects two million Indian tourists this year after an increase of nearly 25 percent year-on-year in the first seven months.
But for now, the lower arrivals is evident on the streets of Phuket.
"I've never seen anything as bad as what it is at the moment," says Paul Scott from Australia, who has been going to Thailand for 15 years.
He mainly blames the stronger baht for the drop-off but also the fact that Thailand isn't the untouched vacation paradise it once was. "Now it's not so new," he says, "and it's not cheap."