Decline in global travel leads to hard work for industry to recover
Events in Q4 notably the closure of Bangkok airports by People’s Alliance for Democracy (PAD) demonstrators have now overshadowed and negatively impacted visitor numbers and units sales. Stats for Q3 are as follows.
We have seen a slowdown in sales and new launches in the Q3 2008 and we expect this to continue over the coming year. Global economic conditions and continued political conflicts have had a negative effect on tourism, and we believe that the 2008 tourist “high” season will be the worst in terms of arrivals since 2005 (the post-tsunami year).
Phuket residential is dependant on visitor to secure sales, buyers no longer feel pressure to complete sales although there is little completed unsold stock.
As a resort property destination, the performance of Phuket’s property market is closely linked to tourism, and in particular, high-end tourism. Many project launches are planned to coincide with “high” tourist season, and many buyers of Phuket property are repeat visitors who have enjoyed their time on the island and have decided to purchase property as a result.
As such, we closely monitor tourism statistics in Phuket. Unfortunately, as a result of worsening global economic conditions, which have led to a decline in global travel, and continued political issues domestically, the number of arrivals at Phuket International Airport fell considerably y-o-y in Q3 2008, and indications are that the situation has worsened since the start of Q4 2008. Many hotels are reporting poor occupancy, and we expect this tourist “high” season to be one of the worst performing in recent years. It will take hard work for the industry to recover from this setback and to regain the public’s trust after many tourists were stranded across Thailand due to the PAD’s forced closure of numerous airports.