Phuket Service Charges Remain Stable Amid Tourism Challenges
The hospitality industry in Phuket is facing a unique set of challenges as it navigates through the aftermath of the pandemic. Despite these challenges, the average income from service charges among hotels in Phuket is expected to remain stable, maintaining a high level in the upcoming high season. Bjorn Courage, the president of the Phuket Hotels Association, shared insights on the current state of the industry and what to expect in the coming months.
Stabilizing Service Charges and Rising Room Rates
According to Courage, the average income from service charges among hotels in Phuket is expected to stabilize, although at a slightly lower rate compared to the previous high season. Typically, hotel service charges accounted for 10% of paid room nights, with the amount evenly distributed to all staff monthly. As the hospitality workforce has fully returned post-pandemic, each member of staff is paid in line with a lower service charge compared to last year’s high season.
Courage also mentioned that the occupancy rate is expected to remain high, similar to the 70-80% rate recorded in 2023. However, room rates are forecasted to continue rising, driven by strong demand and increasing operating expenses such as utilities and payroll. Despite these challenges, Phuket remains a competitive destination in terms of service charges compared to other destinations like Hua Hin or Chiang Mai.
Comparison to Other Destinations
Courage highlighted that income from service charges in Phuket is stronger than in destinations with a slower rate of recovery, such as Hua Hin or Chiang Mai. However, it may be lower than the rates recorded in hotels in Bangkok and Samui. While Bangkok attracts a stronger mix of business guests, luxury properties in Samui help raise the service charge rate. Phuket’s diverse tourism market, attracting visitors from various countries, contributes to its resilience in the face of challenges.
Foreign Tourist Arrivals and New Flight Routes
Phuket’s tourism market continues to attract foreign tourists, particularly from China and India. The country’s visa-free scheme has been a significant draw for these visitors, while Europeans and Russians benefit from longer eligible stays in the country. In a recent development, Saudia, Saudi Arabia’s flag carrier, announced the launch of direct flights from Riyadh and Jeddah to Phuket, starting from December. This new route is expected to boost tourist arrivals and further diversify Phuket’s visitor demographics.
Focus on Sustainability and Development
The Phuket Hotels Association, along with C9 Hotelworks, Greenview, and partner organizations, recently hosted the Phuket Hotels for Islands Sustaining Tourism 2024 event. This annual gathering brings together hoteliers and stakeholders across Asia to discuss sustainability initiatives. As part of their efforts, they plan to draft a white paper on sustainability and development to propose to the government in the coming months. This proactive approach demonstrates the industry’s commitment to long-term sustainability and responsible tourism practices.
In conclusion, while the tourism industry in Phuket faces ongoing challenges, the resilience and adaptability of stakeholders have enabled the region to maintain stable service charges and attract a diverse range of visitors. With a focus on sustainability and continued efforts to innovate, Phuket remains a key player in the global tourism market.