Phuket’s Tourism Resurgence: Russian Visitors Lead the Way

March 28, 2023

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The resort island of Phuket in Thailand is experiencing a post-pandemic tourism resurgence, with a surge in Russian travellers during the high season. However, behind the headlines, regional visitors from India, Malaysia, and Singapore played a significant role in setting the stage for a recovery in the fourth quarter of last year. The lifting of travel restrictions in Thailand in October 2022 sparked a significant increase in the number of tourists visiting the island, driving market-wide occupancy rates up to 48%, compared to the previous year’s COVID-19-impacted low of 8%.

Phuket’s winter high season, which runs from November to March, has seen the return of traditional visitors from Northern Europe and Scandinavia. However, the primary driving force behind the island’s tourism recovery has been Russia and a few other Eastern European countries, despite limited direct airlift and increased airfares. Despite these challenges, the Russians came in numbers, with stays increasing by over 50% compared to the average 11-day stay in previous years.

The arrival of tourists from Russia has had a significant impact on Phuket’s economy, as it has created a spark in the recovery of the island’s hotel and tourism businesses, as well as in retail, transportation, and real estate. In fact, the Eastern European market has become the most active direct foreign investment (FDI) leader in Phuket’s booming property market, driving up land prices across the island.

Exterior Rendering of the Radisson RED Phuket Patong Beach

C9 Hotelworks’ newly released Phuket Hotel Market Update 2023 highlights some key trends in Phuket’s hospitality industry, including a shift towards franchise agreements, changes in hotel brands, and conversions. For example, the Destination Group has signed agreements with InterContinental Hotels Group (IHG) for two Holiday Inn properties and two with Radisson, while one of the island’s largest hotels, the Arcadia, has been reflagged as a Pullman under ACCOR. Additionally, Thailand’s hospitality giant, AWC (Asset World Corporation), has plans to upgrade and convert Westin Siray Bay into a luxury resort under the Ritz-Carlton brand.

However, the growth of Phuket’s tourism industry has put a significant strain on the island’s transportation infrastructure, leading to traffic problems and delays. The recent closure of an important thoroughfare between the popular Patong tourist area and its central island feeder road due to a landslide is a clear example of the fragility of Phuket’s transportation network.

C9’s Managing Director, Bill Barnett, who has lived and worked in Phuket for over 20 years, believes that a dedicated tourism master plan is crucial for the island’s long-term success. The new Phang Nga airport, the expressway, and the Patong tunnel projects are essential for Phuket’s future growth, as the island has already experienced urbanization and has nearly 100,000 registered hotel rooms.

To read and download C9 Hotelworks Phuket Hotel Market Update 2023, click.

In conclusion, Phuket’s tourism industry is well on its way to recovery, with Russian visitors leading the way. The island’s hospitality industry is also undergoing significant changes, with hotel owners shifting towards franchise agreements and changes in brands. However, the growth of Phuket’s tourism industry has created challenges for the island’s transportation infrastructure, highlighting the need for a dedicated tourism master plan for the island’s long-term success.