Luxury hotels account for 89% of Phuket’s planned new room supply
Phuket has 2,653 hotel rooms scheduled to enter the market in 2027 and 2028, with 89% targeting the Luxury and Upscale segments, Knight Frank Thailand says.
Phuket’s hotel market is heading into a new phase of competition, with 89% of rooms scheduled to enter the market in 2027 and 2028 positioned in the Luxury and Upscale segments, according to Knight Frank Thailand.
The consultancy’s latest Hotel Market Research report said Phuket had 47,195 hotel rooms at the end of the first half of 2026, with about 58% classified as Luxury or Upscale.
A further 1,460 rooms are expected to enter the market in 2027, followed by 1,193 rooms in 2028. The report said approximately 89% of this planned supply would be in the two upper-tier segments.
The new developments are spread across several Phuket locations, particularly Bang Tao, Kata, Chalong, Rawai and Nai Harn. This means competition is no longer concentrated mainly in Patong, with hotels targeting similar price levels and customer groups increasingly competing within the same submarkets.
Phuket’s overall average daily rate rose 5.3% year on year in the first half of 2026 to B7,117, although occupancy declined by 3.2 percentage points. The Upscale segment recorded the strongest ADR growth, while the average rate for Luxury hotels fell.
Knight Frank Thailand research and consultancy director Carlos Martinez said the concentration of new supply in the upper-end market did not guarantee the success of Luxury hotel projects. With guests having more options, hotels need clear selling points and differentiation to persuade customers to pay the rates being sought, he said.
The report said operators were increasingly looking beyond room revenue to areas including food and beverage, wellness, activities and events. Some upper-end resorts may also use branded residences to improve the economics of their developments, although this requires phased planning, brand-standard controls and long-term resort management.
Knight Frank expects construction costs to rise by about 3-5% in 2026. Infrastructure constraints, approval procedures and phased development could alter the opening schedules of projects in the pipeline.
The consultancy said existing hotels should not rely on delays to new projects to ease competitive pressure. Properties seeking to maintain room rates and market share will need to differentiate their products, services and guest experiences while improving management efficiency.
