Phuket hotels slash rates as weak low-season demand drags occupancy to 30-40%
Phuket hotels say the island is enduring its weakest low season in six to seven years, with occupancy down to 30-40% and room rates cut by as much as 80% amid weak European demand, soft Chinese and Middle East markets, and high airfares.
Phuket is facing its slowest low season in six to seven years, with average hotel occupancy rates falling to 30-40% this month as weak overseas demand and high travel costs weigh on bookings.
Somjai Tungkoo, vice-president of the southern chapter of the Thai Hotels Association, said summer holidays usually bring large numbers of European tourists, but demand this year has been weaker than expected. She said many travellers have chosen cooler destinations within Europe rather than taking long-haul trips as the continent has experienced record temperatures since June 20.
Over the weekend, the Czech Republic, Germany and Poland recorded new heat records of 41.9°C, 41.7°C and 40.5°C respectively, while France’s national weather service forecast a possible recurrence of a heatwave in July.
Somjai said travellers are also worried about high airfares and are reluctant to spend as much as usual because of economic uncertainty. Travel costs to Phuket remain particularly high, with return domestic airfares from Bangkok averaging nearly B5,000, mainly due to increased airfare and fuel surcharges.
The weak market has prompted hoteliers to offer unusually deep discounts. Somjai said low-season room rates are normally around 50% lower than in the high season, but this year they have dropped by 70-80%. Hotels and resorts that typically charge B5,000 per room in the high season have cut rates to less than B2,000.
She said the discounting began at beachfront properties before spreading across the island as hotels tried to stay competitive during the slowdown.
Phuket hotels are also facing soft demand from other key markets. Somjai said the Middle East, one of the island’s main targets during the rainy season, has yet to resume overseas travel because of unrest in the region. She added that the Chinese market has also not recovered as strongly as in the past.
Most hotels are now waiting for forward bookings for the high season, with new inquiries expected to increase from this month. In the meantime, many operators have used unpaid leave to reduce labour costs.
Hotel operators have called for government relief measures and stimulus, including soft loans for affected businesses and a co-payment subsidy scheme for domestic travellers to help offset travel expenses.
