Despite the Phuket international convention and exhibition centre being canned, things are looking up at Phuket.

STORY BY SIRIMA EAMTAKO

Phuket has seen one of its best years in 2012 with growths in visitor arrivals, hotel occupancy rates, hotel RevPAR (revenue per available room) and new hotel rooms. It also welcomed its first ever mega incentive group – Amway China with some 16,000 delegates. However, it has also faced bad news this year – one that shocked the country’s entire MICE industry.

Altered plans

In October, the Yingluck Shinawatra administration cancelled the 2.6-billion baht (US$84.67 million) Phuket international convention and exhibition center project, a move criticised by the industry as being politically motivated.
The government, however, claimed that the cancellation was because the project had failed to pass the environmental impact assessment due to its location in Mai Khao – the last mangrove forest land in Phuket. It also cited the completion of the 2.3-billion baht Chiang Mai international convention and exhibition centre, which is slated to officially open next year, as being the country’s latest and up-and-coming MICE facility.
Politicians from Democrat Party, which formed the previous government that gave the green light to the project, vowed to keep pressuring the current government to revert its decision and reignite the long-awaited MICE venue. The facility has been in the blueprint for about 20 years before receiving a go-ahead from the past government under the Abhisit Vejjajiva administration as part of its Thai Kem Kaeng (Strong Thailand) project.
At press time, micenet Asia understood that a local property owner was planning to develop an integrated resort, comprising five hotels, a large-scale convention and exhibition centre and an auditorium, on a hillside land near Patong Beach. A couple of MICE venue management companies were called in for discussion.

Possible consequences

For the time being, before any MICE facility projects come to materialisation, Phuket stands to lose potential large MICE businesses to Bangkok and neighbouring Asian cities, although it continues to be the destination of choice for exclusive intensive groups and leisure travelers.
Asia World Destination Management director, Max Jantasuwan, who saw MICE business for Phuket surge in 2010 when Bangkok faced political turmoil, told micenet Asia that Phuket had been outshined by Bangkok as political stability and normalcy returned to the Thai capital.
Phuket needs to have a more adequate MICE facility especially for conference groups of more than 300-400 delegates as the destination currently has limited meeting space or risk the chance of losing business to either Bangkok or other Asian cities, according to Jantasuwan.
He added: “Having a MICE facility in Chiang Mai is not the answer. Chiang Mai is not attractive enough when compared to Phuket.” Having said that, Jantasuwan said the company managed to secure a large Herbalife incentive event from the UK and Eastern Europe for 1,200 delegates to be held at Laguna Phuket integrated resort in May next year. The company also bagged a 300-pax conference for Bangkok next year, including a pre-conference for 60 top executives to Phuket.
“Phuket deserves to have a proper MICE facility to attract large groups and just small incentive groups. I strongly support any dedicated convention and exhibition centre project in Phuket,” he added. “If it is built in the controversial Mai Khao area, MICE events can make use of the wide array of up-market accommodation in Laguna Phuket (in Bangtao Beach) and in JW Marriott Phuket cluster (in Mai Khao Beach) and vice versa.
Despite the lack of proper large MICE facility, Phuket was tested for its ability to host mega group, the Amway China incentive for a month-long period between April 15 and May 15. The event was also the first time Amway China organised an event for as many as 16,000 delegates, said Martin Lie, Amway Greater China Region vice president.
The event showcased the unity among local Phuket government and private sector in working together to facilitate more than 600 delegates arriving daily and departing four days later, including excursions to attractions within Phuket as well as nearby islands.
At any one time, there were around 1,800 Amway China delegates each day at the host venue – Laguna Phuket, which is now leveraging on this event as a marketing tool to attract more large incentive groups to Phuket in the future, said Laguna Phuket assistant vice president for destination marketing, Debbie Dionysius.

Accommodation inventory grows

But in spite of the lack of a dedicated MICE venue, Phuket’s accommodation inventory looks set to continue growing.
According to hospitality consulting firm C9 Hotelworks, Phuket is expected to get 5080 new hotel rooms by 2015 up from its current inventory of more than 42,000 rooms.
Among highly-anticipated openings this year included the 105-key Regent Phuket Cape Panwa in December. The opening date for the 262-room Pullman Phuket Arcadia Nai Thon Beach, developed by the owning company of one of Phuket’s most established MICE hotel – Hilton Phuket Arcadia Resort and Spa – has been moved for a month to January 2013.
In the pipeline between now and 2015 is a mix of small and large-scale properties in various categories including the 130-room Hotel Indigo Phuket and the 70-room Park Hyatt Phuket in 2015, the 350-room Centara Grand Moringa Resort & Spa Phuket and the 318-room Grand Mercure Phuket Patong in 2014, as well as the 174-room The Nikki Beach Hotel and Spa on Bang Tao Beach in 2013.
Bill Barnett, managing director of C9 Hotelworks, said the slew of new hotel developments came on the back of an increase in visitor arrivals. He said in the first half of this year, Phuket International Airport recorded 2.32 million passenger arrivals or an 11% growth over the same period in 2011 with international visitors registering a 13% increase when compared to a 9% rise in domestic arrivals.
“Strong market-wide performance saw hotels recorded an average occupancy rate of 75% with average room rates and RevPAR spiked upwards by 5% and 8% respectively,” Barnett said.
New airlift from Mainland China, Russia, plus the massive pick up in regional low-cost carrier flights is driving a new era of mass tourism to the island and the hotel sector is a clear beneficiary of the growing trend, according to Barnett.
In a bid to cope with the anticipated growth in visitor arrivals, the Airports of Thailand is investing 5.8 billion baht on an expansion of Phuket International Airport to double its capacity from 6.5 million to 12.5 million per year by 2015.

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