Midyear report of The Phuket Hotel Market Update released yesterday by hospitality consulting firm C9 Hotelworks, said the slowdown on hotel construction sites had not, however, dented developers’ enthusiasm for entering the accommodation market in the province.

C9 managing director Bill Barnett said despite the delays, new developments continued to enter the stream, with 38 properties offering 6,231 rooms at various stages of advancement in the construction cycle. “Non-traditional product, such as hotel-managed villas and condos, now represent 34 per cent of the upcoming inventory,” Barnett said.

The research shows tourist arrivals declined 14 per cent in the first half of the year, but a combined luxury/upscale/middle-market occupancy rate of 60.4 per cent produced an average room rate of US$141 (Bt4,800).

The report also said branded hotels outperformed non-branded properties in terms of rates by 33.7 per cent, although the non-branded sector outperformed the brands on occupancy by 12.4 per cent. “Looking forward, short-term trading will focus on occupancy at the expense of long-term rate strategies,” Barnett said.

“Cash flow is a key underlying consideration in this market, with most hospitality assets largely carrying low debt ratios. Defying the trends are the high-end tier luxury properties which operate in a favorable supply-and-demand segment and budget-tier hotels that have captured changing demographics are experiencing business from price-conscious travelers.”

The report concluded Phuket’s long-term outlook remained positive with brand concentration, growing airlift and infrastructure improvements, although a recovery has effectively been written off for this year, with prospects pushed into next year instead.

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