Phuket

Mid-Year Edition July 2013

2013 Hotel Market Update
2013 Mid Year Forward Outlook
Scheduled ights from Mainland China to Phuket
accounted for 18% of the total international
scheduled ights in H1 2013, while China charter
ights accounted for 43% of all charter trafc.
China originating scheduled ights achieved a
5-year CAGR growth of 38%, while China charter
ights grew by 73%.
Hotel market-wide occupancy at 76% is the highest
since 2008. Increased demand especially from
international visitors pushed average room rates
and RevPAR up by 7% and 8%, respectively.
Hoteliers reported higher than normal demand in
Q1, with weaker growth in Q2 and Q3 expected,
so full year 2013 growth expectations will be
dependant on Q4.

Nearly half a million Mainland

Chinese visitors in rst half 2013
The number of Mainland Chinese
visitors to Thailand registered a
record high of 2.3 million in H1 2013,
compared to 1.2 million in the rst
half of 2012. A total of 12.7 million
international visitors arrived in
Thailand in the rst six months of this
year, of which China accounted for
18% of the total.
In 2012, the number of arrivals from
China to Phuket was just over half
a million which has skyrocketed from
a lowly 37,948 in 2007. From January
through June this year, the number
has already reached 457,401 and is
expected to gain further momentum
for the remainder of the year.
Mainland Chinese arrivals at Phuket
International Airport represented 24%
A quarter of all international
visitors to island are Chinese

A rising number of cities with direct ights from

China to Phuket is now 22, which is up from 7 in
2007. The expansion of Phuket International
Airport is underway and is scheduled for completion
in 2015. The airport has been able to manage
capacity through of-peak arrivals/departures,
particularly with China scheduled and charter
ights.
Increasing number of visitors from emerging markets
such as China and Russia are shifting demand from
independent travelers to the wholesale segments.
A knock on efect to tourism attractions is expected.
More developers are likely to be attracted to the
hotel branded residence sector with a substantial
increase in projects anticipated.
Bill Barnett, Managing Director, C9 Hotelworks
of total overseas Asian travelers in
2010 and now reects a hefty 54% in
the rst half of 2013.
Phukets tourism industry is now rmly
reecting the growing prominence of
Asian based visitors, but at the same
time is being challenged to balance
commodity-based emerging markets.
Source: Phuket Airport Immigration and C9 Hotelworks Market Research
% Number of Passengers
150
100
50
0
-50
600,000
500,000
400,000
300,000
200,000
100,000
2011 2012 H1 2012 H1 2013 2010 2009
No. of Chinese Passengers to Phuket Growth of Chinese Passengers to Phuket
Mainland Chinese Airport Arrivals
TOURISM
C9 2013 Hotel Market Update: July 2013 2
Airline Indicators

The number of international passengers as well as international ights has sharply increased since
2009 and continues to surpass the domestic sector ever since it rst did in 2011.
In H1 2013, international arrivals grew at 30% compared to H1 2012, accounting for 57% of total
inbound passengers. Domestic arrivals rose at 9% over the same period.
Tourism Indicators

In the rst half of 2013, total visitors to Phuket grew at 32% vs. H1 2012. China topped the list at
27% of total arrivals, recording major growth of 100%. Other key market contributors were Russians
at 17%, South Koreans 7%, Australians 7% and Malaysians with 4%.
Market share of traditional Western European visitors dropped from 37% in 2009 to 22% in H1 2013.
Growth in
direct ights
over a 5-year
period has
resulted in
CAGR of 19%
Russia and
Mainland
China combine
for 44% of
international
market share
Airport Visitor Arrivals - Half Year
No. of International Passengers
Annual Growth of International Passengers
No. of Domestic Passengers
Annual Growth of Domestic Passengers
Source: Phuket International Airport and C9 Hotelworks Market Research
Number of Passengers %
H1 2012 H1 2011 H1 2013 H1 2010 H1 2009 H1 2008 H1 2007
100
80
60
40
20
0
-80
-60
-40
-20
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
Top 5 Source Markets
H1 2012 H1 2013 Annual Growth
Source: Phuket Airport Immigration and C9 Hotelworks Market Research
Number of Visitors %
Malaysia Australia South Korea Russia China
120
100
80
60
40
20
0
-20
100,000
200,000
300,000
400,000
500,000
CAGR - Compound Annual Growth Rate
C9 2013 Hotel Market Update: July 2013 3

Content and analysis is based on Mainland China, excluding Hong Kong SAR.
Seasonal dynamics of China demand, coupled with the departure of the traditional Eurocentric
market is creating a new inux of trade in what was once Phukets of-season.
20% of Chinese
visitors to
Thailand come
to Phuket
Shanghai,
Chongqing and
Chengdu are
the top cities of
origin for ights
to Phuket from
the Mainland.
Chinese Visitors to Thailand vs. Phuket
No. of Chinese Visitors to Phuket
Annual Growth of Chinese Visitors to Phuket
No. of Chinese Visitors to Thailand
Annual Growth of Chinese Visitors to Thailand
Source: Department of Tourism, Department of Civil Aviation and C9 Hotelworks Market Research
Number of Visitors %
H1 2013 H1 2012 2012 2011 2010 2009
350
300
250
200
150
100
50
0
-50
500,000
1,000,000
1,500,000
3,000,000
2,500,000
2,000,000
Peak periods
for Mainland
visitors to Phuket
is July/August
and Chinese
New Year
2011 Chinese Visitors
2011 Other Visitors
2012 Chinese Visitors
2012 Other Visitors
Source: Phuket Airport Immigration and C9 Hotelworks Market Research
Market Seasonality
Number of Visitors
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
100,000
50,000
200,000
300,000
150,000
250,000
350,000
400,000
China Market
Passenger Arrivals from Top 10 Cities
Source: Phuket Airport Immigration and C9 Hotelworks Market Research
15%
14%
12%
6%
3% 3% 3%
3%
2% 2%
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Number of Visitors
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
HOTEL MARKET
C9 2013 Hotel Market Update: July 2013 4
Bangtao
delivered the
highest RevPAR
growth of 25%,
closely followed
by Surin and
Kamala with
24%
Performance by Key Locations Half Year
H1 2012 Average Room Rate
H1 2012 Occupancy
H1 2013 Average Room Rate
H1 2013 Occupancy
Source: C9 Hotelworks Market Research
% US$
Mai Khao Surin & Kamala Karon & Kata Bangtao Patong
400
350
300
250
200
150
100
50
20
40
60
80
100
Hotel Performance
Market-wide
RevPAR in rst
half 2013 is
highest since
2008
Budget and
economy tier
demonstrated
highest growth
of demand
Midscale and
upscale hotels
have been
efective in
increasing
average room
rates
By Tier
Change
Luxury 9%
Upscale 4%
Midscale 5%
Budget &
Economy
-1%
Change
Luxury 0%
Upscale 5%
Midscale -4%
Budget &
Economy
7%
Change
Luxury 9%
Upscale 11%
Midscale 0%
Budget &
Economy
8%
250
200
150
100
50
US$
US$
Full Year (11 vs.12)
Average Room Rate
Source: C9 Hotelworks Market Research
Half Year (12 vs.13)
100
80
60
40
20
%
Full Year (11 vs.12)
Occupancy
Source: C9 Hotelworks Market Research
Half Year (12 vs.13)
Source: C9 Hotelworks Market Research
Half Year (12 vs.13)
250
200
150
100
50
Full Year (11 vs.12)
RevPAR
A total of seven projects with 989 units is currently available in the market. There has been a marked
rise of new launches in 2013 with nearly 50% of new inventory up for sale this year.

HOTEL MANAGED RESIDENCES MARKET

C9 2013 Hotel Market Update: July 2013 5
Majority of
supply is located
in Bangtao and
Patong with
37% and 21%
respectively
Market Trend

The Phuket hotel managed residences sector is rapidly emerging in the broader island real estate
market as a key segment. Investment buyer demand is outpacing end users, while lower pricing points
and unit sizing are dening the oferings.
Domestic Thai buyers are on the rise with key international purchasers from Singapore, Hong Kong,
Mainland China and Eastern Europe.
Average market take-up
rate is 6.5 units per month,
and average pricing per
square meter is US$4,316
53% of total units have
mandatory rental
management programs
Source: C9 Hotelworks Market Research
Project Name
The Lofts at Laguna Village
Laguna Shores - Phase I
Laguna Shores - Phase II
The Privilege Residences Patong
Amari Residences Phuket
Phumundra The Condo
Icon Park
Baan Mai Khao
Location
Bangtao
Bangtao
Bangtao
Patong
Patong
Koh Kaew
Kamala
Mai Khao
Total
Units
25
229
108
49
160
130
82
206
Year
Launch
2008
2012
2013
2010
2013
2010
2011
2013
Source: C9 Hotelworks Market Research Source: C9 Hotelworks Market Research
Current Inventory
Number of Units
600
500
400
300
200
100
Optional Rental Program Mandatory Rental Program
Units Available Units Sold
Unit Price and Absorption
Per Month US$/sq.m.
6,000
5,000
4,000
3,000
2,000
1,000
7.0
6.0
5.0
4.0
3.0
2.0
1.0
Optional Rental Program Mandatory Rental Program
Price Sales Pace
51%
49%
69%
31%
C9 2013 Hotel Market Update: July 2013 6
HOTEL SUPPLY
Hotel Openings
Hotel Indigo Phuket Naithon Beach Resort
Nikki Beach Hotel and Spa
Novotel Phuket Kamala Beach
The Naka Phuket
Hyatt Regency Phuket Resort
Eastin Easy Patong Phuket
Sleep With Me Hotel
Grand Mercure Phuket Patong
U Zenmaya
All Seasons Phuket Patong Beach
Rosewood Phuket
The Patong Bay Hill Hotel & Resort
Ramada Phuket Deevana
Centara Grand Moringa Resort & Spa Phuket
Four Points by Sheraton Phuket, Patong
Aloft Phuket Patong
Kata Rocks
Eastin Yama Hotel Kata Phuket
The Hermitage Hill
B2 Phuket
Days Hotel Phuket Town
Point Yamu by COMO
Panwa Beach Resort by Marco Polo (Extension)
Park Hyatt Phuket
Nai Thon
Bangtao
Kamala
Kamala
Kamala
Patong
Patong
Patong
Patong
Patong
Patong
Patong
Patong
Patong
Patong
Patong
Kata
Kata
Kata
Phuket City
Phuket City
Cape Yamu
Cape Panwa
Koh Siray
135
174
168
94
202
55
230
318
50
250
80
744
206
350
290
250
34
105
80
30
120
79
223
70
2015
Q2 2014
Sep 2013
Feb 2014
2014
Sep 2013
Oct 2013
Q1 2014
Q2 2014
2014
Q3 2015
Q4 2015
Jan 2016
TBA
*
TBA
*
TBA
*
Dec 2013
Q2 2014
Q4 2014
Q1 2014
Jul 2014
Nov 2013
Q1 2014
2016
Source: C9 Hotelworks Market Research
Hotel Name Location Keys Opening Period
Development Insight

As of June 2013, there were 24 new hotels with 4,337 keys in the Phuket pipeline. Patong leads with
65% of total additions to supply. A notable reopening set for December 2013 is the extensively
upgraded Anantara Phuket Layan Resort (formerly Bundarika) with 77 villas and rooms.
55% of total keys under development are midscale, with upscale properties accounting for 27%.
1,646 new
rooms will
enter the hotel
market in 2014
New Supply by Opening Year
Rooms Hotels
* To Be Announced
* To Be Announced
Source: C9 Hotelworks Market Research
Number of Rooms Number of Hotels
TBA* 2016 Onwards 2015 2014 H1 2013
14
12
10
8
6
4
2
2,500
2,000
1,500
1,000
500
Hotel Pipeline Map
Source: C9 Hotelworks Market Research
C9 2013 Hotel Market Update: July 2013 7
Point Yamu
Koh Siray
Kata Rocks
Four Points
Aloft
Grand Mercure
Nikki Beach
Novotel Kamala
Centara Grand Moringa
All Seasons Hotel
Sleep With Me
Park Hyatt
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The Hermitage
Eastin Yama
Patong Bay Hill
Hotel Indigo
Hyatt Regency
U Zenmaya
Ramada Deevana
The Naka
Eastin Easy
Rosewood
Panwa Beach Resort
B2 Phuket
Days Hotel
About C9 Hotelworks
C9 Hotelworks is an internationally
recognized consulting rm with extensive
experience in the Asia Pacic region.
Its core business focus includes:
Hotel and Resort Development
Asset Management / Ownership Representation
Project Feasibility and Analysis
Key competencies include international hotel operator search,
selection and contract negotiation, mixed use hotel and
residential planning and operation reviews.
A wide range of both institutional and private developers and a
comprehensive portfolio of completed projects give C9 the skill
set and background to focus on key issues, evaluate complex
ones and assist clients in achieving solid results. Based in Phuket,
Thailand and led by Managing Director Bill Barnett, who has
28 years of experience in Asia Pacic, the rm is well positioned
to serve an increasingly demanding marketplace.
Bill Barnett
Managing Director
C9 Hotelworks Company Limited
9 Lagoon Road, Cherngtalay,
Thalang, Phuket, 83110, Thailand
(Ofce located at the entrance of Laguna Phuket)
T: +66 (0)76 271 535
F: +66 (0)76 271 536
www.c9hotelworks.com
info@c9hotelworks.com
The Source for all Hotel and Real Estate News
www.thephuketinsider.com