Tourism is clearly a big part of Thailand’s economy. Globally, Phuket is actually the third most popular beach island destination in the world and it’s leading the way for the country of Thailand to reopen. You’ve probably seen videos of empty streets and closed businesses in tourist towns during Covid-19, but what can people expect to see when they visit post Covid-19
In this video we discuss the Thai tourism and real estate recovery with globally recognized hospitality, tourism and real estate advisor, Bill Barnett. He’s the managing director of C9HOTELWORKS and the founding advisor of the Phuket Hotel Association.
What do you think people can expect when they come to Phuket as a tourism destination?
Phuket is open I think people have to understand they see pictures of empty beaches they see pictures of empty streets as well this is not the real Phuket you know again what why do people come to forget for tourism to you know again there’s great experiences you’re able to do things as a normal tourist would yeah things are open street food is here uh restaurants are open as well you can do activities in the ocean as well so all these experiences are open and Phuket’s ready to welcome back tourists.
What do you think this means for the investment market and more specifically the investment markets surrounding tourism?
I think you know certainly Phuket for resort grade real estate is probably the leading territory market in in Asia you know certainly in terms of about three to four billion dollars of high-end villas on this island there’s a demonstrated long history over the past 20 years of premium real estate i think what we’ll see is a lot of pent up demand over the past 14 to 16 months we’ve seen domesticated demand driving things we’ve seen a lot of Bangkokians coming and buying large luxury villas as well projects like the Anantara the Avedini Hills they’ve seen a lot of transactions to Thai buyers out of Bangkok at big numbers you’re talking five to ten million dollars I think in terms of the broader real estate i think this is people want to come to Phuket and see the properties so when we talk to developers like Laguna they say they have a lot of transactions ready people want to do the final check on it they want to do due diligence they want to touch and feel it as well so that’s what’s pending transactions so i think again you’re going to see people who want to come back and these are early people were traveling to forget people always saying it’s too difficult under the sandbox to come back but i mean under these rules when people want to come and do business this is an ideal time for investors to come back into the market.
What I’ve seen is a massive increase in buyers that are looking for lifestyle property, they want a villa to live in and they want somewhere that they can call home away from home.
Bill; This is a trend we’re seeing every you know we cover all the Asian markets we’re seeing this in valley we’re seeing this in in some of the Malaysian resort markets certainly here in Thailand we’re seeing you know the Covid lifestyle change, now you can work from home you can conduct your daily meetings on zoom people there’s a big generator of demand certainly is Phuket’s international schools we’re seeing people come in from what’s happened in Hong Kong uh you know certainly with political issues there they’re saying maybe we’ll go make a base in Phuket even from Bangkok with them with the worst thing air pollution as well lifestyle i think the one thing that Covid-19 has done for everybody is to make them reassess their lives and lifestyle and that’s important shift and people feel the destination like Phuket which has a lot of greenery has a lot of outdoor spaces this is perfect for a Covid-19 type scenario to kind of live a healthier life you know.
Asa; Real estate developers used to focus on these small hotel style boxes and I’m guilty of selling enough of them.
Bill Barnet; Get me out of the box now I think one thing coming from hospitality and real estate is get me out of the box people are gonna we’re gonna see smaller projects we’re gonna see more boutique projects come up people want more spaces as well i think they want more public spaces so in terms of those uh big box uh type Condo hotels i think we’ll see less of those and we’ll see more bespoke projects.
Asa; Okay so what’s your prediction of businesses opening up slowly but surely or do you think we’re gonna see?
Bill; This is baby steps and we’re learning to travel again we’re looking at the beginning of a new real estate cycle we’re looking at the beginning of a new travel cycle. People say, is Phuket going to go back to where it was? In time, possibly three to four years it’s going to take.
You know again who gets blessed with geography we’re within six to eight hours, about a third of the world’s population, so that metric is not going to change. Are people going to travel as much in time but it’s going to be step by step to get there. So certainly in terms of tourism we’ll see people travel, you know we’ve seen in the U.S we’ve seen it in Europe right now people can’t wait to travel again but it’s certainly not going to be just falling over and saying we’re back to where we were again everything works in cycles real estate’s the same way as it’s tourism.
So who do you think we can expect to see traveling to Phuket first?
Bill; I mean that’s the main thing is we’ll see long-haul travel we’ll see highly vaccinated countries we’ll see where airlift you can’t stay there if you can’t get there so right now we’re seeing flights coming in from the UK we’re seeing flights coming in from Germany, from north America as well through Singapore the middle east carriers are boom for Europe so we’re seeing those spins right now. For Asia unfortunately Asia has mass outbreaks all across Asia and you have to consider if I come from Singapore even though I come to the sandbox when I go back I’ll have 21 day quarantine, wow, for the UK we’re still on amber status we’d like to be back to green status but that’s not happened yet so it’s a two-way street so much of Phuket. Phuket can offer and say we are reopened but at the end of the day there has to be demand there the one positive sign is there is demand there’s people trying to get flights there’s people booking uh for their certificates of re-entry there’s demand i mean the worst cases scenario is to reopen and there is no demand but there is overwhelming demand of people who want to come back but these are not your typical travelers these are people who maybe own businesses live part-time in in Thailand and want to come back first these are the arrivals.
Asa; Lifestyle travelers. Yes, that’s basically the trend that we see as well. At Easy Living Phuket we have a few different arms to the business we have the real estate arm, @EasyLivingPhuket, We have the media arm @AsiaLifestyleMagazine, but also we have the insurance arm @AllPhuketInsurance as well.
Bill; So a lot of need for that. I think that’s a whole new regime for people living here as well as for people coming in.
Final Thoughts Moving Forward
Asa; Yeah for us, I think real estate has obviously not been moving as quickly as we’d like but the insurance side of things, it has taken off and i think insurance will be incorporated uh into travelers coming into Thailand for this foreseeable future.
Bill; I think maintenance will be the big issue, people who are buying existing properties who want to have a good look these properties might not be occupied for a while there’s going to be you know certainly uh energy costs as well you know anything which is environmentally friendly people who understand and buy villas here now understand the real cost of running this i think we’re seeing a lot more green projects we’re seeing solar come into projects, It’s a good thing to do it’s the right thing to do but it’s also a wise thing economically to do because these these builders can be expensive to maintain.
Asa; So okay let’s look at the future and okay there’s obviously a lot of existing property that needs to be sold and that’s for sale. However, for a new project, you touched on green energy and sustainable properties.
What do you think we’re going to be seeing for new developments?
Bill; We’ve seen land green come in certainly with environmental ethos as well we’ve seen tree venanda which is again an integrated wellness community which has a you know good infrastructure for green, environmentally friendly practices.
Certainly developers are acknowledging this is important now not just because it’s good because it makes money sense.
Asa; Do you think it’s just a gimmick to make more sales or do you think it’s going to be something?
Bill; I think it’s sustainable because at the end of the day, if you’re running a big belly, your single biggest cost is electricity and electricity, you know again, you’re able to sell back energy to the grid now in Phuket. You know working together you’re able to get licensing for that. it makes sense it might be a three to four year payback but a great payback long term.