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Phuket Service Charges Remain Steady

Phuket Service Charges Remain Steady

The average income from service charges at hotels in Phuket is anticipated to remain stable, maintaining a high level during the upcoming peak season, while the average room rate is expected to continue rising, according to the Phuket Hotels Association.

Bjorn Courage, the association’s president, stated that the hospitality workforce has fully returned following the pandemic, with employment levels back to normal at 95 hotels in Phuket that are members of the association.

Typically, hotel service charges represent 10% of paid room nights, which are evenly distributed among staff on a monthly basis.

With the post-pandemic hiring surge to meet strong tourism demand, individual staff members are receiving lower service charge amounts compared to last year’s high season, when some hotels saw record monthly service charges, remarked Mr. Courage.

He also mentioned that occupancy rates are expected to remain high, similar to the 70-80% rates recorded in 2023.

Room rates are projected to continue escalating, primarily due to strong demand, along with inflation and rising operational costs such as utilities and payroll.

However, Mr. Courage pointed out that service charge income in Phuket will still surpass that of slower-recovering destinations like Hua Hin and Chiang Mai, though it may be lower than the rates seen in hotels in Bangkok and Samui.

Bangkok benefits from a stronger mix of business travelers, while luxury properties in Samui contribute to higher service charge rates.

Caution remains the name of the game for hotels when it comes to hiring staff. Although the number of employees may be lower, there will be an emphasis on enhancing productivity.

Many hotels have also partnered with schools to facilitate student traineeships.

According to STR, Phuket hotels have secured 30% more business on the books (BOB) year-over-year for the next six months.

Mr. Courage highlighted that the country’s visa-free scheme has attracted foreign tourists, particularly from China and India, while the longer eligible stay has also benefited European and Russian visitors.

He noted that Phuket’s tourism market has become more diverse and is no longer solely dependent on Chinese and Russian nationals as it was before the pandemic.

In an exciting development, last week Saudia, Saudi Arabia’s national airline, announced the launch of direct flights from Riyadh and Jeddah to Phuket starting in December.

This week, the Phuket Hotels Association, C9 Hotelworks, Greenview, and partner organizations held the “Phuket Hotels for Islands Sustaining Tourism 2024” event, which unites hoteliers and stakeholders from across Asia to discuss sustainability.

They also plan to draft a white paper on sustainability and development to present to the government in the coming months.

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