PHUKET: Phuket’s luxury and upscale hotel market weakened across key performance measures in the first half of 2026, with occupancy and revenue per available room falling as guest numbers declined and room supply continued to expand.
The island recorded 6.04 million hotel guests during the six-month period, down 2.72% from a year earlier, according to the research and advisory division of Cushman & Wakefield Thailand.
Average occupancy fell to 80% from 84.1% in the first half of 2025, while the average daily rate, or ADR, declined 4% to 6,820 baht per night.
Revenue per available room, known as RevPAR, dropped 8.7% to 5,456 baht from 5,975 baht a year earlier.
Cushman & Wakefield attributed the slowdown mainly to a decline in international visitors, particularly from April onwards.
Unrest in the Middle East affected confidence in international travel, while higher airfares weakened demand from long-haul markets including Europe, the United States and other countries in the Americas.
The second quarter also coincided with Phuket’s low season, following the peak tourism period from late 2025 through the beginning of 2026. International arrivals consequently declined in line with seasonal patterns.
While demand weakened, Phuket’s luxury and upscale hotel inventory continued to grow.
One new upscale hotel with 280 rooms opened during the first half of the year, lifting combined supply in the two segments to 49,380 rooms. This represented an increase of 0.57% from the second half of 2025.
Central and western Phuket remained the island’s largest upper-end hotel zone, with Surin, Kamala, Patong and Karon accounting for 58.4% of the combined luxury and upscale room supply.
Northern Phuket held a 17.4% share, followed by southern Phuket with 15.1%.
Further expansion is expected, with approximately 3,440 rooms currently under construction and scheduled to open progressively between 2026 and 2028.
The pipeline would increase existing supply by about 7%. Most of the new properties are in the upscale segment and are concentrated in northern Phuket.
Upscale, or four-star, hotels account for approximately 52% of Phuket’s combined luxury and upscale room inventory, while luxury hotels represent 48%.
The upscale segment has expanded steadily since 2015 and has recorded notably more new openings than the luxury segment in recent years.
Luxury hotels remain highly concentrated around Mai Khao and Bang Tao beaches, as well as Kata Beach and Cape Panwa. These areas continue to serve as major locations for Phuket’s upper-end hotel market.
Despite the weaker first-half results, Cushman & Wakefield sees scope for Phuket’s hotel market to improve during the remainder of 2026.
The province welcomed approximately 14.1 million Thai and international visitors in 2025, while its target for 2026 is about 14 million visitors.
The market nevertheless remains exposed to weaker demand from the Middle East, Europe and the United States, limited flight capacity and volatile fuel prices.
These factors could affect travel decisions, occupancy levels and the direction of hotel room rates.
Cushman & Wakefield noted that Thailand’s tourism strategy was moving away from an emphasis on visitor numbers towards generating greater value from tourism spending.
The approach focuses on improving tourism products and services and creating higher-quality experiences to support sustainable long-term revenue growth.
Hotel operators also continue to face competition from unregistered accommodation offered through sharing-economy platforms.
Such properties remain a regulatory and competitive concern for hotels that are legally registered and comply with tax requirements. - The Nation/ANN
