PERFORMANCE in Phuket’s hotel market declined across the board last year as a direct result of the May coup d’etat and an overreliance on mass tourism, new research reveals.

The Phuket 2014 Hotel Market Update report from C9 Hotelworks, released this month, shows year-on-year hotel performance in Thailand’s second largest destination after Bangkok dropped in all sectors.

Occupancy contracted by six percentage points, spurring a nine per cent contraction in RevPAR, while average room rates fell by just one per cent.

Nevertheless, the fact that the destination was able to recycle demand during the last four months of the year was hailed as a “silent victory” by Bill Barnett, the report’s author and managing director of C9 Hotelworks.

He told TTG Asia e-Daily: “Phuket, much like Bali, punched the ticket and took the ride on mass tourism…it’s impractical to believe that the trend of sustained growth could continue unabated.”

Meanwhile, the Tourism Council of Thailand projected last year that Thailand could see annual arrivals surge to 40 million, up from about 25 million, within 2018. Such growth would necessitate dependence on volatile mass markets, something which played a factor in Phuket’s poor performance last year when the Russian market collapsed, warned Barnett.

Last year, growth from Phuket’s top two source markets of China and Russia fell from respective four-year averages of 53 per cent and 39 per cent to a yearly rise of just six per cent and four per cent.

Barnett said that geopolitical issues are creating region-wide volatility and that “the toxic triple threat of currency depreciation, travel warnings and the diminishment of resource driven economies has to take a toll on travel”.

“You cannot bury your head in the sand and say, ‘China will save us’, given that every other challenged tourism market in Asia is doing the same thing. Let’s not forget China is vulnerable to broader issues.”

Arrivals from Taiwan plummeted 56 per cent last year, as did the Norway, South Korea and India markets. But Phuket saw growth from lucrative source markets such as Hong Kong (20 per cent), the UK (17 per cent), Japan (nine per cent) and Singapore (five per cent).

Thai VietJet Air will launch its first ever scheduled flights in March 2015, it has been confirmed. The new low-cost venture  will commence flights between Bangkok and Phuket on March 29th.

The carrier, which is based at Bangkok’s Suvarnabhumi Airport, started operating charter services in late 2014 but has been waiting to launch its regular scheduled flights.

And the airline said it will finally be able to commence domestic flights in March, ahead of Thailand’s busy Songkran Festival period, following the delivery of a new Airbus A320 aircraft.

Thai VietJet will operate domestic flights from Suvarnabhumi to Phuket, Udon Thani and Krabi, as well as international flights to Hanoi or Ho Chi Minh City.

The airline has endured a difficult birth; it was originally a joint venture between VietJet and Thailand’s Kan Air, but the Thai partner’s founder, Somphong Sooksanguan, recently confirmed that he has now sold 41% of his 51% stake in the venture to an unnamed investor.

Speaking to the Bangkok Post, Somphong cited differences between his and VietJet’s business management styles as the main reason for the split.

The original Vietnamese unit, VietJet Air, has also expanded its fleet in time for the country’s Lunar New Year holidays with the arrival of its 21st aircraft.

The new A320 touched down at HCMC’s Tan Son Nhat International Airport on 12 February 2015, marking the third out of a huge order for 100 A320s placed by the airline in 2013.  Like all VietJet’s fleet, the new A320 comes fitted with 180 seats in an all-economy class layout.

VietJet now operates approximately 150 flights per day on 28 domestic and international routes across the region, including services to Singapore, Thailand, South Korea, Taiwan and Cambodia. It is also planning to expand its international network across the Asia Pacific region, from both Vietnam and Thailand.