In 2021, Phuket saw a minimal influx of foreign tourists, with no new condominium projects launched and only two new villa projects introduced. However, CBRE, a leading global real estate consulting firm, reported a slight increase in demand for vacation homes, and hotel performance began to recover due to the easing of travel restrictions and regulatory adjustments.

Ms. Pakayaphet Meeshuasar, Head of the Phuket Real Estate Sales Department at CBRE Thailand, commented, "The Phuket Sandbox model launched in July 2021 may not have performed as expected, but in the latter half of 2021, the number of foreign tourists arriving at Phuket Airport increased to 219,144. Although this figure is still low compared to the 4.4 million tourists in the latter half of 2019, the real estate market in Phuket is starting to recover, driven by long-term foreign residents and the demand for luxury villas from both Thai and foreign buyers in Bangkok."

"Since early 2022, CBRE has closed several villa sales to domestic buyers looking for luxury vacation homes in Phuket. CBRE believes that the luxury villa market in Phuket will continue to thrive as buyers seek spaces for remote work and areas that provide privacy away from the hustle and bustle. The growing accumulated demand comes from Thai and foreign clients looking for opportunities to purchase real estate in Phuket at special prices, both in the form of condominiums and single-family homes, which are being offered at lower prices due to previous owners being unable to return to the island because of COVID-19 or some may wish to offload their properties."

Additionally, the number of Chinese and Russian investors in the Phuket condominium market has decreased due to travel restrictions and ongoing international conflicts. If these buyer groups return, CBRE believes that the market for these customers will expand to include both investment and personal residence purchases. Meanwhile, the Chinese customer market will pose challenges for developers due to restrictions on the transfer of funds out of the country. Developing joint ventures with Chinese companies may provide advantages in terms of project confidence from Chinese clients.

CBRE notes that there are two potential buyer groups from China for Phuket: the first group consists of investors seeking guaranteed returns and rental management, while the second group includes end-users looking for luxury villas as vacation homes with rental opportunities.

According to CBRE's research department, in the latter half of 2021, the Phuket apartment and condominium market recorded sales of 115 units, a 113% increase compared to the 54 units sold in the latter half of 2020, and a 74.2% increase compared to the 66 units sold in the first half of 2021. There have been no new condominium launches for two consecutive years since the latter half of 2019, while 209 new units were completed from just one project, and over 4,700 units are under construction and expected to be completed by 2023, with most projects located along the central and southwestern coasts.

For the Phuket villa market, CBRE's research department found that a total of 81 villas were sold in the latter half of 2021, representing a 32.8% increase compared to the first half of 2021 and a 125% increase compared to the latter half of 2020. Additionally, sales have increased every quarter, with 36 villas sold in Q3 2021 and 45 villas sold in Q4 2021, driven by high demand from domestic buyers seeking vacation homes and second residences. Therefore, the trend for the Phuket villa market in 2022 appears more positive than in previous years, but whether this recovery will be sustainable remains uncertain.

In terms of the hotel market in Phuket, considering the number of hotel rooms, CBRE's research department reported that in the latter half of 2021, there was an increase of 1,180 hotel rooms from the opening of 9 new hotels, bringing the total number of hotel rooms on the island to nearly 43,000. The increase in foreign tourists traveling to Thailand resulted in a 16.8% increase in occupancy rates in the latter half of 2021, up from 8.5% compared to the same period the previous year, according to STR. By 2024, the number of hotel rooms in Phuket is expected to increase by 7.3% from 15 hotels currently under construction, totaling 3,120 rooms.

Mr. Atthakavi Chusaeng, Head of the Hotel Business Department at CBRE Thailand, added, "The hotel market in Phuket is improving, driven by higher vaccination rates, increased travel confidence, and government policies promoting domestic travel, along with adjustments to entry policies, resulting in an increase in foreign tourists compared to 2020. In Q1 of this year, hotel occupancy rates in Phuket have significantly increased, with occupancy rates during COVID-19 rising to 60% - 90% for the hotels surveyed by CBRE in February. However, the average revenue per available room (RevPAR) remains low as hotel owners continue to offer special packages to attract tourists back."

"Since China remains closed, the majority of tourists are Europeans, Americans, and Russians stranded due to ongoing international conflicts. Additionally, the latest wave of COVID-19 in China may make it difficult for Chinese tourists to travel out of China and into Thailand," Mr. Atthakavi concluded.