Phuket Hotels Expand as Demand Weakens

Phuket's hotel developers are pressing ahead with thousands of new rooms despite softer visitor demand, raising questions about the balance between accommodation growth and the Thai island's tourism recovery.

According to industry figures cited by Skift, Phuket has 30 hotel developments involving 5,517 rooms in its pipeline, with approximately 40% scheduled to open in 2027. A separate industry survey counted 44 projects on the island at the end of June, reflecting different coverage and development stages. New luxury properties are competing for visitors at a time when many established hotels are already lowering prices to sustain bookings.

Research from Cushman & Wakefield Thailand found that Phuket welcomed 6.04 million hotel guests in the first half of 2026, down 2.7% year on year. Occupancy at luxury and upscale hotels fell to 80% from 84.1%, while average daily room rates slipped 4% to 6,820 baht. Revenue per available room dropped 8.7%, suggesting that hotels were earning less from their existing capacity.

The wider outlook remains uncertain. Thailand has reduced its forecast for international arrivals this year to 33 million from 36.7 million, although airlines continue adding connections to attract travellers from new markets. New hotels may strengthen Phuket's appeal and introduce more choice, but additional supply could prolong pressure on room rates if demand recovers slowly. For operators and investors, the issue is no longer simply how many hotels the island can build, but whether visitors can fill them profitably.