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Step by Step: Phuket, is it time to think about a Plan B?

Step by Step: Phuket, is it time to think about a Plan B?

OPINION: Phuket has long been high on many tourists’ bucket lists with its beautiful beaches and vibrant tourist scene. However, the island faces a pressing need to move beyond tourism as its sole economic driver.

opiniontourismeconomics
By Simon Causton

Sunday 24 March 2024 10:00 AM


Patong Beach on Jan 1, 2024. Photo: Patong Surf Life Saving

Patong Beach on Jan 1, 2024. Photo: Patong Surf Life Saving

Bill Barnett of hospitality consultancy C9 Hotelworks reports that tourism currently contributes over 50% of the local economy’s revenue. Yet before the COVID-19 pandemic, in 2019 Phuket had more than 10.5 million visitors generating over US$13 billion in international tourism income, at that time rated as close to 90% of the local GDP.

Overtourism, evident in overflowing beaches and strained resources, threatens the beauty that attracts visitors. Furthermore, dependence on a single industry leaves Phuket vulnerable to external shocks like pandemics, global economic downturns, and a growing anti-foreigner sentiment on the island. Phuket needs a Plan B to ensure long-term economic stability and a thriving future.

LEARNING FROM SUCCESS

Phuket isn’t alone in this search for an alternative. Other destinations have successfully diversified their economies. 

Although Kuching in Malaysia is located in Sarawak on the island of Borneo, the city has transformed into a hub for high-tech industries, attracting renewable energy and biotechnology companies. This shift fostered innovation, high-value jobs, and reduced reliance on tourism fluctuations.

Austin, Texas, in the US was once known primarily for music. However, Austin reinvented itself as a major tech center, nicknamed ‘Silicon Hills’. This diversification brought economic stability, attracted a skilled workforce, and lessened dependence on tourism dollars.

This historic city of Valencia in Spain was once heavily reliant on tourism, but has now become a global leader in sustainable urban development. They’ve invested heavily in public transportation, green spaces and energy efficiency, attracting businesses and residents while maintaining their cultural heritage.

UNTAPPED POTENTIAL

The good news is Phuket possesses a wealth of potential for economic diversification. The Phuket Chamber of Commerce, along with local entrepreneurs, identified eight key areas in 2022 in the aftermath of COVID:

  • Gastronomy: Phuket’s rich culinary heritage, with its unique blend of Thai, Chinese and Malay influences, can position the island as a premier destination for culinary tourism. Imagine high-end cooking schools, Michelin-starred restaurants and international food festivals.
  • International Education: Leverage Phuket’s beautiful location and growing infrastructure to attract international students. Phuket is already home to several well-regarded international schools. Expanding this to include universities and language schools could offer programs in tourism, hospitality, marine science, and business administration.
  • Marinas: Phuket’s stunning coastline and ideal weather conditions make it a natural fit for more world-class marina developments. This would attract luxury yachts, boosting high-end tourism spending and creating jobs in maintenance, repair and yachting services.
  • Medical Services: Develop Phuket into a medical tourism hub by attracting world-class hospitals and specialists. This would cater to both international patients seeking affordable, high-quality care and retirees seeking wellness and preventative healthcare options.
  • Meetings and Conventions: Invest in convention centres and high-end resorts to attract international conferences, business meetings and incentive travel groups. This would generate significant revenue during the shoulder seasons. The plan for EXPO, though unsuccessful, pointed in the right direction and hopefully can be utilised.
  • Sports Tourism: Phuket’s natural beauty and diverse landscape can cater to a variety of sports enthusiasts. Develop existing and new facilities for golf, diving, cycling, Muay Thai, football and other activities, along with hosting international sporting events.
  • Smart City Development: Embrace technology to improve infrastructure, public services, and sustainability. This could include intelligent transportation systems, waste management solutions, and energy-efficient buildings making it a more attractive place for big business to locate.
  • Tuna Exports: Leverage Phuket’s strategic location in the Andaman Sea to develop a sustainable tuna fishing and processing industry. Phuket used to have a robust fleet, but unsustainable fishing practices led to its decline. Focusing on responsible fishing practices alongside legal changes could create jobs, generate export revenue, and promote environmental sustainability.

The UNDP’s "Phuket Sustainable Transformation Vision and Strategy" further expands on this concept with a 10-pillar approach, underscoring the importance of a comprehensive plan. These initiatives require minimal investment but might necessitate legal changes.

Beyond these pillars, additional possibilities include:

  • Biotechnology & Marine Research: Leverage Phuket’s rich marine ecosystem to establish research centres focused on marine biology, aquaculture and environmental sustainability. This would attract scientists and researchers, and create a hub for innovation.
  • Light Manufacturing & Assembly: Phuket’s strategic location and existing infrastructure can attract companies engaged in light manufacturing and assembly. This sector offers job opportunities with a lower environmental impact compared to heavy industries.

PRESERVING THE ESSENCE

Economic diversification shouldn’t come at the cost of Phuket’s unique charm. Here’s how it could keep a balance: 

  • Sustainable Agriculture: Encourage organic farming practices and locally sourced food production on the remaining undeveloped land. This promotes self-sufficiency as well, in the unfortunate case of another global pandemic this would be a wise approach.
  • Local Crafts & Entrepreneurship: Promote and empower local artisans and small businesses dealing with traditional products and services. This fosters cultural preservation and creates a unique appeal for visitors seeking authentic experiences. It also helps to make Phuket more unique and sets it apart as not just another Thai Island.

Phuket’s future lies in embracing a multi-pronged approach. By fostering knowledge-based industries, light manufacturing and a skilled workforce, the island can achieve long-term economic stability and a more sustainable future. Promoting local businesses, cultural preservation, and environmentally friendly practices ensures Phuket retains its unique charm while fostering a vibrant community.

By strategically diversifying its economic landscape, Phuket can evolve from a tourist destination into a thriving island, resilient in the face of future challenges. This path will not only ensure economic well-being but also enhance the quality of life for residents and preserve the island’s cultural heritage for generations to come. The pessimist in the writer scoffs at the thought of progress in Thailand after many years of living here, but as they say, ‘Hope springs eternal!’


Simon Causton is a long-time Phuket resident, founder of Citadel Phuket and author of ‘The Phuket Periodical’ newsletter. X (Twitter): @SimonCauston