Phuket Opinion: Learn from other’s mistakes

Phuket Opinion: Learn from other’s mistakes

Phuket Opinion: Learn from others mistakesIt was 35 years ago that I first visited a small seaside city on the Costa Blanca in south-eastern Spain called Torrevieja. At that time it was pretty much unknown to European travellers but it was and still is a popular destination for Spanish city dwellers, who were attracted to the area by the supply of economically-priced houses and apartments. As the tourists coming to Torrevieja owned properties, it was never a hotel or resort destination and even today there are only 3 or 4 hotels to be found, each of which are located within the centre of town.

To arrive in Torreviaja it’s about a 45KM journey from Alicante Airport, and 35 years ago it was a pleasant traffic free journey along a beautiful scenic route, with either side of the road boasting pure natural beauty.

Outside of the town, which had always been heavily developed, the smaller towns were very rural, and the few houses in them belonged to those who worked or had businesses in main Torrevieja Town.

By the early/mid 1990s, a small number of European travellers had started to hear about Torrevieja and started to rent the Spanish homeowners properties. However, by the end of the 90s Torrevieja had become one of the world’s most popular budget tourist destinations, and this resulted in Torrevieja starting to see a runaway property boom and selling property to budget tourists became the most profitable game in town.

Phuket Opinion: Learn from others mistakes
Does this look familiar?

The development of Torrevieja’s tourist industry quickly led to extensive areas of land being devoted entirely to mass tourism, and also an increase in demand for lodging, and this has led to once rural areas being developed into enormous “towns” with thousands of houses and flats massed together within a relatively small area. The always unnecessary hotels started to see business as large scale tour operators, who control international demand for the areas properties, began to use them for lodging visitors interested in purchasing property in a “package-deal” system. The once scenic journey from the airport also started to see development as the large and densely populated town centre, began to move inland. Torrevieja, which once had a stable population of about 9,200 inhabitants had jumped to more than 70,000 in 2001. Furthermore, the sheer intensity of urban development (over 90.000 dwellings, 75.000 of which were used exclusively as summer homes), and the related repercussions on employment and on increased demand for goods and services, made it a phenomenon that would constantly demand attention.

Unfortunately, by 2005 Torrevieja started to see a decline in its tourism industry, Europeans didn’t accepted the change that was made to a once beautiful area and started to find alternative budget tourist destinations to visit. This also saw the start of the once needed holiday homes being resold to those not so familiar with the area. However, it did not see an end to the areas urban development and the now unnecessary urban planning continued.

By 2008, Torrevieja’s tourism and property boom started to deteriorate rapidly, unemployment surged from 1,700 in 2005 to more than 5,000. Many of the newly built homes and re-sale homes couldn’t be sold, new developments were left unfinished as the developers started to go bust, and holiday trade was down by about 60 to 70%.

Phuket Opinion: Learn from others mistakes
Could this be Phuket in the future?

Today, what was once a pretty traditional Spanish town on the Costa Blanca, thanks to mindless urban planning has become one of the least attractive towns on the Spanish coast. Estate agents aren’t selling anything, retail sales are falling by 20 to 25%, local business are struggling as they wait for the arrival of the next busy tourism season, social problems such as crime are growing, and there is litter and graffiti everywhere.

I didn’t visit Phuket 35 years ago but I did in 2000. Unfortunately, I have seen familiar changes here to those in Torrevieja. Although Phuket still has a thriving tourism industry, for a long time so did Torrevieja, but tourist destinations can change like the wind with new travel options becoming available year on year, what’s to say what happened in Spain won’t happen here? We have already seen a big swing in the tourist market and this new market is very different to that what Phuket enjoyed before.

If Phuket does see a drop in tourism this will result in an increase in unemployment. As a large number of employees in Phuket come from various parts of Thailand, and a large number of those are likely to return to their home provinces, although this will not really see changes in numbers of unemployed registered in Phuket, it will certainly  lead to more properties becoming unoccupied.

Phuket Opinion: Learn from others mistakesPhuket is still seeing mass growth in real estate developments, but are they really necessary? There are numerous amounts of new and old shophouses lying empty and unkempt, but they are still building more, if people aren’t buying or renting units surely there is no requirement for them? There is also some unfinished developments, is this due to the units being unsold and unreliable developers running out of money? Were they being built on land that was not suitable for building? So who takes responsibility and says when the building work stops?

If Phuket wants to know how not to develop a local economy, and how not to plan a town, they need look no further than Torrevieja.


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