Re-inventing Patong  
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Market Watch - Page 9:

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Re-inventing Patong.

Everyone has an opinion on Patong. Either they love it or hate it, but there is never a lack of sentiment when the subject comes up. No matter what you think of the place, no one can deny Patong's significance to the tourism economy and its role as the meeting point for island visitors. Strategically, it remains a hub where north, south, east and west collide.

After the tsunami, the area started making noises about rejuvenation and was marked by overseas investment into projects, such as the impressive renovation of the Holiday Inn and the financial rehabilitation of Jung Ceylon .

Local firms were active - Burasari acquired the Comfort Inn and expanded its well-regarded brand. However, other projects did not move ahead, such as the Sofitel, located on one of the area's prime pieces of real estate at the north end of the bay.

In 2007, the pace of internationally branded hotels opening has been accelerating. There will be more than 1,500 chain-operated rooms coming on line in the next year, including the Millennium at Jung Ceylon (436 rooms), Mercure (249 rooms) and Ibis (250 rooms)

Perhaps the most watched new project is the Park Hyatt Phuket at Emerald Bay to the south of Patong. This stunning piece of property was controlled for years by Taiwan 's Evergreen Group and was sold To Thai and Hong Kong interests. The question on everyone's lips has been, “Is Patong ready for a high end luxury resort ?” This will be a key indicator if the market can evolve to serve the upper echelon segment.

Transactions remain a barometer of a healthy property, and there have been two of note lately. First is Destination Properties' acquisition of the Grand Tropicana (400 rooms)

While more recently acquired, the Surin Beach Resort and Kamala Bay Garden Resort are currently under renovation and will be internationally managed. Also of note the sale of the boutique Baan Yin Dee project to a company controlled by a Singapore-listed firm, which recently bought Bintan Lagoon Resorts.

Support facilities, such dining and shopping attractions, are a key component of the development of any market. Jungcevlon is well- laced to capture traffic from most hotels on the island. One key multi outlet under development within the project is Singapore 's Indochine groups tiered

 

 

 

entertainment venue bringing a variety of eating, drinking, and lifestyle offerings.

At the Sky Inn, the 9th Floor restaurant with its impressive refurbishment attracts tourists and locals alike, and the regional Coyote bar and restaurant at the front of Ban Thai is adding to the List of chains with outlets in Bangkok that now see Phuket as "must have" location.

The rate of property development in Patong has lapsed during the past five years, meaning there is a good amount of catch-up required. After years being dominated by lower-end products, Patong now has a few notable projects raising the bar, such as BYD Lob and L,'On:hidee's ocean-view villas.

Many industry watchers are waiting to see if, and at what level, a mixed-use residential or villa component will be offered at the Park Hyatt project

Ultimately, given the limited amount of developable land, it appears that Patong's future depends on either bringing dowon older structures, developing more dense projects or renovating existing products.From a long-term perspective, and given the number of high-rise buildings already in the ' area, perhaps one option might be to zone certain areas of Patong to allow for new high-rise developments, taking a similar road of development of the more sophisticated destinations, such as' Waikiki.

Once there is no more undeveloped land, either redevelopment needs to be done or else there will be a geographical shift. to areas such as Mai Khao.With Patong virtually bursting at the seams, Kalim looks poised to be a major area of activity over the next few years. Bart Duykers of Villa Santi recently said that both the boutique resort and its signature outlet, Gaya , with enviable sunset views of the bay, will.open by this corning high season.

The multi-million-dollar Dijinnah Santi project is under construction and sales are moving, showing there is a market in that location for a 60- to 100-million- baht property. To be sited on the hills opposite is the Miora Resort, planned to be an all-suite, internationally managed hotel, as well as an upmarket dining/bar complex next to Baan Chai Lei.

Patong will remain a source of conversation for a long time, be it good or bad. From a tourism and property perspective, the current trend towards upgrading and branding of products, new developments and the scale of international investment is positive. ownstream, zoning and regulating growth are going to be paramount to reinventing the destination.

 

   

Bill Bamett is Managing Director of C9 Hotelworks a Phuket hotel and residential consulting firm With more 20 years experience in the region, he has played an active role in some of the island biggest develovments.

 

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