FEATURE: Did We Shut the Door to Paradise?
Koh Phangan’s 2023 tourism season started strong but fell off fast. Will it recover — or are these empty beaches the new normal?
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I feel like I open a lot of my articles about Koh Phangan with “It’s a strange time to be living on Koh Phangan right now.” But that’s because… for the past five years, it has been.
In fact, since Fraser and I moved here back in 2011, we've seen a ridiculous amount of change.
See, while Covid brought Koh Phangan to its knees, it didn’t kill the island. Many businesses failed, yes, but a surprising number weathered the storm.
Something for which they were well rewarded last peak season (December ‘22 - February ‘23), when tourists flocked to our shores like never before. The province of Surat Thani — home to the trio of popular tourist islands Koh Samui, Koh Phangan, and Koh Tao — recorded the country’s highest growth in tourist arrivals and tourism revenue in 2022.
Even in what is traditionally low season (October - November), the island was full. And come December ‘22, it was nearly impossible to find somewhere to stay… even at inflated prices.
Many speculated that it was a post-Covid tourism surge. In other words, people who’d been all but locked in their homes for the past three years were suddenly allowed to not only leave their homes but travel again — and travel they did.
*This article’s title is inspired by my writing mentor Brian Gruber’s poem about Koh Phangan, Shut the Door to Paradise, Momma (read it, it’s awesome)
Villas rise, foundations shift
But most investors turned a blind eye to such speculation, looking at the building boom the island has experienced over the last year or so. While there are no official published figures to give us an idea of just how many building permits have been issued over the past year, I have a bit of an inside scoop. Our luxury villa development company has been officially operational since last year and we receive new inquiries from people looking to carve out their own slice of paradise every week. Sometimes, they come in daily.
You don’t have to own a development company, though, to notice the transformation of the island.
Huge swathes of the island are being clear-cut. A boardwalk is rumoured to be going in in Chaloklum, the once sleepy fishing village in the north of the island. Luxury hotels — previously too nervous to invest in Phangan due to its inaccessibility — are now thinking about testing the waters. Kupu Kupu, one of the island’s few five-star hotels, is said to be opening a second location near Chaloklum too. New shops, restaurants and bars are springing up all the time.
But more than any other kind of development on Phangan, luxury villas are being thrown up like gingerbread houses. Large villa complexes are taking over the island’s hill and cliffsides. Pretty much everyone you speak to on the island is building their villa… and usually a couple more to rent out for a nice passive income.
But, it seems that those who decreed the tourism boom an anomaly may have been right. The island, normally rammed in July and August with Europeans taking their summer holidays, is currently… pretty dead.
European not-so-high season
You can almost feel the worry in the air at half-empty bars and restaurants on the days surrounding the Full Moon Party — the one time of the month that local business owners could count on tourism profits.
This August, there are two full moons, which means two separate full moon parties in one month. After the insanity of last peak season, most locals assumed this meant that the island would be chock-a-block for the month… July too.
But it wasn’t to be. July felt like low season. And August, though we’re only just over a week in, isn’t much better by the looks of it. “Worst August in the last 10 years… (not considering 2 years Covid) talking as [a] business owner,” reported Stefano Pilla, who’s been running The Living Room Restaurant in Thong Nai Pan Yai since 2013.
Even the Full Moon Party didn’t make a huge difference to these numbers. Brian J. Dean, owner of two hostels on the island, says that his normally extremely popular hostel was at 50% capacity for the August 3rd Full Moon Party.
Pascale Weeratam, owner of Seaflower resort, says the slowdown started a few months ago. “The peak ended in May I would say, where we saw a drop and I didn’t think much of it because May and June are normal low seasons anyway.”
“But, normally from mid-July to end of August we would already have had full bookings from last year already (tons of families coming for summer holidays). But this year, our bookings were only about 80% and July was super slow compared to previous years.”
Did we scare them away?
Locals are taking to Facebook to air their worries about and theories for the tourism slowdown. Many are blaming the accommodation price surges seen at the start of the year.
See, house prices on Koh Phangan shot through the roof during the craziness of the last peak season, hitting record highs on par with many of Europe’s most expensive destinations. Diverse groups, including individuals from Russia, Ukraine, and Israel seeking different opportunities and lifestyles, were attracted to the island. Some newcomers proposed rents substantially higher than what current tenants were paying. After scraping through three years of Covid, where the island was practically deserted and the tourism industry all but shut down, these landlords understandably took the money.
Which meant that a number of long-time residents on the island were kicked out of their homes with almost no notice. We, too, had our rent raised significantly.
Many locals point to this as the main reason for the tourism slowdown. According to one: “I think a lot of people were just so put off by the crazy prices that were driven by high season for places to rent. And honestly a lot of the prices were the same as in Europe, so actually, why would you come from Europe to pay European prices while it is the best time to be in Europe?”
Island problems
Others blame the island’s underwhelming infrastructure and the widely reported water shortage. Despite the spike in development, little is being done to improve the island’s roads. The traffic light at the Thong Sala junction that was working when we first moved to the island 11 years ago and broke a few years later remained broken for years until it was eventually just removed, just as an example. Which causes chaos since most drivers on the island — be they locals or tourists — don’t bother to follow the rules of the road at the best of times. No less when there is a missing traffic light at a busy T-junction.
And with little rain over hot season (April/May) and the June and July months when we normally have a mini-monsoon season, most houses on the island have been limited to 5 hours of water a day for months. A new water reserve is reportedly being built, but as demand for water skyrockets with so many new buildings and pools, it could be too little too late.
Some point to the overdevelopment phenomenon as being the cause. Mai Jaravee, business owner on the island for over 20 years, says the coming years for the island’s business owners will not be for the faint of heart. “Next year will be super hard for many accommodations as we are facing an oversupply situation very soon. There are many villas and houses for rent being built this year.”
Others rebuke the argument altogether, saying that the island is as busy as ever. Just with a different kind of tourist than we’re used to — families. European high season has always attracted families who typically come here for their summer vacation for one to two weeks during the July-August months. It’s just that this season, they seem to be the only category of tourists to return.
Jamie Sarsam — owner of the popular Wake Up Wakeboarding as well as a hole-in-the-wall bar in Chaloklum called the Warren — has a unique perspective. “Wakeboarding is busy with families wanting to do activities,” he says, then countering: “The bar hasn’t picked up much as they don’t drink like the winter high season tourists.”
Pascale at Seaflower agrees. “Since August 1st, we’ve seen it ‘normal again’. Full with families.”
Expensive flights and cost of living most likely factors
But realistically, it’s far more likely that other factors — like surging flight prices and skyrocketing costs of living — are behind the slowdown in tourism we’re seeing now.
The simple fact is: it’s bloody expensive to get here from most Western destinations right now. Airfares to Asia were 33% higher in February 2023 than they were in February 2019 — right before Covid shut the world down.
Not to mention the fact that inflation is out of control in the west. And when times are tough, the travel budget is usually the first to get slashed. For this reason, most Europeans decided to holiday locally in 2023. The European Travel Commission reported recently that Europeans are still prioritising travel over other discretionary expenses, but are spending their travel money on what it refers to as “value for money” destinations like Serbia, Bulgaria, Montenegro and Turkey. This makes sense, since you can get a return flight from London to Turkey for under $400, while a return flight to Thailand for the same time period is nearly triple that.
The Chinese aren’t really travelling abroad either. And while this doesn’t seem like it should directly affect Koh Phangan since we don’t traditionally get a lot of Chinese tourists here (they tend to prefer Samui), it has. Because there's little demand for international airtravel in China, airlines have chosen not to reopen many flights that they closed during Covid. Traditionally, Chinese airlines tended to be an affordable way to get to Southeast Asia, going through Beijing, Shanghai or Hong Kong. Fewer of these flights means less competition — resulting in fewer options for flights and higher prices.
It makes sense that high flight prices would affect a more family-orientated high season, as Pascale from Seaflower points out: “Families can’t afford to bring their 2-3 children to Thailand, and they’re sticking to around Europe.”
Or is it a branding problem?
Another camp says the island is still settling into its new niche. Koh Phangan has traditionally been a backpacker island, and has been shifting to a more family-oriented luxury market for a good few years now. And this phenomenon was massively accelerated by Covid.
Longtime local and owner of Nibbana and Kalalushi resorts Damian Cawood on the island thinks so, anyways. “Unfortunately global recession is looming and the development and direction changes of the island means the old faithful aren’t going to be coming. The new faithful need to build up and gather. Maybe when the development stops and the island is rebranded, we will find our niche again. Hold tight, bumpy few years ahead.”
A promising outlook
Luckily, the coming peak season of December ‘23 to February ‘24 looks promising. Seaflower is almost fully booked for the time — and through to the end of April ‘24, to boot. And other mid-range to luxury resorts report a similar situation.
Airbnb hosts I spoke to had more mixed opinions. One said her self-contained apartment was fully booked from the 1st of November 2023 all the way through to May 2024. Another said he was fully booked or almost for the peak season period. Yet another host newer to the scene said he had only one booking for December, and nothing so far for next year.
Hostel owner Brian J. Dean laughed at the idea of having bookings for December in August, but then, the backpacker market doesn’t tend to book so far in advance.
Finding Our Island's New Rhythm
Koh Phangan, like countless other destinations, finds itself in the throes of a significant transition. The past decade, rife with socio-political, environmental, and now pandemic-induced changes, has reshaped how the island functions and is perceived by global tourists. The surge in luxury developments and the repackaging of the island's identity seem to be direct results of seeking more stable revenue in the aftermath of unprecedented global lockdowns. Yet, this pivot towards opulence may have left behind some of the island's authentic charm that drew tourists in the first place.
While the immediate future points towards a resurgence in tourism, especially with the mid-range to luxury segment, it's crucial to reflect on whether this strategy will ensure the island's sustained popularity and economic growth in the long term. The balance between maintaining Koh Phangan’s core identity and evolving to cater to a changing demographic will be key.
Many external factors, such as global recessionary pressures, inflated airfares, and international travel dynamics, further complicate this scenario. However, it's an opportunity for stakeholders on the island — from policymakers and developers to business owners and local communities — to come together. They can create a holistic strategy that ensures economic growth while preserving the island’s natural beauty and cultural essence.
Koh Phangan's journey epitomizes the resilience and adaptability of global tourist destinations in this revitalized era. As the island forges its "new normal," the strategies it adopts and the innovations it embraces can illuminate the way for other destinations striving for rejuvenation in a post-pandemic world. With its rich tapestry of culture and nature, Koh Phangan stands poised not just to evolve, but to flourish, setting an optimistic example for other locales charting their own courses through change.
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