Betting on Phuket’s future for better, just OK or fantastic but not worse

Sometimes it can be nauseating to read the multiple forms of hyperbole regarding Phuket when the context is direct or indirect advertising thinly veiled in sugar coating. We are bombarded with drone shots of pristine beaches (they were during COVID but people were also destitute and not wearing a mask could get you thrown in jail or deported – still remember?). Then there are filtered close-ups of excellently presented cuisine which, on closer inspection, may or may not be delicious and descriptions of real estate that, if taken literally, might make one believe we were occupying paradise and can quickly get to the airport in 30 mins from almost any residential project.

This is, we know, far from reality, but thankfully the reality of Phuket without hyperbole is still excellent.

The discerning eye can clearly see the growing pains of an adolescent island which can sometimes feel packed to the brim with adults driving like teenagers, high on illegal recreational intoxicants that smell like the ‘Swamp Thing’. There are adults showing off to the point that they appear they are a walking Instagram Reel and a series of events and interactions between citizens, residents, visitors and state agencies that adeptly feed clickbait headlines on a seemingly continuous basis: “Man assaults wife with axe”, “Woman killed by pick up truck”, “Man arrested for bad reviews of Phuket restaurant”, “Police arrest suspect for acid attack” and so on.

That same discerning eye can also step back and measure Phuket by its past, present and likely future by reference to its substantive consistent positive trajectory. Phuket, and those people in it at any given time, have overall outperformed many other destinations and the proof is in the pudding of anecdotal exchanges and statistical data.

Ask most people socially why there are here in Phuket, or still here in Phuket – whether Thai or non-Thai – and there is a common thread in the answers. Phuket simply has the most variety of good living experiences to offer despite the ridiculous and often unnecessary things that people do to try to spoil that. Many foreigners who respond are able to compare Phuket to their home countries and often reference home politics, depressed economies, broken societies, crime rates, immigration (not appreciating the irony given their presence in Phuket), bad weather and lack of accessibility to leisure and recreation.

These days, Phuket has more to offer per square kilometre than many places on our planet with – sporting tastes catered for across the spectrum of racket sports (Padel and Pickleball courts springing up everywhere whilst we are treated to new tennis courts too), hiking, cycling, ultra-trails, marathons and fun runs, swimming galas, specialist wellbeing centres, all forms of yoga imaginable (to me), football, rugby and yes even… cricket.

Google helps identify the hot spots for coffees, cakes and ice creams and Instagram helps persuade venue owners to raise their snap-ability game. We have world-class waterparks, an ever-increasing selection of international schools beyond the previous ‘choose-the-most-expensive to keep up with the Joneses’ option, great medical care and – as a shopper – I am now more than satisfied by the sizes and variety of options in the malls here, although I admit I will design my fancy trainers online instead of paying a 300% mark up for them. This description is notably ‘neo-liberal’ in its framing of Phuket, an unavoidable assessment methodology given it is harder to score Phuket on social, environmental and governance without being incarcerated for truthfulness. We should never forget though that there are many in Phuket who are devoted to the less well-perceived, less ‘attractive’ parts of society to those that are seemingly wallowing in cash – the impoverished, disease sufferers, financially destitute and rehabilitating drug users or criminals. Their fate is not often discussed at champagne and oysters indulgent buffet lunches or at masquerade parties.

But that isn’t all. Aside from some of the these shallow or short term additions to Phuket, we also have some longer term developments that are encouraging many investors to keep their eyes sharpened for opportunities. Looking back, I can’t remember a time when there has been a general ‘sharp decrease’ in land values in Phuket (or Phang Nga) for that matter. Therefore, asset values will, as a general rule with obvious exceptions, hold or increase in value over time. Therefore, what is built on top of it needs to be maintained and the surrounding area must be nurtured to cultivate value.

Even with the ups and tsunami-pandemic downs of tourism, the imaginary ‘bell-curve’ of tourists visiting Phuket is overall getting better just as the fitness score on my watch fitness app will steadily improve despite rest and recovery days or trips to conferences which inevitably means less exercise. Therefore, hotels, if built well with the correct market orientation on sales and pricing, remain a good long term prospect provided there isn’t a constant raiding of the bank account to buy luxury cars and fund excessive lifestyles at the expense of refurbishment and renovation.

On the leisure side of Phuket, yachts, marinas and all the services that surround that continue to flourish. Fortunate to have my office located in the Boat Lagoon, I am  acutely aware of the net positive impact on my lifestyle and that of my team, whenever there is an owner’s investment in infrastructure, or an interesting event or night market pops up, or new restaurants open their doors. More disturbingly, in terms of impact on society and its youth, marijuana and cannabis products (excluding truly medicial use) take their grip in schools, permeate shop fronts and pervade the atmosphere of beach clubs and refurbished beautiful alleys and walkways found in the centre of Phuket. There appears to be no logical plan or rational implementation of relevant law, instead a hodge podge of messy regulations, uninterpretable guidance and a lot of inconsistent enforcement. If you were involved in this business, there is no apparent ‘safe bet’ on what will happen next; lack of certainty can be the death knell of investment.

Yet Phuket remains a strong independent spirit, so strong that there are rumours aplenty of its potential desgination as a ‘Special Administrative Zone’ i.e. decentralised budget control and decision making on certain policy implementation versus the current situation of receiving approvals on almost everything “from Bangkok”. Furthermore, Phuket has been pencilled as one of the strongest candidates to house any future venues of legalised gambling, should laws change in that regard. Whether it should be legalised is another question, but if it is, Phuket stands to be a winner and loser depending on how carefully its implementation is planned.

Phuket’s trajectory is clearly upwards. It is developing – and in some places already developed. It draws in Bangkok hi-society ‘types’ (not, I hasten to add, registered in my world as somehow higher in ‘status’ than any other individual on the planet), foreign individuals, foreign corporates, joint ventures, relocating families, goods citizens and a spattering of international villains and criminals just to keep things interesting. Whilst its development doesn’t suit all tastes, it is an incontrovertible fact that its development is ‘raising’ values overall; it is becoming ‘more expensive’, which means for asset and yield recipients better pay-outs. As a business owner having operated in Phuket for 21 years, I have seen various patterns and through those I can see one consistent theme – ‘growth’. Phuket is therefore a place I am betting on for the foreseeable future, for the education of my children, for the continued employment of myself and my team, for the healthcare needs of my family and yep, even to have fun.

If you are going to place a bet on Phuket’s future, do it with your eyes open and make sure you obtain as much information as you can first.

By Desmond Hughes, Senior Partner of Hughes Krupica
Hughes Krupica is a law firm which specialises in Real Estate; Construction; Hospitality; Corporate; Commercial; Tech; Dispute Resolution; and Litigation, operating from Phuket, servicing clients in relation to their business activities in Thailand and in other regions of Asia.