The economy of Phuket is entering a period of recession. Despite a 4% rise in visitor numbers this year, revenue from tourism is falling, according to research conducted by Prince of Songkla University's Faculty of Hospitality and Tourism.
"Phuket's economy is undergoing a transformation. Annual economic growth in the province has been at 6% for the last two decades, but recently we observed a hiccup," Chayanon Phucharoen, associate dean of research and graduate study at the faculty, told a press briefing on Friday.
Mr Chayanon cited a Bank of Thailand survey showing the number of tourism operators in Phuket province had surprisingly fallen, despite rising tourist arrivals.
He blamed the stronger baht for putting a brake on tourism spending, adding that digital disruption had funnelled tourist services and income towards online platforms controlled by outsiders.
Other conditions undermining the tourism sector included degraded beaches and poor road traffic safety, Mr Chayanon said.
There was an urgent need for Phuket to create new tourism experiences instead of relying exclusively on its reputation for sea, sand and sun.
"The sector can be improved in many ways, such as by offering tourists new experiences like cultural activities," he said.
It's not only Phuket that is feeling the pinch of a stronger baht.
Major tourist destinations such as Pattaya in Chon Buri province are also feeling the impact.
Damrongkiat Pinitkarn, secretary of Entertainment and Tourism Industry Association of Pattaya, said bars have recorded a 40% drop in custom from tourist so far this high season.
And though the Chinese still account for the highest number of visitors, many are now opting to explore Vietnam where the local currency is weaker.
Meanwhile the "baht factor" is affecting tourists' behaviour, according to Mr Damrongkiat.
"In the evening, more tourists are staying within the confines of their hotels instead of venturing out to party at clubs or discos."
Providing more positive news for Pattaya's economy recently is the huge influx of Indian visitors, who are attracted by the lively night life. "However, their numbers may not grow any larger, so bar owners need to deal with this tough situation," he said.
