PHUKET — Local small businesses in Phuket are experiencing declining revenues despite the island welcoming record visitor numbers in 2025, highlighting a disconnect between tourism growth and SME performance.
Phuket attracted 7.6 million visitors from January to July 2025, maintaining robust growth momentum from 2024’s record 13 million arrivals. The Tourism Authority of Thailand (TAT) Phuket office reported hotel occupancy averaging 76.61% and cumulative revenue reaching 290 billion baht during the seven-month period.
International visitors dominated arrivals, with Russia, China, and India comprising the top three source markets. The destination handled over 60,000 flights—a 5.77% increase year-over-year—and welcomed nearly 600 ships, including 55 cruise vessels carrying 154,217 passengers. Daily arrivals during the current Green Season average 12,000-15,000 tourists from 30 countries.
In 2024, foreign visitors generated 92% of Phuket’s 497 billion baht (15.6 billion) tourism revenue, while domestic tourists contributed 7%, despite representing 24% of total arrivals.
SMEs Face Revenue Decline
The tourism surge has not translated into increased spending at local businesses, according to industry leaders. Charan Sangsarn, secretary-general of the Phuket Chamber of Commerce, told Prachachat that SME revenues have declined due to weak consumer spending patterns.
“Business is quieter than during COVID-19, with the impact particularly severe for SMEs,” Charan said. “Tourists aren’t buying from local businesses, and residents lack disposable income. Visitors prefer department stores offering promotions and discounts that small shops cannot match.”
Changing Tourist Behavior
Local retailers report significant shifts in visitor shopping patterns. Ammy, who operates a store in Phuket’s old town, described current conditions: “People just browse without purchasing. Most visitors are Indian, Chinese, and Arab tourists, with few Europeans. Tour groups include old town walks in packages but don’t allocate time for shopping like before.”
Kalaya Thongsomboon, head of retail operations at Khun Mae Ju Co Ltd, a major souvenir and local food brand, confirmed the trend. While previous government programs like “We Travel Together” significantly boosted sales, overall revenues have declined.
The company has adapted by establishing learning centers for students and government visitors, plus expanding online sales, though e-commerce represents less than 10% of annual revenue.
Calls for Economic Stimulus
Business owners are urging government intervention to stimulate consumer spending. Arpa Warapiwatkul, managing director of Methee Phuket Co Ltd, reported only brief improvements in April before business slowed again. Her cashew nut operation has similarly pivoted to educational tourism.’=
Industry leaders specifically advocate reviving the “Khon La Khrueng” (Half-Half) co-payment program, arguing it would be more effective than direct cash transfers in encouraging actual spending.
“The government urgently needs stimulus measures,” Charan emphasized. “A targeted co-payment program would be more effective than a 10,000 baht cash gift that people might save rather than spend.”
The situation reflects broader challenges facing tourism-dependent economies where visitor volume growth doesn’t necessarily correlate with local business revenue, particularly when tourist spending patterns favor large retailers over community-based SMEs.
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