What can Phuket Learn from Dubai?

Over the past few days following a Cabinet Meeting of the Thai Government in both Phuket and Ko Samui (Two of Thailands premier tourist destinations) the lack of Tourist Visitors has had an immense economic impact on the very survival of these resorts.

Quoting from the Thaiger Web Site in Thailand and Hotel Expert Bill Barnett (C9Hotelworks) quotes the number of available hotel rooms in Phuket being around 90,000 from an estimated 1700 Hotels. Everyone is blaming each other but this isnt the first time 'Tourism' has been hit by external events (such as the 2004 Tsunami, SARS and Swine Flu).

You really would have thought by now that someone or somebody had the common sense to realise that relying on a Single Source economic revenue flow exposes that market to such external influence and forces. Did anyone conduct an 'Impact Assessment' on the vulnerability of the Thai Tourism Market before they invested in a Hotel in Phuket? Appears not!! Added to that the history of Coup's in Thailand it doesnt bode well to attract FDI.

Regardless of the Politics and the External Forces - Thailand as a destination still has a great attraction. Not necessarily exclusively for Tourists but as a potential Business Destination such as Singapore. Tourists come to Thailand for between 10-14 Days or longer per visit but those same tourists dont spend anywhere near as much time in Dubai or Singapore. Dubai and UAE Tourism has been successful due to the Hub Transit location for airlines such as Emirates and Etihad. Same for Singapore and Singapore Airlines as STOP OVER transit points.

Tourism without doubt provides the fastest and most intense growth for national employment creation (albeit in Dubai most of that labour has to be imported from places such as India or the Philipinnes). Very few 'Locals' are hired as chambermaids, Chefs or Front Office Staff. Thailand has an abundance of locally available labour and workforce is available right outside the gate without having to hire overseas workers and all the associated headaches.

As predicted the lifespan of Mineral Wealth (OIL) has at best a limited life of 15 Years so what is going to replace OIL? In the 1970's the Old Dubai Ruler was very much aware of this and having been caught out before when the Pearling Industry was devasted by the introduction of Japanes Cultured Pearls he was determined that - that wouldn' happen to Dubai again. He embarked on a massive infrastructure programme (of which attracted much criticism). Tourism came to Dubai and the UAE as a secondary benefit with the introduction of The Free Zones and Emirates Airlines.

How could the lessons learned in Dubai be applied to Phuket and other locations in Thailand? Thailand has toyed with Free Zones and Border Zones and Economic Corridors Etc Etc - but they have all failed. WHY? The same reason why China has been to Dubai so many times to see why the UAE Free Zones are so successful and why Chinahas failed to copy and emulate the success of the UAE Free Zones. Application and Methodology plus Common Sense. The Freedo to do business against objections from within your own administration that you are 'LOSING MONEY AND TAX' - You cant lose what you never had.

Free Zones are the 'Carrot' and Trade Off that will attract hundreds of thousands of investors and ultimately value add the local and national economy. Its so easy to see but hard to explain to WOODEN HEADS.... Some get it and understand - others ( Many) cant see - and Will never see it and ultimately miss out on fantastic opportunities to increase the GDP of their domestic economy. I have been doing this for 40 Years going from Country to Country and meeting mainly with Finance Ministers * Looking for more Revenue to TAX).

With Free Zone opportunities comes a magnetic attraction to avoid transparency and even creates the most honest politician to deviate into corrupt acts of illegal activity. At that stage we/I step back and away. An honest politician can potentially create hundreds of thousands if not Millions of jobs through Free Zone activity. Jobs equate to votes and if the national politicians were indeed smart they would embrace Free Zones in a Heartbeat.

So how can a Free Zone save PHUKET?

The 6L Process - a reference to why an Investor selects a Destination?

LOCATION

LEGISLATION and LAW

LOGISTICS

LABOUR AVAILABILITY

LOCALLY AVAILABLE - UTILITIES ( Power & Communications)

LIFESTYLE

Why is Dubai successful and Saudi Arabia isn't? Go ahead you work it out?

Free Zones attract hundreds of thousands of Business Visitors - We didn't attract any Japanese Investors into Dubai - Then they came in Droves.. Why? GOLF COURSES....

How can we FILL those Empty Phuket and Ko Samui Hotel Rooms? The answer is above but will the Thai Government or Phuket Administration understand and see the light? Todate, they haven't and the clock is ticking whilst the Economy goes down the proverbial toilet.