Phi Phi Island Hotels in Loh Bagao

In the second of a Sunday Times series revisiting countries affected by the tsunami, Mark Hodson explains why we'll soon be returning to Thailand.

Everywhere I went in Phuket last week, people commented on the ocean. Six weeks after the tsunami struck, the Andaman Sea looked iridescent, a mesmeric deep blue. "I've lived here for 18 years and it's never looked so clear," mused Louis Bronner, general manager of the Boathouse, one of the island's finest boutique hotels. "The pity is, there are so few tourists here to see it."

We were sitting at Bronner's restaurant on Kata Yai beach, looking out across swathes of powdery white sand. A gentle breeze ruffled the coconut palms. "Obviously, what happened was a tragedy," Bronner said in a thick French accent, "but in a strange way, it has made Phuket even more beautiful. The wave made our beach wider and washed away all the dirt and debris. Even the sand is whiter."

While Thailand's premier beach resort awaits the return of cancelled charter flights, the authorities are busily rethink-ing some of their policies on tourism. In recent years, some beaches on Phuket have become packed with row upon row of sun loungers, and touts selling everything from doughnuts to time-share. Since December 26, the number of loungers has been severely restricted and laws banning beach vendors are being enforced for the first time in years.

What the island really needs, however, is for business to pick up. Most hotels are currently filling just 10%-20% of their beds. Thousands of tourists cancelled holidays after watching television footage of the tsunami, unaware that only about 5% of the beaches in Phuket were badly affected. "I've had e-mails from guests who say it wouldn't be decent to come," said Bronner. "They are worried about bodies floating in the sea. It's all nonsense."

Last week, The Boathouse was repairing eight ground-floor rooms flooded by the wave. It plans to reopen with a party on February 26, when it will slash its high-season rates by more than half. Many other hotels are rolling out similar deals.

Even the ultra-exclusive Amanpuri, a favourite hideaway of A-list celebrities, is advertising discounts for the first time in its 17-year history. Until October 31, a room can be yours for £185 - half the normal rate. The manager, Frederic Varnier, said that nobody was hurt here, and that the wave damage was put right in three days. The hotel's beach, Hat Surin, is among the finest in Phuket, and now looks more beautiful than ever. "The waves deposited a lot of new sand on the beach, which is finer and whiter," said Varnier. "Have you noticed how clear the sea is?"

Like many hoteliers, Varnier is angry at what he sees as grossly inaccurate media coverage of Phuket. "I read a report recently saying 50% of the hotels on Phuket had been destroyed," he said. "It's incredible. In fact, about 90% of hotels are operating normally. I think people confuse Phuket with Khao Lak, which was very badly hit, but is 50 miles away."

Despite the bullishness of hoteliers, some parts of Phuket did suffer badly. About 260 people died, most in three areas: Kamala beach, Patong beach and the fishing village of Bang Tao. It was Patong, the thriving hub of the package-tourism industry, that drew most media attention. Its two-mile beachfront was chock-full of bars, restaurants, tuk-tuks, touts, motorbike rental shops and stalls selling counterfeit T-shirts and DVDs. Most were destroyed, and many Thais died when the basement of a shopping centre was flooded.

Much of the damage remains unrepaired while the authorities decide how to rebuild Patong: there are plans to restrict new buildings in what had become the island's least attractive resort. In the meantime, the food stalls, the girlie bars, the tailors and the tuk-tuk drivers, have simply moved one block inland; remarkably, last week Patong was again humming with activity. In the huge Tai Pan bar, a live band played, the dancefloor was packed with couples and cocktail waitresses rushed between tables.

At the five-star Le Meridien Phuket Yacht Club, which also escaped serious damage, I met Feen Somboon, who has worked at the hotel as a beach attendant for the past 14 years. He was working when the tsunami struck, soon after 10am.

"I saw the sea go back very far," he said. Suspecting something was wrong, and after checking that no guests were in danger, Somboon jumped on his moped and raced home to his nearby village, Bang Konthee. He pulled his wife and their three children, aged 4, 6 and 11, from their small rented house seconds before the wave struck. "Everyone was okay. Nobody died in our village, but the mud took everything," said Somboon. The hotel has given him the equivalent of six weeks' pay. Was he happy with that, I asked. "Oh yes, very happy," he said, his face breaking into a huge smile.

The threat now, for people like Somboon and his family, is that tourism on Phuket will fail to recover. It is estimated that 80% of the island's population relies on income from tourism; One of the most popular excursions from Phuket is to the island of Phi Phi, made famous by The Beach, starring Leonardo DiCaprio. Phi Phi took the full force of the tsunami, and many died, including hundreds of young Britons. The Foreign Office has declared it off limits, and even the Thais give it little hope. The February issue of Thai Airways's in-flight magazine says it is "in ruins".

In fact, some of it escaped unscathed, and a couple of upmarket resorts are operating normally, albeit with a handful of guests. Phi Phi is actually two islands: uninhabited Phi Phi Leh, where The Beach was filmed, and Phi Phi Don. It was the southwest tip of Phi Phi Don, the busy backpackers' enclave of Ton Sai, that was devastated. Even today, the scene is horrific. But a half-hour boat ride away on the sheltered northeast coast of the island, everything is as normal.

I stayed at the Phi Phi Island Village Resort, a superb hotel with 150 staff, but just 16 guests. The owner, Chaiyan Trisuwan, said: "Everyone who had booked before the tsunami canceled. They thought Phi Phi had been totally destroyed. The guests here now are people who have been coming for years. When we told them everything was fine, they wanted to come and support us." Trisuwan has slashed his room rates by 50%.

The world-famous dive sites around Phi Phi have emerged intact. Adam Kelsey, dive manager at the resort, went out intending to clean debris from the reefs. Instead, he found them looking better than ever: "It's incredible. The water clarity is up to 65 feet, and the big fish are coming back for the first time in years: great schools of black-tip sharks and giant trevallies."

A study by Thailand's Royal Irrigation Department has found Phuket's water-pollution levels at their lowest for more than two decades. Juthamas Siriwan, head of the country's tourism authority, has her own theory as to why: "Nature has cleansed itself."

I took a speedboat trip around Phi Phi Leh and saw sparkling emerald lagoons teeming with fish, and encased by limestone karsts. On the way, we passed a pod of dolphins. Maya Bay, where The Beach was filmed - and where, in recent years, it was not uncommon to find up to 100 excursion boats at a time - was almost deserted. It was, more than ever, almost heartbreakingly beautiful. already, some hotels and local businesses have laid off staff. In Thailand, there is no safety net: no unemployment benefit, no redundancy pay. Few people have savings.

If you decide to book a holiday to Phuket, what can you expect? For a start, you will not see homeless people, aid camps or makeshift morgues. On the drive from the airport, we passed a row of canvas tents. I turned to my translator, Jum: "Tsunami victims?" I asked. "No," she smiled, "boy scouts on holiday."

Second, you will be welcomed like old friends and treated to the kind of attentive yet unobtrusive service normally found only at the world's finest hotels. I stayed at the large, four-star Diamond Cliff, near Patong, where staff outnumbered the guests by about five to one: it was like having a team of personal butlers. For hoteliers now, nothing is too much trouble. You want an early check-in, a late check-out, dinner set up on the beach? You've got it. "We have had such a friendly welcome," said Susan Collins, a holidaymaker from Watford. "Our tour operator gave us the chance to cancel, but we e-mailed the hotel and they assured us everything was fine. I'm so glad we came. The people have been fantastic, the beach is beautiful and the weather has been perfect."

The only disadvantage is that the larger hotels lack atmosphere. If you enjoy people-watching by the pool, you might be bored.