Thai hotels on the chopping block

[buksida]

Hundreds of hotels at beach resorts in Thailand are up for sale according to report in the Thai language news service Prachachat.net.

Claiming the country’s hotel business is now in free-fall due to the Covid-19 lockdown it reported that a slew of three to four-star hotels are on the chopping block as property owners run short of financial resources to service bank debts.

Most of the properties up for sale are in three main tourist provinces Phuket, Krabi and Samui.

The report claims opportunist buyers from Singapore and China lead the list of foreigners who are ready to snatch up property bargains at prices that have dropped by around 50% of their pre-Covid-19 value.

A source in the hotel industry told “Prachachat Business” that hundreds of hotels are now the targets of property funds that have the resources to buy during the crisis when prices are impacted.

But most of the property raiders are only prepared to buy at basement prices well below the evaluation before Covid-19 stalled travel in its tracks. Property websites listed hotel properties in Phuket, Samui, Surat Thani, Krabi and even Pattaya with list prices of THB1,000 to 10,000 million, medium-sized three-star properties were selling at THB500 to 1,000 million and small hotels with prices of THB50 to 100 million.

The fire sale will continue unabated as most resorts in southern Thailand cannot rely on the domestic market that at present is the sole saviour for resorts that are close to Bangkok such as Hua Hin and Pattaya.

A property expert warned that cheap sale of hotel real estate would eventually extend to Chiang Mai, Lamphun and Chiang Rai in North Thailand.

In many instances, prices will fall by 20 to 30% lower than the market price, and cashed-up foreign investors are ready to swoop in and snatch up bargains.

As long as lockdown measures and flight bans continue, Thailand’s hotel industry will remain vulnerable to hostile takeovers. If hotels cannot reboot operations soon, they will lack resources to weather the storm until the European leisure travel market gains traction possibly not until 2021.

https://www.ttrweekly.com/site/2020/06/ ... ing-block/

Looks like a good entry for a Chinese takeover ...

[Big Boy]

It won't be a problem, this is Teflon Thailand. They'll simply put room prices up to cover their losses, and tourists will flock to fill them

[pharvey]

"Little China" here we come........

[Spitfire]

"Little China" here we come........

Not just on this one but I can see thousands of Chinese workers streaming into Thailand to build this high speed rail line through Isaan up to the Lao border from BBK too. That's one of the caveats for those accepting such deals with the Chinese, is that their people build it. The places it will go through will turn into ghastly areas overrun and I can't see the Thais liking it to be honest. The virus has just put things on hold.

[buksida]

Doesn't help with the junta only giving benefits to the wealthy and the big chain hotels owned by the wealthy ...

Hotels see low demand for 4-day weekend
Hotels still face sluggish sentiment for the upcoming four-day weekend holiday, resulting from concern over the economic situation and complicated processes involved in the "We Travel Together" tourism stimulus measure.

As the economy has decelerated because the majority of businesses were affected by the virus to different degrees, many people are now careful about spending on tourism, said La-Iad Bungsrithong, president of the Thai Hotels Association's (THA) northern chapter.

Local tourists prefer road trips with family within a 300-kilometre radius from Bangkok rather than boarding a jet to more far-flung destinations such as Chiang Mai.

For the long weekend, the occupancy rate for hotels in Chiang Mai is 25-26%, of the 30% of hotels that reopened.

https://www.bangkokpost.com/business/19 ... ay-weekend

[wenshidi]

How many hotels have been forced to close so far?
I know that the Holiday Inn has laid off all its workers, and I would imagine that the Chiva Som is hurting after its million dollar makeover. Have any other large establishments succumbed yet?

What happened at Webster's University? They always seemed to have large numbers of overseas students. Did they all go home?

[caller]

Some hotels have reduced the hours that staff work - and pay - to try and keep them in some form of employment during this time. Those I know of doing this are budget chains.

I know the owner of one hotel and he has basically just kept the bare minimum of staff on. Not shut as such, but just riding out the storm.

[wenshidi]

I know the owner of one hotel and he has basically just kept the bare minimum of staff on. Not shut as such, but just riding out the storm.

How long does he estimate that he will be able to continue with this strategy?

[caller]

I know the owner of one hotel and he has basically just kept the bare minimum of staff on. Not shut as such, but just riding out the storm.

How long does he estimate that he will be able to continue with this strategy?

Probably indefinitely, or just close it. When I met him the other week he was feeling confident that by March, things might have returned to the 'new-normalised'! Not how it was before the virus.

[migrant]

I know the owner of one hotel and he has basically just kept the bare minimum of staff on. Not shut as such, but just riding out the storm.

Is his clientele mainly Thai? If so I wonder what his occupancy percentage is compared to pre covid.

[caller]

Is his clientele mainly Thai? If so I wonder what his occupancy percentage is compared to pre covid.

I would assume so. And wealthier Thais at that. I might be meeting him again next week, if so I'll find out more.

Edit - just checked and it would attract a mixed bag as there is a variety of accommodation on site. From twin rooms to private pool villas.

[handdrummer]

It sounds like some hotels are cheaper than houses. Not a bad alternative, especially if you have a large family.