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Bangkok’s shopping malls struggle under tourist ban, fierce competition

Jack Burton

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Bangkok’s shopping malls struggle under tourist ban, fierce competition | Thaiger
PHOTO: Nerdnomads

Suvarnabhumi, the name of Bangkok’s second international airport, means “realm of gold,” and was given by His Majesty the late King Rama IX to Bangkok’s eastern outskirts (technically in Samut Prakhan province), once a marshland called Nong Nguhao (Cobra Swamp). With its overtones of wealth, the name represents the hopes of developers, who are turning the area into a retail battlefield.

The problem is oversupply. In late June, multitudes of of shoppers eager for a new experience after weeks of Covid-19 lockdown came to the grand opening of Siam Premium Outlets Bangkok, a brand new mall less than 10 kilometres east of the airport, the main gateway to Southeast Asia’s second largest economy.

The mood was festive for the debut of the massive project, a collaborative effort by Thai mall operator Siam Piwat and US conglomerate Simon Property Group. The joint venture invested 4 billion baht to accommodate an anticipated 10,000 visitors per day in the mall’s 50,000 square metres of floor space.

Siam Piwat Simon’s managing director says “Premium outlet is a retail trend that still has potential to grow”. He believes that growth will reinforce Thailand as one of the world’s most popular tourism destinations. But given the effects of the Covid-19 pandemic, it’s hard to imagine a tougher time to open a mall. The foreign tourists whose spending would normally ensure the success of a new shopping complex are being kept out as the government still bans most international arrivals.

When tourists do return, their numbers and mobility may be limited, and competition among major retailers around Suvarnabhumi will enter a new, more intense chapter. Rivalries between central Bangkok’s many malls and those emerging around the airport will also heat up. There’s plenty of shopping for bored travellers waiting for flights inside the main airport as well.

Some analysts predict the “new normal”, requiring social distancing and limiting customer numbers that could result in significant shrinkage in physical store offerings. The head of retail advisory and transaction services at CBRE Thailand says retailers’ rental space requirement may be reduced by 20 – 40% from the levels before the pandemic. Still, nearly 1.3 million square metres of new retail space is expected in Bangkok by the end of 2023 – more than 25 times the size of Siam Premium Outlets Bangkok. That many commercial facilities opening in a span of just 3½ years is sure to add plenty of new challenges to the retail landscape. According to a spokesman for the Thai Retailers’ Association…

“Premium outlets are business in an upward trend, while duty-free shops are the opposite. In the future, there will be no tax because of free trade agreements. And tourist behaviour is changing. They don’t want to pay a lot of money for short-lifecycle goods. They would buy more goods from premium outlets rather than duty-free shops, where goods are more expensive.”

Thailand has been benefitting from growing overseas tourism, led by the Chinese with their formidable purchasing power, which was booming until the pandemic. According to a report by the World Tourism Organisation, in 2018 the kingdom was the ninth most visited country by tourists in the world, and second after China in Asia. Thailand’s visitors in 2019 were close to 40 million.

Bangkok's shopping malls struggle under tourist ban, fierce competition | News by Thaiger

The turf war near Suvarnabhumi is essentially an extension of the fierce retail competition in central Bangkok, where retailers are also highly dependent on overseas visitors. Siam Piwat introduced mega mall Iconsiam on the east bank of Chao Phraya river, as a joint project with Thailand’s largest conglomerate CP Group and its property arm Magnolia Quality Development, in November 2018. Siam Piwat co-owns Siam Paragon with another retailer, The Mall Group, which also developed Emporium and EmQuartier department stores. Central Group, including Central Pattana, runs Central World and Central Chidlom.

More projects are in the pipeline. Magnolia Quality Development is working on one called The Forestias, scheduled to be completed by 2023. The US$4 billion (124 billion baht) project is on track to be the largest property investment in the kingdom’s history.

Whether in Bangkok proper or near Suvarnabhumi Airport, all major retail complexes have one thing in common: they’re counting the days until the foreign tourist inflow returns. The Tourism Authority of Thailand came up with a plan to promote domestic tourism packages to mitigate the impact from the lack of overseas travellers, but Thais’ spending power is limited compared to that of foreign tourists.

Although the coronavirus situation in the kingdom is well in hand, the risk of a second wave has the world on edge, even as some countries such as the US and Brazil struggle to rein in their first wave. The outlook for Thailand’s big bet on the return of inbound demand is fraught with uncertainty. The “Realm of Gold” that welcomes travellers may not be quite so precious for some time to come.

Bangkok's shopping malls struggle under tourist ban, fierce competition | News by Thaiger

SOURCE: Nikkei Asian Review

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4 Comments

4 Comments

  1. Avatar

    Sam Thompson

    Friday, July 3, 2020 at 4:57 pm

    Bangkok is well and truly oversubscribed in terms of large scale shopping malls and condo developments and still they build. Constant and continuous growth in these areas are impossible to sustain or maintain and in the not-so-distant future, many of these unneeded and unwelcome structures will be rendered useless and unwanted.

    • Avatar

      terry williams

      Friday, July 3, 2020 at 6:15 pm

      I couldn’t agree more, and it seems like we are heading towards a recession again!

  2. Avatar

    Peter

    Friday, July 3, 2020 at 5:17 pm

    Thailand is already way too dependent on tourism and then mostly from one country which is crazy.Besides viruses, China is known for boycotting countries for the slightest reasons, Thailand already experienced this when a tour boat full of Chinese tourists sank.

  3. Avatar

    Toby Andrews

    Monday, July 6, 2020 at 2:55 pm

    I saw a T shirt for sale in a mall in Pattaya for £30.
    No special label clearly for a foreign buyer.
    That is why they build them, maybe they can get those prices – but if the foreigners stop arriving, then . . .

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Read more headlines, reports & breaking news in Bangkok. Or catch up on your Thailand news.

Jack Burton is an American writer, broadcaster, linguist and journalist who has lived in Asia since 1987. A native of the state of Georgia, he attended the The University of Georgia's Henry Grady School of Journalism, which hands out journalism's prestigious Peabody Awards. His works have appeared in The China Post, The South China Morning Post, The International Herald Tribune and many magazines throughout Asia and the world. He is fluent in Mandarin and has appeared on television and radio for decades in Taiwan, Mainland China, Hong Kong and Macau.

Coronavirus (Covid-19)

Covid UPDATE: Wednesday’s new infections rise to 1,335 people, 36 people in “serious condition”

Tim Newton

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Covid UPDATE: Wednesday’s new infections rise to 1,335 people, 36 people in “serious condition” | Thaiger

Thailand’s CCSA has announced 1,335 new infections today, after a slight dip in the 10 day surge yesterday. 1,326 of those new infections are local, not imported, and mostly from Bangkok. Today’s tally takes the national total to 35,910 since January 2020 when the first case outside China was detected in Thailand on January 13.

The new infections have mostly emerged in Bangkok with 351 cases. Surrounding provinces report an additional 115 infections today. In other provinces, 877 people.

It’s also been reported today that 36 people are currently in a serious condition and 9 people are on ventilators. Here’s the number of cases reported each day since the start of April…

April 1 – 26 infections

April 2 – 58 infections

April 3 – 84 infections

April 4 – 96 infections

April 5 – 194 infections

April 6 – 250 infections

April 7 – 334 infections

April 8 – 405 infections

April 9 – 559 infections

April 10 – 789 infections

April 11 – 967 infections

April 12 – 985 infections

April 13 – 965 infections

April 14 – 1,335 infections

Meanwhile, Prachuap Khiri Khan officials have ordered the closure of “high risk venues” such as pubs, bars, water parks, children’s playgrounds, gyms, cinemas, game shops. The Governor says restaurants can open “but no alcohol can be served”. This includes the seaside town of Hua Hin.

In Krabi there is now a total of 11 infections, 6 new ones yesterday.

In Chon Buri, which includes Pattaya, there were 99 new confirmed infections of Covid today … a similar number to the past few days.

Total number of infections being treated in provinces…

• Bangkok: 1,689
• Chiang Mai: 880
• Chonburi: 594
• Samut Prakan: 416
• Narathiwat: 304
• Prachuap Khiri Khan: 265
• Samut Sakhon: 166
• Pathum Thani: 124
• Sa Kaeo 105
Covid UPDATE: Wednesday's new infections rise to 1,335 people, 36 people in 

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Coronavirus (Covid-19)

Bangkok police tracking down owners of Thong Lor clubs where virus resurfaced

Maya Taylor

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Bangkok police tracking down owners of Thong Lor clubs where virus resurfaced | Thaiger
PHOTO: Facebook / Krystal Club

Police in Bangkok are on the hunt for the owners of 2 nightclubs considered ground zero for a third wave of Covid-19 currently spreading around the country. The Krystal Club and Emerald Thonglor 13, in the capital’s fashionable Thonglor district, are currently closed, with the managers of both sentenced to 2 months’ imprisonment. However, officials are now attempting to track down the real owners of both establishments.

Nation Thailand reports that the authorities are examining ownership and shareholding documentation related to the 2 venues, after police chief Piya Tawichai confirmed a cluster of Covid-19 infections is believed to have spread from the clubs. The managers of both venues have been charged with violating the emergency decree and disease prevention regulations, with the Bangkok Municipal Court sentencing them to 2 months’ imprisonment on April 9.

The head of Metropolitan Police Division 5, Sophon Saraphat, has also transferred 2 Thonglor police officers, including the superintendent of Thonglor police station, while an investigation into the Covid-19 cluster continues.

Sophon says authorities are also examining the operating licences of both clubs, which have been closed for 30 days, while officials determine if they should be shut down for a period of 5 years.

3 nightlife venues in Phuket, thought to be behind a resurgence of Covid-19 in the southern province have been closed as part of a wider temporary shutdown of nightlife on the island. It is not yet known if the owners will face prosecution.

The Illuzion and Shelter nightclubs in Patong, along with the Café del Mar beach club in Kamala each held mass parties during the weekend of April 2- 4, with invited guests travelling from as far as Bangkok. Media reports put attendance at each party at over 3,000.

SOURCE: Nation Thailand

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Coronavirus (Covid-19)

UPDATE: Field hospitals being established in Covid hot zones around Thailand

Tim Newton

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UPDATE: Field hospitals being established in Covid hot zones around Thailand | Thaiger

UPDATE: The field hospital in Bangkok’s Bang Bon district, west of the Chao Phraya river, had its first 10 Covid patients today. The director of the medical services office of the Bangkok Metropolitan Administration says that the 10 patients into the makeshift hospital, located at the Chalerm Phra Kiat Stadium, will enable assessment of the performance by the medical team, before more patients arrive – Thai PBS World

ORIGINAL STORY: Despite the confident posture and Songkran going ahead, amid restrictions, there is a lot of background activity which suggest the authorities are getting ready for a surge of new infections at the end of the Songkran break, officially this Thursday (but in reality, next Sunday at the end of the weekend when most people who travelled home will return for a resumption of work).

The Thai lunar new year celebrations – Songkran – are the largest mass movement of Thais each year, a source for a huge leap in road deaths and accidents. And, this year, a potential super-spreader event.

Quietly, at least 3,000 extra beds have been prepared in 10 field hospitals around Bangkok. The government has also confirmed that additional field hospitals are being set up in other potential ‘hot zones’, including Phuket, Chiang Mai, Chonburi and Hua Hin. Some of them were set up last year, and since closed, and now being prepared for new positive infections.

One Thai person who had been in one of the field hospitals put together a check-list of things to take IF you end up as an invited ‘guest’ HERE.

The CCSA say they are looking for additional beds in hotels and previous state quarantine facilities (where repatriating Thais were housed for their free quarantine) to be used if needed.

This year’s Songkran had bad timing, coming just a week after a number of major clusters were identified around some of Bangkok’s popular nightlife areas in 3 key inner city districts. Even before Songkran these isolated clusters had already spread into the provinces. In the weekend before Songkran the government had already listed 37 provinces which had instigated some form of paperwork or restrictions for people who had been in any of the 3 Bangkok districts.

The government also leapt on the source of the new outbreaks – bars, clubs and entertainment venues – and promptly shut them down for at least 2 weeks. At this stage it looks likely that that ban will be extended beyond the 2 weeks and, depending on the extent of new infections following the Songkran holiday, additional restrictions will also be added.

Even today the Civil Aviation Authority published a number of new in-flight restrictions for passengers – another blow to the hard-hit domestic aviation sector.

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