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Currency will be a key driver in Phuket’s (eventual) tourism recovery?

Bill Barnett

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Currency will be a key driver in Phuket’s (eventual) tourism recovery? | The Thaiger
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OPINION

by Bill Barnett from c9hotelworks.com

In the lead-up to the Covid-19 crisis one constant complaint by Thailand’s hotel sector has been the strength of the Thai Baht. Zeroing in specifically on the Mainland Chinese market, the rapid demise to the island was in part triggered by the tragic boat accident in mid-2018, along with a number of other country-wide negative tourism stories that hit China’s social media spotlight.

Of course, later the blame game shifted to China’s economic slowdown, the pending trade war with the US and finally the rise of lower priced regional competitors such as Vietnam. Looking into the metrics, while the 2018 incident promoted a downturn, the reality is the later stage weak numbers can be attributed to many things, including currency flips.

So, sitting in my office on a Saturday, my gut is telling me Thailand looks set in April to be over the worst of the cases, and it makes sense to start looking ahead to what tourism recovery may look like. Mind you May is not looking all that great so let’s fast forward to June.

Please understand I am not deluded enough as a certain Tweeting Cheeto in Washington D.C. to say everyone will be back in church by Easter, or in this case the temple, but statistically Covid-19 numbers seem to be reducing.

I thought it made sense to highlight some of the currencies attached to Phuket’s key tourism markets and see if the present outlook was positive or negative, so here we go…

Chinese Yuan (RMB)
Today, sitting at 4.65. Last September was down 4.25. Now if we go back to the heyday of 2018 the mid part of the year flirted with 5.00 and above. So, while we are not there yet, the good news is the Yuan is getting stronger in a market that is key to Phuket’s recovery. Result POSITIVE

Russian Ruble
In 2019, 44% of international passenger arrivals were from China and Russia. The Russian ‘Snowbird’ market is key to island tourism due to a high average length of stay – around 12 days. This seasonal trend runs from October to April. Today, the Russian Ruble is .44. Taking a look back at this last peak season the Ruble was between .48 and .49 so the currency has taken a sharp hit, mostly on the bottom falling out of global oil prices. If you move back to 2017, trading was at .55 to .55. That said, snow is a mighty big driver of demand for Phuket but the weak Ruble will likely mute some demand. Result NEGATIVE

British Pound
I’m not even going to touch how Brexit may or may not impact this currency, but let’s look at the current situation. The Pound is 40.69 to the Baht. During the mid-part of last year it had moved to the 37 to 38 level during the Brexit debate and clearly this impacted UK travellers to Thailand at a time of summer holidays. Checking into 2017 and 2018, while off the sublime days of 55 in 2016, trading in the former was in the range of 44-45. While we’d like to say 40 and above is heading in the right direction, volatility is likely. Result NEUTRAL

Euro
Today the Euro is sitting at 35.75. Much of Q3 and Q4 last year, it played in the 33 to 34 level, and again was a negative for European travellers to Thailand. In 2018 strong performance was 37 to 39. Still, the trend in the past few months, I believe gives hope for summer travelers to have good value from Europe and this remains a strong Thai market. Result POSITIVE

Singapore Dollar
The Sing dollar is currently slightly above 23. Taking a look at late Q3 and Q4 2019, the currency was down in the 22 to 22.5 level. While Singapore has strong airlift to Phuket, the market does work on value and the current swing up is a definite improvement. Looking at location location location as the mantra and an upswing, this is a natural early mover for Phuket to recovery. Result POSITIVE

One notable omission is the US dollar and while North America is not a leading market for Phuket the cartel of the brand and sentiment of global travellers as a reference marker is important so the recent uplift of the dollar over 33 to the Baht is again a step in the right direction.

Still early days, but again, will be interesting to look how currency plays out in the Covid-19 recovery story for hotels.

Keep in contact with The Thaiger by following our Facebook page.

Bill Barnett has over 30 years of experience in the Asian hospitality and property markets. He is considered to be a leading authority on real estate trends across Asia, and has sat at almost every seat around the hospitality and real estate table. Bill promotes industry insight through regular conference speaking engagements and is continually gathering market intelligence. Over the past few years he has released four books on Asian property topics.

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Coronavirus (Covid-19)

Thai food giant to provide a million meals priced at 20 baht

May Taylor

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Thai food giant to provide a million meals priced at 20 baht | The Thaiger
PHOTO: CP Freshmart Phetchaburi/Facebook

Thai food conglomerate Charoen Pokphand Foods says it plans to offer heavily discounted ready-to-eat meals for those facing financial difficulties as a result of the economic fallout of Covid-19.

CEO Prasit Boondoungprasert says a million meals will be distributed to Fresh Mart shops around the country and will cost just 20 baht. There will be a choice of dishes on offer and customers who purchase 5 meals at a time using the TrueWallet app will get an additional 5 baht discount .

“Six ready-to-eat meals will be offered under the campaign – rice with chicken breast in spicy sauce, rice with roasted chicken, rice with spicy chicken, fried rice with Korean-style roasted chicken, rice with garlic and liver and rice with omlette.”

Nation Thailand reports that CPF is also delivering free food to impoverished homes in Bangkok on Tuesdays, Thursdays and Saturdays and distributing vouchers to village healthcare volunteers around the country so they can purchase items at discounted prices at Fresh Mart branches nationwide.

Charoen Pokphand Foods Public Company Limited a company of the Charoen Pokphand Group, is an agro-industrial and food conglomerate headquartered in Thailand. Approximately 64% of its revenue came from overseas operations, with 30% from its home market of Thailand, and 6% from export operations. It recently acquired Bellisio Foods, one of the largest frozen food suppliers in the United States, for US$1 billion, as well as Westbridge Foods, a major British poultry producer with turnover of over £340 Million.

The company’s core businesses are livestock and aquaculture. Livestock operations include chicken broilers, chicken layers, ducks, and swine. In aquaculture, the two main marine animals are shrimp and fish – Wikipedia.

SOURCE: Nation Thailand

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Students to wear mask, get temperature checked at school

Caitlin Ashworth

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Students to wear mask, get temperature checked at school | The Thaiger
PHOTO: Caitlin Ashworth

Students will need to wear a face mask and have their temperature checked before entering school. The Public Health and Education ministries recently put restrictions in place for the start of school set for July 1, according to Nation Thailand.

Schools are categorised as a high risk area for the potential spread of the coronavirus. In general, cold and flu bugs spread fast in schools. Now, with a more serious pandemic, teachers and school officials will need to work extra hard to keep students healthy and somehow find a way to make sure students are social distancing.

“Hand sanitising checkpoints are now required throughout school grounds. Door knobs, toilets and playgrounds must be cleaned often. If a student has symptoms, the school must inform public health authorities.”

Some advisors are saying schools should wait longer to open, while others say children are less likely to show symptoms of the virus. The start date has already been pushed back and students are looking at a so-called “mega term” with little to no holiday break to make up for lost time until next year.

Thailand’s chief virologist, Dr. Yong Poovorawan, from the Faculty of Medicine says reopening schools needs careful consideration.

“If they do reopen in July, class sizes must be reduced to make sure students are seated a safe distance apart. It’s unclear how schools that are at capacity will lower class sizes.”

Distance-learning classes have launched online, but the system has had a few early bugs, with many Thais without internet or some unable to access the classes.

SOURCES: Nation Thailand| Thai PBS World| Bangkok Post

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Phuket chef hands out over 2,000 free meals

Jack Burton

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Phuket chef hands out over 2,000 free meals | The Thaiger

The Covid-19 pandemic has seen many heartwarming outpourings of charity, with a lot of businesses, both Thai and foreign, handing out free meals and essential goods to those affected by the crisis. The southern province of Phuket is no exception, with many pubs and restaurants joining in. But people in the island’s Bang Tao district might be surprised to learn that their meals were prepared not only by a career chef, but a student and disciple of legendary Chef Paul Bocuse.

Pablo Blattman, owner of Dedos restaurant, and his crew hand out more than 160 free meals a day and have now donated well over 2,500 meals to the community. Blattmann, born and raised in La Paz, Bolivia, by a Swiss mother and Bolivian father, says the two cultures gave him insight in different universes of flavours.

At a time when most neighbouring restaurants are shuttered (or crippled by the ban on alcohol sales), Blattman says he wants to “give something back to the community which has given me so much.”

Phuket chef hands out over 2,000 free meals | News by The Thaiger

Although the crisis means Blattman must temporarily close the restaurant (again) at the end of May, he intends to go on giving back to the community.

“Our commitment to our community is still here, and we will keep our efforts up, but in a different way: dry food, going to workers’ camps, going upcountry… be assured that every penny donated will reach people in need. We are keeping a strict accounting on all our expenses and any donor is welcome to check it.”

Those wishing to support Dedos’s charitable efforts may visit its Facebook page.

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