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Chinese setting up shop in Chiang Mai

The Thaiger & The Nation

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Chinese setting up shop in Chiang Mai | The Thaiger

by Jintana Panyaarvudh

The charm and beauty of Chiang Mai, the capital of northern Thailand, has made the province not only a must-see destination but also a golden nest for foreign investors – especially Chinese seeking business opportunities. Take Chinese entrepreneurs like Cherry and Zong Dan, for example. Having fallen for Chiang Mai’s charms, they opted to start their first overseas business in the province.

Chinese setting up shop in Chiang Mai | News by The Thaiger

Cherry, a 35 year old entrepreneur from Chengdu, decided to invest in a guesthouse in Chiang Mai’s Muang district a few months ago after finding her previous job as a writer on property issues was no longer satisfying.

She chose Chiang Mai after the city left a deep impression on her when she first visited five years ago.

“Chiang Mai is not far from my hometown, has nice weather, and the people are warm and friendly,” Cherry said.She rented an eight-room guesthouse on Sirimangkalajarn Road, and partnered with the owner of the building, since Thai laws do not allow her to fully own a business here.

Cherry is currently staying in Thailand on a 60 day tourist visa while she applies for a work permit. It’s a complicated process and expensive, she admits; she even had to return briefly to China to retrieve some required documents.

As a Chinese national, Cherry knows her compatriots prefer to stay in a hotel where staff speak their language, and so she hired Thai staff who can speak some Mandarin. Her guesthouse boasts many return customers. To boost her sales, she turned to the largest online travel agency in China, Ctrip. Cherry’s initial investment was around 1.5 million baht and she expects to make it back in the next two years despite strong competition from an abundance of tourist accommodation in Chiang Mai these days.

Asked her advice for other Chinese entrepreneurs considering investing in Thailand, Cherry says people could invest in property to live in or rent out – but she wouldn’t advise anyone to run a guesthouse as she does. Cherry thinks the number of Chinese tourists coming to Thailand will continue to rise because prices are low and a high-speed train will soon be connecting the two countries.

Asked about anti-Chinese investment sentiment in Thailand, Cherry said, “I hired four Thai staff. They now have jobs and can help to grow the Thai economy.”

Chinese setting up shop in Chiang Mai | News by The Thaiger

Zong Dan moved from Saraburi, where she was a Chinese volunteer teacher two years ago, to Chiang Mai because she likes the city. She then became the co-owner of the famous Chinese food shop Miss Liangpi in a soi on Nimmanhaemin Road after seeing a business opportunity there.

At the time, there were only a couple of Chinese food shops in the city.With the aim of serving Chinese food to their tourist compatriots, Zong and her husband, whose hometown is in Xi’an in Shaanxi province, decided to open a small shop to sell the signature dish of Xi’an – Liang pi, or cold-skin noodles.

Like Cherry, Zong at first found it difficult to set up the business, including identifying the best location for her shop and then registering her business, which took around three months. Zong, who runs the shop with a Thai partner, now has a work permit in hand.

Her shop was ranked one of the most popular in 2017 by a Chinese review website and now boasts Chinese, Western and Thai customers. Sales this year, however, have not been as good as last year, Zong says, but the business still makes a healthy profit. Their plan is to run the shop for four or five years and then take stock before deciding their next move.

Last year, Chinese topped the list of foreign tourists to Thailand, reaching almost 9.8 million visitors and spending around 524.4 billion baht. Authorities expected the number of arrivals this year to reach 12 million. Chinese were also the only nationality to increase their numbers in Chiang Mai from 2014 to 2016 – with an almost 43 per cent increase – while other nationalities decreased, according to the Intelligence Centre of Tourism Authority of Thailand (TAT).

“When the market grows, demand grows, as does investment. Chinese people feel happier talking with Chinese speakers,” a TAT official who asked not to be named said

.Chinese people are investing in every country in the world, noted Yos Santasombat, a professor of Anthropology at Chiang Mai University. China’s official “going out” policy is spurring investment, and not just in Thailand, he said.Yos Santasombat.

“They are coming to explore the possibility of investment. If there is a better situation or a better deal or a better chance elsewhere they will go there,” said the professor, who has conducted several studies into Chinese capitalism and the impact of China in the Mekong region.

Chinese setting up shop in Chiang Mai | News by The Thaiger

Read the rest of this story HERE.



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Transport Ministry and State Railways told to pay HK company 11.9 billion baht

Kritsada Mueanhawong

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Transport Ministry and State Railways told to pay HK company 11.9 billion baht | The Thaiger

The long running issue of Bangkok’s ‘stonehenge’ has been resolved after the Supreme Administrative Court handed down its findings today over the disputed contract of the 60 kilometre link from central Bangkok to Don Mueang Airport.

The Thai Ministry of Transport and the State Railway of Thailand have been dealt a costly blow after the Supreme Administrative Court today overturned the Administrative Court’s verdict and ordered the two state agencies pay almost 11.9 billion baht in compensation to the Hong Kong-based Hopewell Holdings Company for the termination of the Hopewell project – a 60 kilometre elevated highway and rail line from central Bangkok to Don Meuang international airport back in the 90s.

Thai PBS reports that the compensation, plus another 500 million baht in bank guarantees put up by Hopewell Holdings Company, must be paid within 180 days of the verdict from the Supreme Administrative Court.

The Thai court’s verdict will put an end to the long-running legal battle, between the Transport Ministry and the SRT on one side and HK’s Hopewell Holdings on the other.

Hopewell Holding was granted the 30 year concession in 1990 to manage the project, given the nickname of the Thai “Stonehenge”.  The project was riddled with difficulties and widely criticised, resulting in construction being suspended in 1992 and the eventual termination of the contract in 1998, with less than 20% of the work completed.

The dispute over compensation went through an arbitration process under the auspices of the Thai Arbitration Institute which in 2008 ruled in favour of Hopewell Holdings, with both the Transport Ministry and the SRT ordered to pay Hopewell about 12 billion baht in compensation for wrongful termination of the concession.

The two state agencies challenged the arbitration tribunal’s ruling by taking the case to the Administrative Court which in October 2014 overturned the tribunal’s ruling on the grounds that Hopewell’s claim was barred by a time limitation.

Hopewell Holdings then successfully appealed the ruling to the Supreme Administrative Court.

SOURCE: The PBS

Transport Ministry and State Railways told to pay HK company 11.9 billion baht | News by The Thaiger

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Phuket hotel watch – 3 months down, 9 to go in 2019

Bill Barnett

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Phuket hotel watch – 3 months down, 9 to go in 2019 | The Thaiger

by Bill Barnett of C9Hotelworks.com

At the beginning of the year Phuket’s tourism and hotel sector was cautiously optimistic after a strong first half of 2018 and humbling second half. Key terms that kept popping up were Mainland Chinese, Thai Baht Appreciation, Elections and Supply Concerns.

So today, with three months of performance under the belt in 2019 what are the key trends in hotel trading? These can best be compressed in the following points –

According to data from hotel benchmarking group STR, Thailand remains Southeast Asia’s leading destination for Mainland Chinese, but the gloss is being diminished by Vietnam’s meteoric rise, and strong numbers by the Philippines and Cambodia.

Market-wide RevPar shunk by 0.04% in 2018 and flat demand at the onset of the year is now shifting into negative territory moving into February and beyond. Turning back to last year, group demand is falling which is as key concern in a wholesale driven marketplace.

One stark positive is that RevPar is being propped up by rates and not occupancy. A key takeaway is that in peak and high season, Phuket hotels are able to drive rates up in key periods and continue to do so. This of course is a broad trend.  Good hotels tend to perform at higher levels, while poorly managed ones remain subpar.

Getting beyond the numbers, as I speak to hoteliers the expectation is that wholesalers remain a critical component of the island’s hotel industry and despite the expected shift with technology to more direct bookings, the reality is that wholesale models are sensitive to demand volatility and the result of this feeding frenzy most often will be either flat rates for the year or in some cases a retraction.

We expect the remainder of 2019 to be challenging. Some hotels will look at this as an opportunity to reposition, renovate or cut costs. While others will look at new segments, niche offerings or emerging markets like India to regain momentum.

As for the top critical issues facing Phuket hotels, in my opinion these can be distilled in the following Top 3 Things Keep Me Awake at Night…

• Mainland Chinese – If tourism players or hotels believe the damage to Brand Phuket is over, think again. Talking to key tour operators there remains a hangover from last year’s boat sinking incident and travellers remain keenly concerned over safety. Only time and more concentrated promotion will see a return of the numbers.

• Growing Supply and Demand Imbalance – The current pipeline is just over 8,000 keys in development on the island. What’s more concerning is that projects in planning are not represented in this metric, and by our estimate there are approximately 5,000 more keys in planning. While both the pipeline and planning numbers will see some wash, the sum total exceeds current and forecasted demand.

Moreso, the rise of unlicensed condominiums, apartments, houses and villas is continuing unabated and is further exacerbating supply issues. Every time you see a group of tourists renting a 3 or 4 bedroom villa, that’s three or four hotel rooms that lay empty. Government control of unlicensed properties is a key issue facing Phuket’s tourism industry.

• Diminished Natural Resources and Strained Infrastructure – Water tops the list and there is little doubt we are reaching the tipping point with mounting shortages and soaring demand. Electricity is another concern. Lastly is a rising number of vehicles on the road, a urbanising trajectory and slow development of roads and public transport.

To these point’s lets revisit the hotel development pipeline and reflect that a island long term master plan, zoning for new tourism expansion and requirements for developers to invest in public infrastructure to obtain operating licenses is sorely lacking. Something has to give on this front.

In conclusion am I pessimistic about Phuket’s tourism and hotel future in 2019 and beyond? Absolutely not, direct airlinks are growing and the island has a well-structured capacity for handling tourism, but I firmly believe looking into our problems, discussing and finding ways to resolve these are critical to a sustainable growth pattern.

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‘Seastead’ set up off coast of Phuket

Kritsada Mueanhawong

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‘Seastead’ set up off coast of Phuket | The Thaiger

PHOTOS: Nation TV

A Thai couple has successfully set up a ‘Seastead’ near Phuket.

Seasteading is aiming to build floating societies with “significant political autonomy”. Nearly half the world’s surface is unclaimed by any nation-state, and many coastal nations can legislate “seasteads” in their territorial waters (like a “homestead” but wetter).

The nation TV reports that website ‘Bitcoin.com’ and ‘Ocean.builders’ report that the Thai couple Chad Elwartowski and Nadia Summergirl are are the first seasteaders who established a small seastead 12 nautical miles off Phuket.

Most of the construction of the Seasteading was built on the island of Phuket. The installation in the sea started on January 9.

Mr Elwartowski reveals that the reason that they have chosen to settle near Phuket as the construction price is cheap. The sea is suitable for the establishment as waves are not too high and can attract many tourists.

SOURCE: Nation TV

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