PHUKET: In light of the continuously rising cost of living, accounting books of rice and noodle vendors across Phuket and Thailand could become subject to increased audits this year.
As of yesterday the Department of Internal Trade (DIT) issued official price cap suggestions for 10 common Thai menu items to be priced under 35 baht.
These include rice dishes served with omelet, curry, boiled egg, pork leg, basil stir fried or fried rice (with pork or chicken), as well as several common noodle dishes – with and without soup.
Price suggestions for such items will be divided into three categories depending on vendor type.
Blue Flag (“Tong Fa”) government certified vendors will be expected to charge as low as 15 baht for a basic rice and omelet dish and up to 30 baht for other items, while general food centers will be asked to charge 25 to 30 baht and as much as 35 baht inside shopping and business centers.
The move is a response by the Ministry of Commerce to a wave of complaints from consumers who have been dissatisfied with recent menu markups, despite costs for many base items such as eggs and palm oil actually decreasing.
Confirming that the price suggestions will affect the island, Phuket Internal Trade Office Chief Supatcha Boonpalit told the Phuket Gazette, “These will not be strict price controls, just suggestions. There are many factors we [authorities and auditors] will need to consider as to whether prices exceeding the government suggestions are justified or not,” she said.
It’s broad measure, aiming to guide the market, not control it, she emphasized
Nonetheless, food vendors nationwide will be asked to comply with the price suggestions, when possible, or else face the possibility of being audited.
An announcement on the Office of Commercial Affairs Phuket website states that vendors who refuse to comply with the price suggestions, and are suspected of unnecessarily maintaining high menu prices, would be subject to auditing by the Revenue Department.
Such audits would require vendors to provide detailed documentation of their expenses and tax records.
Anyone found in violation of the Prices of Goods and Services Act, B.E. 2542 (1999) may be subject to a maximum penalty of seven years in prison and/or a fine of 14,000 baht, the announcement also stated.
Flower sales bloom
As expected, flower shops’ revenues blossomed in Phuket on Valentine’s Day.
Many flower shops reported record orders for floral arrangements, from both inside Phuket and off-island. Classic red roses were the most popular items among the adults, while teddy bears and chocolates were increasingly popular among teenagers.
Flower shops in Phuket Town had displayed special flower arrangements in shopfronts in order to lure in customers seeking to buy flowers for loved ones.
Pran Suppasri, owner of the “Flowers by Metha” flower shop, said business began picking up at his shop the day before the day of love.
“We ordered most of our red roses from China. We already received 40 to 50 orders of 1,000 baht each. We also received 30 to 40 orders for carnation arrangements that start at 500 baht. Most of the people ordering flowers from us are adults,” said Mr Pran.
“Even though flower prices went up by 20 to 30%, it hasn’t affected demand. We still received a lot of orders yesterday [Monday] and expect more throughout Valentine’s day,” he added.
Another Phuket Town shop called “I am Flower” reported “very good” sales, with orders gushing in from Phuket and off-island.
“We arrange the flowers into bouquets at prices starting at 600 baht. We received 50 to 60 orders yesterday, and more continue to pour in today. Our customers are both Thai and foreigners, and about 10% of orders are placed from Bangkok,” said shop assistant Chayatrid Gurtsripeng.
“Red roses are the most popular flower here, with 90% of our customers ordering them. White roses and lilies are also popular. I think sales are stronger than Valentine’s Day last year,” he said.
Flowers are not the only popular items for the Valentine’s Day. While most adults enjoy roses, youngsters tend to prefer some sweets for their sweeties. Some flower shops are expanding their product lines accordingly.
The owner of the Buppha Flower Shop in Phuket Town said, “We began receiving an increased number of orders yesterday [Monday], but not as much as last year. Most adults order flowers, but the teenagers have been buying teddy bears and chocolates that we have made available as another option for our customers,” he said.
Kata – Karon branded green
Thanks to the charitable initiative, if not clever product placement marketing, of Kasikorn Bank (K Bank), Kata and Karon beaches will be branded ‘green’, but not necessarily in the name of the environment.
K Bank, or the Thai Farmers’ Bank, last week donated 3,000 beach umbrellas and 50 beach tents to the Karon municipality.
All of the new umbrellas and tents are green and branded with the K Bank logo, and will replace the old and damaged ones.
The tents and umbrellas were presented by K Bank’s Executive Vice President Vasin Vanichvoranun, during a donation ceremony held on February 9.
Mr Vasin said that the new umbrellas and tents will be utilized by beach chair and umbrella groups, as well as beach massage groups operating along Kata and Karon beaches.
“Since most of the existing umbrellas and tents were in deteriorating condition, the scenery wasn’t beautiful and the beach wasn’t orderly. In order to make it [the beach] beautiful and orderly with umbrellas all of the same color, Kasikorn bank has made this donation to the Karon municipality to be used by operators from now on.”
Karon Mayor Thawee Tongcham accepted the donations on behalf of the members, and agreed to distribute them to beach operators.
“The old ones made the beach less beautiful and needed to be replaced,” he said.
Taiwan bar raised
Tourism operators have increased expectations for the Taiwanese tourist market following a recent tourism promotion “road show” trip to Taiwan.
A number of Phuket senior officials and tourism business operators negotiated deals in Taiwan from February 7 to 11, focusing on markets in two Taiwan cities: the country’s capital Taipei, and its third largest city, Taichung.
Leading the entourage was Phuket Governor Tri Augaradacha, Phuket OrBorJor President Paiboon Upatising, Phuket Tourist Association President Somboon Jirayus and Bangonrat Shinaprayoon, the director of the TAT regional office in Phuket.
Speaking about the bigger picture of the Taiwanese tourist market, Somboon commented, “Before, Taiwanese arrivals on Phuket were as much as 200,000, but declined sharply after the tsunami.
However in the last two to three years, the numbers are showing good signs and there are now three more direct flights from Taiwan to Phuket.”
Mr Paiboon agreed and went on to outline the significance of Phuket tourism road show trips.
“Phuket’s tourism sector has benefited from the success of previous road shows, such as those in China, Hong Kong, Malaysia, Singapore, Indonesia, Dubai, Qatar and Australia. The success shows in the number of new direct flights from each of these markets, and we have the same expectations for Taiwan.”
“China Airlines now flies directly to Phuket and tour agents [in Phuket and Taiwan] have responded that [Taiwanese supply of] tourists will increase,” he said.
Phuket hotel watch – 3 months down, 9 to go in 2019
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.
‘Seastead’ set up off coast of Phuket
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
Massive 11 hotel project, surf club and waterpark for Kata, Phuket
by Bill Barnett, C9Hotelworks.com
Thai developer K.W. Plaza group has unveiled plans for a large-scale mixed-use project called The Beach Plaza on 15 rai, that will have 11 three and four star hotels with a total of 1.490 rooms. The developer is already pitching the unconstructed project to global hotel interests for an imminent sale.
The properties will have varying room sizes from 25 to 35 square metres and range in size from 78 to 204 rooms. Part of the development scheme will see the hotels individually sold off to hotel investors and/or operators.
Late last year the group built and sold the Surf Resort in Patong which was brokered by JLL to a Singapore-based owner/operator.
Other components of the project include a surf club, waterpark, and freestanding restaurants and retail.
An initial hotel has already obtained EIA approval and is currently for sale, with construction of other properties to be phased. The Beach Plaza is off-beach, behind the Kata Night Market and close to Club Med, Ozo and the Ibis.
For more details on the project click HERE.
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