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Phuket Business: a modern gold rush

Legacy Phuket Gazette

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Phuket Business: a modern gold rush | The Thaiger

PHUKET: As my latest trip to the UK continues, I was thinking “What can I get my dearest for Christmas this year?”

I’m not the biggest fan of shopping trips and love nothing more than having a fixed plan in place to minimize the whole experience.

Being Christmas, though, I thought I should give this a little more time and thought and really push the boat out.

Walking down the high street, it’s clear to see that the economy in the UK this year has hit hard times. Everywhere I look, I can see the endless “sale” signs in shop windows and there seems to be a lot fewer people pounding the streets looking for bargains than I can remember in past years.

Wearing my festive Santa’s hat, I thought I would treat my other half to a ring, necklace or bracelet this year. I walked into the first jewellers I came across to have a look at some of the items on offer. There were no signs in this shop window offering bargain sale prices and I nearly fell over when I asked the shop attendant to show me some of the gold rings he had displayed. If there has been one commodity that has not taken a big hit in recent times it’s gold.

In tough economic and financial times, gold has been seen as a safe haven for investors to acquire and wait until things look a little more prosperous.

This high demand has pushed the price of gold up to record levels recently and many believe that this will continue for the foreseeable future. In 1999, Gordon Brown sold off 400 tons of the UK Gold reserves at approximately US$256 and US$296 per ounce, for 2.3 billion pounds sterling. When gold reached US$1,500 per ounce, that same figure would have been worth 12.95bn pounds sterling, and how the UK could benefit from that amount now cannot be understated.

As with everything, hindsight is a wonderful thing and the continuing increase in the price of gold is nothing short of incredible.

With the continued worldwide economic woes, many experts foresee gold reaching US$2,000 per ounce, and all the signs point to this increase as there is certainly no quick fix to the economic problems many countries are currently facing.

Gold seems to have stabilized at around the US$1,600 to 1,700 per ounce level after a temporary drop, but as markets continue to be uncertain this could still provide an attractive investment opportunity over the next 12 months.

As many of the worldwide major currencies weaken, will there be many more places for investors to turn?

As always, a commodity such as Gold can be quite volatile so this is not something for the faint-hearted and should be held as part of a larger portfolio. This, however, means that the perfect Christmas gift is now a lot more expensive than it would have been several years ago.

Meanwhile, I’m sure it will all be worth it to see my beloved on Christmas day with a shining gold necklace waiting to be put around her neck. She’ll be delighted even if my bank account isn’t!

For more information, contact [email protected]

— Anthony Lyman



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Bangkok

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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