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Investors see opportunity in Pattaya hotel market

Caitlin Ashworth

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Investors see opportunity in Pattaya hotel market | The Thaiger
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Although travel restrictions are still tight, investors see potential opportunities in Pattaya’s hotel market. Many are reimagining the 2021 market by focusing on domestic demand.

Property consultancy JLL says the ongoing Eastern Economic Corridor development comes into play. U-Tapao International Airport in Rayong expanding to increase capacity by 5 million passengers and a high speed rail is in the works to connect U-Tapao and the Bangkok airports Suvarnabhumi and Don Mueang.

The amount of investors interested in Pattaya hotels is at an “unprecedented” level, according to JLL’s Asia Hotels and Hospitality Group executive vice president of Investment sales, Chakkrit Chakrabandhu Na Ayudhya.

“In recent months, we have been getting an unprecedented level of enquiries from investors who are looking for opportunities to acquire investment-grade hotels in Pattaya. We have yet to see a wide trend of deeply discounted hotels in the market, particularly institutional-grade assets. However, the situation is delicate, and the landscape could potentially shift swiftly.”

Pattaya’s hotel inventory is ranked second in Thailand, following Bangkok. The city is slightly ahead of Phuket. Phuket has been in what many have deemed a “crisis” from the lack of international tourists over the past 7 months. Pattaya has been also been hit by the lockdown and travel restrictions., but due to the Pattaya’s proximity to Bangkok, the city has been able to attract domestic tourists during weekends and holidays. More domestic investors are also interested in Pattaya hotels.

“Due to border restrictions, we are naturally seeing more engagement from domestic investors compared to what we saw in almost 40 hospitality deals (over 40 billion baht in volume) that we brokered in Thailand since 2010. We also see more enquiries from corporates with diverse income streams and private equity funds since the pandemic started.”

SOURCE: TTR Weekly

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14 Comments

14 Comments

  1. Avatar

    Toby Andrews

    November 9, 2020 at 11:15 am

    Yes Bankrupt sales are cheap.
    Perhaps they could sell the hotel rooms off as condos, or gut the hotels and put in chicken battery cages in – make a fortune.
    The inside rooms could be used to grow mushrooms . . .

  2. Avatar

    Mark Strevett

    November 9, 2020 at 5:58 pm

    What is the betting that a lot of bankrupt hotels will be bought by the Chinese?

    • Avatar

      Patrick Wahle

      November 9, 2020 at 7:44 pm

      You mean Chinese-Thais ?

      • Avatar

        Khun plastic

        November 10, 2020 at 6:44 am

        thai chinese own most businesses of any concequnce in thailand anyway as they have done for many many years.
        If you talk to any well educated thai about this subject they will probably give you an answer along the lines of “if the people from the middle Kingdom had not come here we would all be still sat on the beach pointing at the moon with our mouths open still”.
        have heard numerous variations of this
        in semijest form from hiso ish thais over the years.

    • Avatar

      Robert Elliot

      November 9, 2020 at 10:07 pm

      No Need to bet. Its a certainty.

  3. Avatar

    Fabian

    November 9, 2020 at 8:08 pm

    The mice cried, pricked with needles, but continued to eat the cactus.

  4. Avatar

    sam thompson

    November 9, 2020 at 11:17 pm

    And if you believe this advert, you also might like to know that they have removed the word gullible from the English dictionary

  5. Avatar

    Khun plastic

    November 10, 2020 at 6:24 am

    These people make english estate agents look like honest hard working people of the highest integrity!

  6. Avatar

    7.62mm of darwin

    November 11, 2020 at 1:50 pm

    Buying any property in Thailand or the Phillipines is like throwing your money out the window. Your chances of ever recovering it is slim at the best. When you attempt to sell it on you will find a very small market getting smaller by he day. My friend has 3 condos and cannot even visit them and to sell them it is almost impossible, what is worse is I cannot rent then because I cannot even leave Australia, and what is there now if I manage to get to Thailand. Its finished

    • Avatar

      Khun plastic

      November 12, 2020 at 6:28 pm

      Was the same deal in Spain also, constant new launches, property steadily increasing in value on paper until you come to sell,then no buyer’s.

      Who would when you can buy a new property in the same area for the same sort of money.

      To this day I’m unsure if the Thai and Spanish property markets are pyramid selling schemes or if its just down to over development.

      More cynical local thai friend assures me both are simply large scale money laundering scheme’s!

  7. Avatar

    Kim Armitage

    November 12, 2020 at 2:54 pm

    What good is a hotel with no tourists. The longer the fourteen day quarantine is compulsory the more likely people will find somewhere else with smiley faces.

  8. Avatar

    Leo Z

    November 13, 2020 at 9:06 pm

    The pesky problem is that the domestic tourism’s budget is 1500-2000 baht/day. It’s the same problem the Chinese have encountered with the “increased domestic consumption” slogan, you ain’t getting money from people who don’t have it.

  9. Avatar

    Khun plastic

    November 14, 2020 at 1:49 pm

    So perhaps the number one no good cheep charlie’s were not so bad after all.

    • Avatar

      7.62mm of darwin

      November 18, 2020 at 4:47 am

      Let us take the official line of filthy farangs…..who wants to front up for that, if I wanted scorn I would visit Malaysia where I am Haram meaning unclean. I think I will follow royal example and try Germany when I can.

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Caitlin Ashworth is a writer from the United States who has lived in Thailand since 2018. She graduated from the University of South Florida St. Petersburg with a bachelor’s degree in journalism and media studies in 2016. She was a reporter for the Daily Hampshire Gazette In Massachusetts. She also interned at the Richmond Times-Dispatch in Virginia and Sarasota Herald-Tribune in Florida.

Thailand

Finance Minister says Thailand’s GDP will take 2 years to recover

The Thaiger

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Finance Minister says Thailand’s GDP will take 2 years to recover | The Thaiger

Thailand’s finance minister says the countrys GDP will take 2 years to recover the 9% it has lost since the Covid pandemic ravaged the economy. Arkhom Termpittayapaisith, the Finance Minister, says the economy would have expanded by 3% this year if it weren’t for the pandemic.

“The pandemic crisis will make the economy contract by around 6% in 2020, therefore there is a 9% gap that needs to be recuperated. If Thailand’s GDP growth could arrive at 4% in 2021 and 2022, this would propel the country’s economic growth momentum to return to a normal ratio.”

The National Economic and Social Development says Thailand’s GDP contracted by 6.4% year-on-year in the 3rd quarter, with a yearly economic contraction projected to be 6%. Previously, it was predicted to contract by 7.5%, however, since the global economy is projected to contract by 3.5% and the global trade is expected to decline by 11%, the number has been updated.

The seasonal adjustment saw the economy expand by 6.5% quarter on quarter from the 2nd quarter, with it contracting by 6.7% in the first 9 months. However, the NESDC’s projection doesn’t account for the impact from political conflicts or a 2nd wave of outbreaks.

Such political conflicts as the protests against the monarchy have seen some authorities, such as the Chief ASEAN economist, saying it won’t help Thailand’s weak economic recovery. But Krisada says the Thai economy is expected to recover gradually, with a possibility of vaccine use and the global economic recovery helping to push forward the recovery next year.

Arkhom says the government reportedly has 30% fiscal space left in its 2021 budget, to help cushion the economic crisis. That percentage is about 980 billion baht worth of capital, which excludes the remaining sum of the 1 trillion baht loan decree.

As for the 2022 budget, he says it is still being designed to support economic growth through public investments in infrastructure and energy, with some projects relying more heavily on help from the private sector.

SOURCE: Bangkok Post

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Business

Bank of Thailand takes action to curb Thai baht’s strength

The Thaiger

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Bank of Thailand takes action to curb Thai baht’s strength | The Thaiger

The Bank of Thailand has moved forward measures, originally meant to begin early 2021, but most of which will now take effect from end of this month. The end result is that the new rules will make it easier for Thais to shuffle money overseas and invest in foreign assets. It will also make is easier for Thai citizens to hold foreign currency in local banks. The new rules will also require the registration of local and overseas bond investors.

“Following the U.S. elections and positive news on Covid-19 vaccine development, investors have turned toward investing in emerging markets, including Thailand. The situation has resulted in strengthening the baht quickly and can impact economic recovery.”

“The registration of bond investors will allow close monitoring of investor’s behaviours and thereby enable the implementation of targeted measures in a timely manner.”

Last week the Bank of Thailand assessed that the Thai baht’s recent rapid gains could affect the country’s “fragile” economic recovery. The Thai government has called on the central bank to do its best to use what tools it has at its disposal to restrain the baht to protect exports.

Khoon Goh, head of Asia research at ANZ Banking Group, says that he central bank also will continue to resort to direct intervention in foreign-exchange markets.

“The issue here is that local investors have a very strong home bias. Making it easier to invest overseas may not actually encourage them to do so.”

The Thai baht has been the 2nd best performer in Asia this month after foreign investors turned net buyers of almost $2.4 billion of bonds and stocks as appetite returns for riskier emerging-market assets amid a weak dollar, according to Bloomberg.

The Thai baht had recently rallied 8.8% from this year’s low in April, hitting a 10 month high last week.

SOURCE: Bloomberg

This morning, Thai time…

Bank of Thailand takes action to curb Thai baht's strength | News by The Thaiger

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Economy

Chief ASEAN economist says protests not helping Thailand’s weak economy recover

The Thaiger

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Chief ASEAN economist says protests not helping Thailand’s weak economy recover | The Thaiger

Chief ASEAN economist of Nomura, Euben Paracuelles, says Thailand’s current protests are not helping Thailand’s weak economy recover. In fact, Pracuelles says Thailand’s economy is the weakest and slowest in the region, noting that it is in “pretty bad shape”. He further says that the last thing the kingdom needs is something to weaken its recovery and that the current demonstrations are doing just that.

“We know that it is very reliant on tourism and that sector has been decimated by the Covid-19 shock.”

“What we have seen in these kinds of political episodes in the past is, it’s a very big distraction for the government to actually execute on these fiscal plans.”

He added that the government’s plans to disburse cash handouts have fallen short of initial expectations at a time when Thailand needs “private consumption to stay afloat, to at least provide some buffer” for the economy.

Nomura is also predicting that the Bank of Thailand will cut its policy rates down to 0% from .5% in the near future to help aid the delicate economy.

Such political instability certainly hasn’t helped in recent months as last week’s rallies saw the government firing water cannons and tear gasafter protesters targeted the Royal Thai Police headquarters. Such a scene caught international attention, prompting the Human Rights Watch to issue a letter in response that clearly condemned such actions by the government. Despite the government taking, what some say, was a heavy-handed action against the generally peaceful protesters, minor demonstrators are vowing to keep participating despite police summoning 2 teenagers for violating the emergency decree.

The PM has also announced that the lese majeste law which prohibits anyone inside the kingdom from criticising the royal family, may be enforced after remaining dormant for more than 2 years. HM the King asked the PM to limit the use of the lese majeste laws in June this year.

SOURCE: Chiang Rai Times

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