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Gulu opens up about RPM sale

Legacy Phuket Gazette



Gulu opens up about RPM sale | The Thaiger

PHUKET: The Royal Phuket Marina (RPM) is on the market.

The announcement of the ‘luxury lifestyle development’s impending sale comes as a surprise to many industry analysts, particularly as RPM Chairman Gulu Lalvani has often referred to the development as his legacy. Just last year, Mr Lalvani announced a 5 billion baht investment plan for the marina.

In an exclusive interview with the Phuket Gazette earlier this week, Mr Lalvani explained he was approached by a private equity investor at the beginning of January.

Taking a break from his high finance life in New York to enjoy a yachting vacation around the Andaman, the holiday-maker reportedly contacted Mr Lalvani to make him an offer.

“I said, ‘it’s not for sale’. I told him this is my personal hobby and so on,” Mr Lalvani said.

While Mr Lalvani refused to reveal the identity of the potential buyer, he said that his own research into the man and his company found considerable investments in the hospitality industry worldwide.

Mr Lalvani’s anonymous investor reportedly holds significant assets in mixed-use developments in the US, including in Florida’s entertainment capital Orlando, and similar developments in California.

“He kept following up and I kept telling him no,” Mr Lalvani said. “Then he sent two people from the US and appointed an architect, saying he would pay for the architect to put together a master-plan of what he wanted to do here.”

Beyond the opportunity to get a free master-plan from a major property investor, Mr Lalvani said he was impressed by the investor’s willingness to do whatever it took to convince him to take the deal.

“He said he would pay for the master-plan, ‘You have nothing to lose and if we can’t do a deal you can have it with pleasure,'” Mr Lalvani said. “Well, that sounded very good to me. By the middle of March, he had convinced me that he was very serious and the master-plan went ahead.”

RPM, located on the island’s east coast, has appointed JLL Hotels & Hospitality Group to handle the sale through an ‘expression of interest’ campaign.

That master-plan includes 2,700 hotel rooms, divided among several brand-name hotels, in low-rise structures arranged around a large water park, as well as an artificial beach and beach club. The plan also features time-share villas, tourist facilities and a conference center, spread across RPM’s almost 200 rai of land.

The plan is reminiscent of Mr Lalvani’s original vision for the marina complex, but with a significant difference in the market focus.

In 2002, Mr Lalvani was among a number of interested parties encouraging the Thai government to adjust its restrictive taxing structure that bulked foreign yachts with foreign carpets and levied a punitive 200 per cent plus tax on their import. With the changes in the excise and tax laws, the flow of new yachts arriving in Phuket’s waters jumped considerably and Mr Lalvani began building RPM.

The development was to take place over multiple phases, including a second marina basin, high-end condos and luxury villas. What exists as RPM today is just the first phase of that original plan.

The collapse in tourist arrivals following the 2004 tsunami and a series of international economic crises stalled development of further phases. It was not until just over a year ago, Mr Lalvani said, that he felt confident enough to announce his intention to bring in new investment to kick start further phase development.

However, in the years since the completion of the first phase of the marina, the demographic of visitors to the island has changed dramatically.

“I didn’t expect this demographic,” Mr Lalvani said. “I thought there would be more and more Europeans.” Mr Lalvani said his original vision for RPM was that it would be the cornerstone of a re-imagined Phuket that would become the ‘Monte Carlo of Asia.’

“I did genuinely think like that,” he said. “I discounted the Chinese economy progressing so fast. So there I was wrong. What is happening now is Europeans are still coming, but Asians are coming in greater numbers.”

Mr Lalvani experienced first hand the shift in tourism demographics, as an estimated 30,000 Asian tourists now use the marina each month as a jump off point for speedboat tours to Phang Nga Bay and Phi Phi. Good business, but definitely not the business he was expecting.

According to JLL’s ‘Information Memorandum’ on the RPM offering, which the company distributed to about 100 of its top property clients around the globe, 63 cities in 20 countries now have direct flights to Phuket. Nearly half of those flights originate from China.

“40 per cent of the world’s population lives within five hours of Phuket,” Mr Lalvani says. “It was direct flights that made the Chinese market. India will be next, if they get direct flights. Once they get going… This place hasn’t seen anything yet. The future of Phuket for tourism is incredible.”

The new investor’s master-plan focuses on the mid-range family market. The change in demographic emphasis will also bring the development in line with the Tourism Authority of Thailand’s latest shift in marketing position, from a value-for-money destination to a value-for-experience destination, purportedly driving tourist spend through longer stays and higher quality experiences.

JLL has set a ten-week window on the expression of interest, with an expectation of serious offers to be on the table before the end of September. But with an eager investor already on the hook, why did Mr Lalvani appoint JLL in the first place?

“We couldn’t agree a price. Obviously someone coming in wants to have the lowest [price], but the seller wants the highest – and I wasn’t wanting to sell it anyway,” Mr Lalvani said. “So, he came up with this idea: ‘Why don’t you put it on the market? I have to have the first refusal on the top bid. If I match it, I get it. If I don’t match it, go ahead.’ So, that’s the legal agreement that we signed.”

At this stage, however, Mr Lalvani has not yet made any commitment to sell RPM and says he would still be happy to continue to build his legacy in the years ahead. But the crux of the issue is, who will carry that legacy into the future?

“To be frank with you, my children, unfortunately, are not turned on by living in Phuket,” he said. “My son has a very successful business and is jet-setting around the world, my daughter is married in England and doesn’t want to move from there and Zoran [his youngest], I was hoping, would take over here, but he’s told me: ‘Don’t count on me, I want to live in Europe.’ That’s a bit of a disappointment.”

“For me [the offer] is timely. I’m 77. I don’t feel it but I see the potential. There are more boats here than ever before. And if there’s the best water park here, surrounded by all categories of hotel for whatever your budget, and the best marina and the best beach club, where else can you go?” Mr Lalvani asked.

“People go where their kids can be happy.”

— Simon J Hand

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Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

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30 dolphins greet visitors to Similan Islands

Greeley Pulitzer



30 dolphins greet visitors to Similan Islands | The Thaiger

Tourists were treated to the sight of a school of dolphins in the Similan Islands off the Phang Nga coast on Sunday.

Tour organisers said that around 30 dolphins swam close to the boat six or seven miles offshore, creating excitement for passengers. It was the first time dolphins had been seen in the vicinity since October 15.

The Similan Islands National Park director said they were bottlenose dolphins and were among several species now returning to the area following a five-year closure of the park for environmental rehabilitation. Food is again plentiful there for them, he said.

Tourists are forbidden to feed wildlife lest the free handouts alter the animals’ natural behaviour, and the park’s waters are also very sensitive to contamination from human disease and marine debris, according to the director.


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Phuket hotels slashing the price of rooms

The Thaiger



Phuket hotels slashing the price of rooms | The Thaiger

by Sophie Deviller

Hotels on Thailand’s most popular holiday island are being forced to slash prices, with rooms left vacant and beaches sparse as Thailand’s tourism chiefs struggle with a plunge in Chinese visitors caused by the US trade war and a stronger baht. Phuket was the most visited destination in the country last year, after Bangkok, and a good gauge of the state of its crucial travel industry.

Tourism accounts for 18% of Thailand’s gross domestic product and Chinese holidaymakers make up more than a quarter of total arrivals. But while 2.2 million people from the country visited in 2018, according to official figures, the numbers for January-September were down almost 20% year on year.

Claude de Crissey, the French Honorary Consul in Phuket and owner of about 40 rooms in the Patong Beach area, says Chinese tourists are usually present even during the current low season.

“That was not the case this year,” he said, adding he had to lower his prices by as much as 50%.

The problem is not only in Phuket, with hotels also struggling to fill rooms in the seaside resort of Pattaya on the mainland and on Koh Samui.

Trade tensions with the US have already made some Chinese reluctant to take holidays owing to uncertainty back home, while the Thai baht has risen about 10% against the yuan this year.

A boating disaster off Phuket’s coast that killed 47 Chinese holidaymakers in July 2018 also scared some off.

“We are worried,” said an industry insider, declining to be named due to the sensitivity of the topic in a country where tourism provides tens of thousands of jobs. Adding to the headache is the fact that more than 3,000 new hotel rooms are being constructed on the island, raising the question of who will fill them.

Phuket hotels slashing the price of rooms | News by The Thaiger

“In terms of business, it’s not good,” said Kongsak Khoopongsakorn, vice-president of the association of hotels in Thailand and director of Vijitt Resort.

“Because … we have more hotels, more rooms to sell, we have more restaurants, more coffee shops.”

Still, tourism authority chairman Yuthasak Supasorn said he remained “optimistic.”

“We should reach our goal of 39.8 million foreign visitors.”

However, that is only up from 38.2 million in 2018, much less than the jump seen from the previous year’s total of 35.6 million.

Counting on India

Now hoteliers and tour package operators are targeting visitors from elsewhere, particularly India, which experts see as a huge untapped market.

A rapid expansion of the middle class in India, increased direct flights and visa-free travel have prompted Thailand to revise forecasts upwards.

It now expects two million Indian tourists this year, after an increase of nearly 25% on-year in the first seven months. But for now, the lower arrivals is evident on the streets of Phuket.

“I’ve never seen anything as bad as what it is at the moment,” said Paul Scott from Australia, who said he has been coming to Thailand for 15 years.

He mainly blamed the stronger baht for the drop-off but also the fact that Thailand wasn’t the untouched vacation paradise it once was. “Now it’s not so new … and it’s not cheap,” he said.


Phuket hotels slashing the price of rooms | News by The Thaiger

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The 15th Mai Khao Marine Turtle fun run attracts more than 4,000 runners

The Thaiger



The 15th Mai Khao Marine Turtle fun run attracts more than 4,000 runners | The Thaiger

4,000 runners from Thailand and overseas took part in the 15th Mai Khao Marine Turtle Fun Run and Half Marathon 2019 yesterday, starting from the Phuket Gateway.

The event is expected to raise 700,000 baht for the charity, now in its 15th year. The money raised goes towards to The Mai Khao Marine Turtle Foundation, which is committed to protecting the marine and coastal environment, and ecosystems, for the wellbeing of sea turtles that nest in the Mai Khao beach and the surrounding areas.

The annual race also provides funds for thePhuket Marine Biological Centre’s Injured Turtle Rehabilitation Program and The Third NavalArea Command’s Turtle Hatchery Program.

The race was in its 15th year and runners of all ages and abilities took part in the race. The morning’s racing was divided into five categories – the 21.1km half marathon, 10.5km mini- marathon, 5km fun run and 3k family run and VIP participants for all the races. The route of 21.1 kilometre race took runners northwest along the Haad Sai Kaew beach towards Thao Thepkasattri bridge, past the rural road No. 3006, run along the road – Pi Lai viewpoint area returned back along the T. Baan Tha Nun to the iconic Sarasin bridge before finished the half marathon in the Phuket Gateway.

For Mini Marathon 10.5 km – Over all category, Mr. Chinnawat Changlek clocked 39 minutes and 40 seconds to clinch victory in the male half marathon, winning prize money and a trophy with the signature of Phuket’s Governor. The winner in the female mini marathon was Surakarn Wanna with a time of 47 minutes and 47 seconds.

Winners also received a prize gift voucher as well as a medal. Congratulations to all participants.

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