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The future of Bangkok’s Chinatown

Bill Barnett

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The future of Bangkok’s Chinatown | The Thaiger

by Bill Barnett of c9hotelworks.com (First appeared on linkedin.com)

The emergence of boutique hotels, hostels, hip bars and cafes has revolutionised the way Chinatown, Bangkok is seen. This, together with the entry of international branded operators setting the stage for exciting changes.

Overview of Chinatown

For over 200 years, Yaowarat Road in Bangkok or Chinatown has been a center of Chinese immigrants in Thailand. Although some newer development has taken away some of Chinatown’s authenticity, it is still to this day one of Bangkok’s most visited areas which hasgenerated a splendid mixture of the old and new, be it street-food vendors, temples, or art galleries. On top of that, what really draws both local and foreign demand to the area is the ultimate experience itself.

Jammed streets with full tuk-tuks, small vans, and street merchants are what the other areas cannot offer. With some buildings and land is left unused, there have been many redevelopment projects for hotels and residences, and now domestic and international hotel chains are entering the market. What follows, is meant to shed light on the transformation of Chinatown.

Tourism

With the combined number of passenger arrivals at Suvarnabhumi and Don Mueang International Airports close to 50 million in 2017, the gateway experienced a 5-year compound annual growth rate (CAGR) of 11%. Based on our research and market interviews with hotels in the area, the number of tourists visiting Chinatown has sharply increased over the past few years. Thus, hoteliers in the area foresee that Chinatown will be reinvented over the next five years

Chinatown is now one of the hippest areas in Bangkok, while a few short years ago Millennials would view Chinatown as an ‘ancestor’s area’ where elders meet up and have their Asian breakfast. Similarly, the traditional food scene still exists, except that the average age of visitors has dropped substantially and visitors now are becoming bar or café hoppers. What changed is how the vibe shifted over a short period of time.

The future of Bangkok's Chinatown | News by The Thaiger

Mass Transit

After five years of construction, the upcoming MRT station of Wat Mangkon is now close to completion. Scheduled to open to the public in mid-2019, this station will be the nearest mass transit connection to Chinatown and sits right across from the upcoming 224-key Holiday Inn Express Bangkok Chinatown.

The station’s name originated from the largest Chinese Buddhist temple in Bangkok, Wat Mangkon Kamalawat. Regardless of how trendy Chinatown is, the area is not expected to be another Thonglor as there is no plan for a BTS station. It will be advantageous to have better access to public transportation, but the MRT does not carry the same clout as the BTS since many tourists are not familiar with the MRT.

Hotel Performance

Due to the location of Chinatown, budget hotels face challenges in competing with similar hotels in other parts of Bangkok such as Sukhumvit. Boutique hotels in the area are on an upward trajectory, yet accessibility to public transportation in the area remains a key factor.

The average daily rate (ADR) of boutique hotels in Chinatown ranges from 2,000 up to 6,000 baht, with occupancy averaging over 75%. Due to the constraints on development scale, hotel inventories for the existing hotels range from a handful up to 70 or 80 rooms. Given a captive guest base, revenue from food and beverage cannot be overlooked. Hotel operators are generally more focused on generatingother income for their properties compared to other areas in Bangkok. According to our research, some hotels’ F&B contribution can reach 70%, while the market-wide average is 31%.

Demand Characteristics

Online travel agents (OTAs) play an important role in this market among all distribution channels as boutique hotels mainly target younger guests who search for more authentic locations. Some boutique hotels try to stimulate direct bookings by offering complimentary breakfast and discounts on F&B and spa packages. One of the best performers in the market is able to achieve 70% for direct bookings.

In general, OTAs account for 75% bookings on a broad basis. For the nationality mix, the Asian market accounts for 38%, followed by European and American markets with 34% and 29%, respectively. The purpose of stay is mostly leisure at 93%, and only 4% of guests come for business.

Land vs. Rental Prices

With a peak land price of 375,000 baht per square metre, Chinatown is one of the most expensive areas in Thailand. Such high land prices result from the limited land supply and the vintage-style buildings. It is important to highlight the inverse correlation between land prices and rental/lease rate in Chinatown. Rental prices vary but generally tend to be in the range of 300 baht per square metre per month, while they can be well over 1,000 baht per square metre in Bangkok’s CBD areas. With a business model heavily reliant on leasing property, small boutique hotel and hostel supply isexpected to surge in Chinatown.

The future of Bangkok's Chinatown | News by The Thaiger

International vs. Domestic Chain Offerings

There has not been an international hotel brand in Chinatown until recently, with the InterContinental Hotels Group (IHG) poised to enter. The agreement between IHG and Uniland Company Limited to open a Holiday Inn Express is expected to be completed bythe end of this year. On the other hand, the notable Thailand-based Burasari Group, who own and manage Shanghai Mansion Bangkok, has signed an agreement to manage a new 128-key property in Chinatown early this year, marking itself as a leading operator in the area.

Burasari Group, with seven hotels in the portfolio domestically and internationally, is expanding its hotel network within the country. The group has been managing Shanghai Mansion for almost 10 years and believes the upcoming changes in the area will elevate guest experience and draw more demand to Chinatown.

Pipeline Projects

Holiday Inn Express Bangkok Chinatown is part of the THB3-billion ’I’m Chinatown’ mixed-use project. Positioned as ‘Modern Chinese’ in terms of design, the project includes 5,000 square meters of retail space, a 224-key hotel and 46-unit residence for sale. With its strategic location situating across the upcoming mass transit station, the hotel will mainly target foreign tourists and business travelers. The property is expected a year-round occupancy over 80% with average room rate over 2,000 baht.

Another project in the Chinatown pipeline, which will be managed by Burasari Group, is the redevelopment of a 50 year old vacant hotel. With 128 keys, W22 will be situated on Wongwian 22 with an opening in the mid of this year. Positioned as a boutique budget hotel, it is targeting Asian travelers and tour groups. The hotel will offer multiple room types including dormitories, double, twin and family rooms with an average room rate of 1,000 baht projected.

The two projects will create a new dynamic. Firstly the HIEX will provide standardised accommodations with expected amenities such as a swimming pool, which only a handful of hotels in the area have. Secondly, the W22 hotel will not only offer an affordable stay but also a varietyof room types and a large common space for guests to relax.

The future of Bangkok's Chinatown | News by The Thaiger

PHOTO: shanghaimansions.com

Forward Outlook

Because of the continuously increasing number of cafes, bars, and restaurants, further hotel development is expected to highlight the importance of design. Although cultural experience hasbeen the whole point of coming to Chinatown, the ‘chic’ experience will be a secondary factor to generate demand. From the recent developments and upcoming hotels, all properties have their uniqueness in design no matter in common areas or F&B outlets.

Even the 10 year old Shanghai Mansion Bangkok has been able to maintain high performance due to its unique interior design. Looking across Bangkok’s luxury Riverside projects, such as Four Seasons and Capella which will come into the market soon, it is clear that luxury hotels have come out of the Bangkok Central Business District. With mass transit and proximity to the river, there is a high possibility to see more upscale development coming up in Chinatown.

In the bigger picture, the new MRT station will be a key turning point for the area and its future potential remains unique in its offering.



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Bill Barnett has over 30 years of experience in the Asian hospitality and property markets. He is considered to be a leading authority on real estate trends across Asia, and has sat at almost every seat around the hospitality and real estate table. Bill promotes industry insight through regular conference speaking engagements and is continually gathering market intelligence. Over the past few years he has released four books on Asian property topics.

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Phang Nga

Phuket’s hotel and property players look north

Bill Barnett

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Phuket’s hotel and property players look north | The Thaiger

by Bill Barnett of c9hotelworks.com

One of Greater Phuket’s real estate and hotel market’s that has a decided buzz of late is the area up over the Sarasin bridge in Phang Nga.

In Natai, the entry of the Baba Beach Club and nearby Akyra is creating renewed visibility for the broad West Coast stretch of white sand beach.

Two upscale hotels are in the development phase in the vicinity, with one being flagged to an international hotel operator.

Up at the 1,000 plus rai Thai Muang mega-project, movement is once again underway, as is a nearby massive Japanese-led mixed-use project including a golf course.

Land values are currently running amuck in the Koh Kloi area where the AOT (Airports of Thailand) has reportedly acquired land for an upcoming Phang Nga airport which will provide Phuket with a second gateway alternative.

Premium land transactions are taking place, with the most notable being the recent trade of the former oceanfront site in Bodan that was to be at various stages first a Raffles and later a Ritz-Carlton Reserve.

Looking at Phuket’s light-rail initiative, one knock-on effect will be the eventual linkage between the island and larger connection to a broader rail terminus in Koh Kloi. This will likely spur real estate speculators to acquire peripheral locations.

As Phang Nga’s West Coast four land highway expansion moves forward to Khao Lak and beyond, Phuket’s Northern neighbor is seeing a renewed push in its tourism, property and infrastructure.

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Property

Cleaning the concrete and paving in Thailand

The Thaiger

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Cleaning the concrete and paving in Thailand | The Thaiger

With the wet season comes the rain. And with the rain, plus the ongoing hot weather, mould and algae growing on all our outdoor walls and paving.

Rain + algae + mould looks awful and can be very slippery. Stains can also make your investment look old and unwanted. Black mould can cause allergies for some people

You have two choices. Maintain them yourself or get someone in to do it for you. If you would like to save a few baht and do it yourself here are a few proven methods.

Before you even start a few warnings. Don’t use any of these cleaning methods on a large area before you’re completely sure it’s going to work. Try out your chosen method on a small area first to check that it won’t harm the surface and that it actually does the cleaning you expect.

Also, ask around. Many houses in Thailand have concrete, aggregate, paving and tiling outside so we all have the same problems. See what’s worked with others around your area. Also be aware some of the chemicals can be dangerous for you and for the environment. There’s plenty of alternatives these days that are safe and effective.

Whilst there is no magic solution, keeping up regular maintenance is your best answer. Doing a quick, regular clean is going to be a lot easier than, say, an annual clean where it just becomes a lot of hard work, or expense. And messy.

Before you do anything else move all the furniture away, clear the area and make sure any weeds are removed before starting.

Bleach
Beach will remove stains from practically anything. Since pavers and aggregate surfaces are mostly made of concrete, bleach can be a good way to remove stains, black mould and algae from them, if used correctly.

Diluting the bleach is extremely important if you want to protect the color of your patio or driveway. Mix half a cup of bleach with around 5 cups of water, and add a spoonful of dish-washing liquid to it. Bleach is quite dangerous and shouldn’t get in contact with your skin. Wear gloves. It’s also generally toxic for plants so don’t use it around lawns or garden beds.

Spray this using a spray bottle on the surface and let it soak in for 15-20 minutes depending upon how dirty the surface is. A little bit longer for stubborn stains and really long-term build ups of mould.

Scrub the pavers with a brush that has nylon or natural bristles. Rinse off the solution with water – high-pressure water cleaner will add some muscle to the chemical reaction. Let your pavers dry in the heat.

Chlorine
Yeah, the stuff they put into your swimming pool to keep it free of nasty bacteria and the water clean. Chlorine can also be used to clean your patio or driveway, especially the black mould, moss and algae.

Mix chlorine and water (10% chlorine, 90% water) in a spray bottle. Spray the mixture on the paving thoroughly and evenly, and let it soak in for 10-30 minutes minutes. Follow up with scrubbing the pavers to remove any excess dirt or particularly stubborn stained areas. like with the bleach, use gloves and protect your skin from coming into contact with the chlorine. Also make sure that you’ve got good ventilation around the area (your very probably outside anyway).

Chlorine is toxic for you and your plants. If it splashes on your clothes you’ll most likely get bleached splotches so don’t wear your latest Armani purchase whilst using chlorine (same with the full-strength bleach).

Vinegar (acetic acid)
It stinks but vinegar is one of the best choices you could make to clean your concrete pavers and paving. It’s non-toxic and a better alternative around pets and kids.

Spray full-strength vinegar using a spray bottle on the affected parts of the patio or driveway. Let the vinegar soak in completely – say a good 60 minutes or so. Then spray the paving with a mixture of soap and water and scrub with a brush to remove any dirt that may have been overlooked by the vinegar.

Better to use white vinegar as it doesn’t stain.

Soap and Water
This simple combination of soap and water is a safe, reliable combination but needs a little ‘elbow grease’ or mechanical assistance to get the same results.

Start off with a high-pressure washer. Use this first to remove the worst of the stains, mould and algae. Then apply the detergent and water and scrub the rest by hand. Doing this removes the rest of the grunge and goo. These magic machines will blast off just about any mould, mildew or moss. WARNING: Don’t put your hands or anybody else close to the high-pressure stream of water and air!

With high pressure cleaners, at this stage, we haven’t found any places where you can rent these units for an afternoon. But, if you’re going to be doing regular cleaning yourself the investment is quite reasonable – you can pick up a fairly good one for 5,000 baht. They’re always on display near the front of most Home Pro or Thai Watsadu stores. Better still, ask the neighbour if you can borrow theres and buy them a nice bottle of wine as a thank you 🙂

Cleaning the concrete and paving in Thailand | News by The Thaiger

A few other things
For fresh oil or grease stains use baking soda and apply it to the stains. Leave it for a good hour. Remove the baking soda then apply again of the oil or grease stains are bad.

There’s nothing better than regular cleaning. Even if you just regularly sweep the pavers, or spray them with water, it will help prevent the spores settling and starting to grow.

Once all bright and shiny consider using a paving sealer. They are readily available, easy to apply and make the cleaning a lot easier as the spores, grunge and dirt won’t sink into the porous paving surface.

Try one, try all methods. Tell us which works best or any other methods you’ve tried with success or the ones that have been a complete failure.

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Property

Centara strikes deal for three new hotels in Laos

The Thaiger

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Centara strikes deal for three new hotels in Laos | The Thaiger

Thailand’s leading hotel operator Centara Hotels, announced it has signed management agreements for three new properties with a combined total of 216 keys, with Asia Investment, Development & Construction Sole Co., Ltd (AIDC), a well-established enterprise in Laos.  In the UNESCO World Heritage site of Luang Prabang, Centara plans to open an upper upscale Centara Grand Luang Prabang and a midscale Centra by Centara property, both near the town centre. The third property will be under Centara’s new lifestyle brand, COSI, catering to the growing segment of connected, freedom-loving travellers. It will represent a unique offering in Vientiane, the Laotian capital.

The management agreement comes as Laos launches ambitious new plans to promote tourism. In recent years, the government of the Lao PDR has come to regard tourism as a priority sector for driving socio-economic development. It hopes to attract 5 million visitors in 2018 and increasing numbers in the years ahead with a Visit Laos campaign under the slogan “Simply Beautiful.”

According to a new report from the Swiss-based World Economic Forum, Laos ranks 14th among 136 countries in price competitiveness.

“This partnership with AIDC is a great opportunity to expand our footprint into a distinctive country,” said Centara CEO Thirayuth Chirathivat.

“Laos is on the list of more and more travellers to this region, and we want to serve them with the distinct and varied accommodation options to match the travel experience they are seeking.”

Luang Prabang is the well-preserved, old spiritual city at the confluence of the Khan and Mekong rivers. Although well-served by direct flights to its airport and modern amenities, it lives up to its World Heritage status with beautiful temples and traditional riverside life. Bicycles outnumber cars. Delicious baguettes, croissants, cafés and French restaurants hint at the French colonial history in both Luang Prabang and Vientiane.

Pheutsapha Phoummasak, President of AIDC Laos said “We are excited to partner with Centara to bring their trusted brands to these great cities and further promote the tourism potential of Laos. Luang Prabang and Vientiane are very popular destinations for both Thai and international travellers thanks to their perfect blend of history, beautiful scenery and charming character”

The three new hotels are the latest evidence of Centara’s expansion strategy, which calls for doubling the number of properties under its management during the next five years. This latest development will see Centara’s hotel count in Laos reach four with Centara Plumeria Resort Pakse already well under development and scheduled to open in 2020.

Centara strikes deal for three new hotels in Laos | News by The Thaiger

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