Time for a Chiang Mai overhaul?

[FolkGuitar]

The sad news today was that billions of Baht have been lost due to poor tourism numbers.

The horrific news for the past several months has been tourist venues (i.e. restaurants, guest houses, hotels, resorts, entertainment, etc.,) have all be closing down.

The anguished cries of local folks who are no longer making a living because the tourists aren't here, and won't be. Simply no income!

Even the expats are crying about the Thai loss of income.

Perhaps it's time to stop crying, bitching, and moaning, and do something about it.

Obviously, we can't fix the tourism problem. But the 'real' problem is that Chiang Mai has always relied almost totally upon tourists for its income.

Perhaps that needs to change. Other major cities in Thailand never had the tourist draw that Chiang Mai and Bangkok have. Yet these other major cities are still up and running, not feeling (in the extreme ) the loss of tourist dollars.

Perhaps now would be a good time for Chiang Mai to look for other revenue streams. Forget Tourism. That looks like a dead horse, even if some Chinese come back. We won't see Europeans, Americans, or other Asians for possibly years.

What keeps Phitsanulok financially sound?  What allows the locals in Udon Thani or Nakhon Ratchasima to continue to make a living despite no tourism.

Perhaps it's time to rethink the revenue production for Chiang Mai. Coming up with a plan is certainly better than sitting around bemoaning the loss of tourist dollars.

I don't have a horse in this race, so I don't have a plan how to run it. But it's in the Thai best interest to come up with something pretty damn quick!

[blackcab]

One of the key drivers is rent or lease costs. Until these are reduced dramatically then your average Thai business will not be able to afford to be located in buildings formerly used for tourism relared businesses.

 

Lease costs are often a reflection of land costs.

 

In the short term i don't expect the asking price for land to reduce, so either the landlords have to take a large drop in rent prices or not much will change.

[EricTh]

@FolkGuitar

You forget that a lot of people in Chiang Mai aren't residents, they came from neighboring provinces and some even come as far as Isaan.

 

That's because CM is a gold-mine with its tourists.

 

The lesser known towns 'can survive' in normal times because their residents went to CM and Bangkok to earn money. So they are also affected.

 

I have seen my Isaan eatery owner in CM closing their shop and going back to Isaan. I have seen one Lao worker in another eatery going back to Laos because business was bad and the owner decided to let go some staff.

 

Tourists don't go to small towns, it is the Thai residents from small towns who go to large towns for work.

Edited October 11, 2020 by EricTh

[FolkGuitar]

36 minutes ago, EricTh said:

@FolkGuitar

You forget that a lot of people in Chiang Mai aren't residents, they came from neighboring provinces and some even come as far as Isaan.

..................................................

The lesser known towns 'can survive' in normal times because their residents went to CM and Bangkok to earn money.

 

 

While you are correct that people often do leave small towns, moving to 'The Big City' to look for work, they represent a very small percentage of the population. Most do not leave, even from 'small' towns. Fewer still leave from large cities.

Thailand has plenty of large cities that have not been as decimated by the loss of tourists as Chiang Mai.

What are the people in those large cities doing for work? What are the revenue streams in those places?

THAT is what Chiang Mai needs to explore.

[BritManToo]

On 10/11/2020 at 10:37 AM, blackcab said:

One of the key drivers is rent or lease costs. Until these are reduced dramatically then your average Thai business will not be able to afford to be located in buildings formerly used for tourism relared businesses.

 

A horse riding business close to me pays 5k/month for his premises (house and fields).

He hasn't had any income for 6 months but still needs to feed and exercise his 15 horses.

Staff are long gone.

At the moment he's deciding between selling the horses for their meat, or just letting them go in the forest.

Whatever choice he makes the outlook for the horses is bleak.

 

There's a similar problem with elephants in Chiang Mai.

 

[holy cow cm]

Buildings building everywhere and no tourists to support that over building. CM has always been a tourist place for the last 30 years. But what got it in trouble here was the over building for the avalanche of Chinese tourists. If CM reversed back to say about 20 years ago how it was then it would be fully sustainable. Not sure how hard hit the people are here now as now you do not see any food lines or food boxes anywhere. CM is now based on being a college town with semi domestic tourism coming in. CM will be ok, but not the ones who invested and are totally dependent on tourism if they cannot ride the wave out for a year or so more. Lucky for me I have no stake in the game and for everything I have am at zero owing nothing. Maybe time to buy something and from that it will help out a bit. I would not go near purchasing a condo. those richies can eat their greed, but I am open to land or even a property in a district that could make a business out of.

[beau thai]

I fear the OP is correct that we will wait a long time for CM to return to being a vibrant tourist hub, and meantime, there is not enough local income generated to support the number of local business.

So we need to plan to export whatever, to wherever - including other parts of Thailand.

Longer term, to avoid CM being a one trick pony and caught in the next tourist lockdown, maybe Uni's should focus more on technology,  to skill young people to develop a 'smart city' rep.

Currently I dont see any signs of significant technology 'manufacturing' businesses here. Maybe they are here but out of sight. Perhaps designating a Technology Park/Silicon Valley area with grants to attract start ups is worth trialling.

[jackdd]

It will just take way longer than a few months until everybody in the chain is affected.

1. A place which relies on tourists shuts down

2. The landlord doesn't have rental income

3. The property might be financed, he can't pay the bank

4. The bank claims the property and tries to auction it

5. Nobody buys it, so they will try to sell it for years

6. After a few years they realize that their asking price is too high and the property bubble might bust.

 

Then there are also places which were frequented by people who worked at places which relied on tourists. Because their customers don't have jobs anymore, they stay away, causing a similar chain of events as mentioned above, just with a few months delay.

Also don't forget that this was just the low season until now, people still had savings from the last high season and might be able to survive this low season. But now their savings are used up, and it doesn't look like there will be many tourists in this year's high season.

The real downfall comes next year, or in the following years, currently this is just the beginning.

Edited October 11, 2020 by jackdd

[trevoromgh]

I've not been in Chiang Mai that long but I get the impression that the residents, like the Thai people themselves, are very resilient and will adapt to the circumstances. 

The good thing I've noticed is the infrastructure planning for the city seems very good with the ring road system with flyovers and underpasses and there seems an abundance of land available.  The new road between Lamphun and Chiang Mai provides immense capacity for industrial and manufacturing companies along the way with scope for new residential villages as well.  From what I've seen already the reliance on the tourism industry was starting to change before the pandemic came along and this will just cause the switch to happen earlier than expected.

[connda]

Some local kids in our village are at Rajabhat University majoring in tourism.  I feel sorry for them as they graduate next year.

[BritManToo]

16 minutes ago, connda said:

Some local kids in our village are at Rajabhat University majoring in tourism.  I feel sorry for them as they graduate next year.

Mine is doing International Business Studies .... currently negotiating for a 25-30k starting wage from a foreign company in CM for when she finishes in less than a year.

 

I'm OK with her staying on with me if she can't get a job, it'll be a relief when the university fees and expenses stop though.

Edited October 11, 2020 by BritManToo

[deej]

My reply to the O/P.

In my tenure  as  a retired Cmai Alien, for 2 decades, why, all the crying from  you? I,have Never seen life brighter  here in Cmai, as a retired  O Visa alien.

.

Edited October 11, 2020 by deej

[FolkGuitar]

56 minutes ago, deej said:

My reply to the O/P.

In my tenure  as  a retired Cmai Alien, for 2 decades, why, all the crying from  you? I,have Never seen life brighter  here in Cmai, as a retired  O Visa alien.

.

 

Sorry to say that your reading skills haven't improved...  Nor your selfish view of life in Chiang Mai.

Of course most retired expats living here have incomes not connected with Tourism, and so are not feeling the crunch the way the local folk are, except perhaps that your favorite bar is closed and favored bar girl has moved on.

Try looking at life here the way so many Thais are forced to do these days. So many of them are still standing in food lines, or waiting in front of Wats for a chance at day labor.

 

There was no crying.  Like you, I have nothing to cry about.  My income is secure. 

I was suggesting that Chiang Mai needs to stop bemoaning the lack of tourists and begin planning for different revenue streams. Relying upon nothing but tourism got Chiang Mai into the fix that its in right now.  Diversification is the key to success in any financial crisis, and this is the path Chiang Mai needs to follow. It's time to stop complaining about the lack of tourists and start planning  how to attract new industries, new technologies, etc., diversified revenue streams that won't collapse the economy if one of them fails.

Edited October 11, 2020 by FolkGuitar

[deej]

^^^^ CMai present  dire    circumstance,s Etc Etc 

 is no different to any  City   on this planet . Some  Win some Lose..

Fact of life ????

[orang37]

Some thoughts:

 

1 what % of the over-building here is related to tourism ? i hypothesize that resident expats here over-estimate this. imho, most of us are not as aware of the agricultural and manufacturing sectors, and the building for northern Thai regional headquarters of national-level businesses, government entities, etc.

 

2 I respectfully question FolkGuitar's statement: "people often do leave small towns, moving to 'The Big City' to look for work, they represent a very small percentage of the population." I believe that very large scale migration for work exists in both CM and Bkk, as well as in the large manufacturing complexes/estates in the rest of Thailand.

 

3 Khun Trevoromgh commented on infrastructure spending: it would really add to the big-picture to have more details on this sector.

 

4 the "public face" of Thailand in western media is so often dominated by news related to tourism, night-life, corruption, often sensationalized, salacious.

 

Yes, a lot of CM people, residents, and migrant labor, are suffering economically, pushed toward doing whatever it takes to survive. A fact that, hopefully, we respond to with compassion, and doing what we can in our expat cocoon..

 

Easy for me to imagine, from the safety of my US retirement income, that Chiang Mai's old city should have been a world heritage site without the clutter of guest-houses, etc., that Chiang Mai should be this, or that, in the future. I remind myself that this is chauvinistic thinking.

 

~o:37;

 

 

[FolkGuitar]

22 minutes ago, orang37 said:

 I respectfully question FolkGuitar's statement: "people often do leave small towns, moving to 'The Big City' to look for work, they represent a very small percentage of the population." I believe that very large scale migration for work exists in both CM and Bkk, as well as in the large manufacturing complexes/estates in the rest of Thailand.

 

I agree with you completely that there is large-scale migration for work in both Chiang Mai and Bangkok. Most of Lampang's foreign industry (and there are MANY foreign countries represented there,) are staffed with migrant workers from other cities.  But...

... Although there may be large-scale migration, it still represents just a small percentage of of the population that actually moves out. I don't see 25% of a small town moving lock, stock, and family, for a job in the big city.

[ChakaKhan]

14 hours ago, BritManToo said:

hasn't had any income for 6 months but still needs to feed and exercise

Aint it the truth friend, speaking from my own exps since walking on the plane in CM......

[malibukid]

how about putting utilities lines underground, fix the side walks and remove the obstacles the block pedestrians.  clamp down on dirty song hews spewing smoke, stop the burning in March and April that makes the city all but unlivable.  fix traffic lights and build more pedestrian over passes.  clamp down on traffic violators... 

[LukKrueng]

21 hours ago, BritManToo said:

A horse riding business close to me pays 5k/month for his premises (house and fields).

He hasn't had any income for 6 months but still needs to feed and exercise his 15 horses.

Staff are long gone.

At the moment he's deciding between selling the horses for their meat, or just letting them go in the forest.

Whatever choice he makes the outlook for the horses is bleak.

 

There's a similar problem with elephants in Chiang Mai.

 

Is that the German guy near maejo? If he plans to just let them go in the forest I'll be happy to take a couple of them, and I'm pretty sure I can find good homes for more of them

[sdweller]

Have you considered that Thailand should simply follow the lead of what more and more countries are doing and simply require testing prior to, as well as upon arrival? (At the cost of the traveler of course).  If negative both, then the odds of having the virus is almost zero.  Then everyone wins. Changing the entire economy of a town is MUCH easier said than done, and unless you want to live at a much lower level than what you were used to, you are really just fooling yourself. The Thai Government has botched this....and it's time to admit that virus is NOT the Plague.  

Edited October 12, 2020 by sdweller

[sdweller]

...and really, this thing very well may fizzle out early in 2021 through the combination of vaccines, treatments, immunity, and who knows exactly what else. Also... it's easy to say "tourists are a pain"... but there are far worse sources of income to rely on for a town or country.

[Scott]

Off-topic post reported and removed.  

 

[FolkGuitar]

14 minutes ago, sdweller said:

...and really, this thing very well may fizzle out early in 2021 through the combination of vaccines, treatments, immunity, and who knows exactly what else. Also... it's easy to say "tourists are a pain"... but there are far worse sources of income to rely on for a town or country.

 

You may be correct. But it's not that tourism is a 'poor' source of income. It's not. It's a great one. 

The problem is that it's the ONLY source of income. And for the past 6 months, and the foreseeable next 6 months Tourism isn't going to pay the bills in Chiang Mai. When that ONE industry fails, the whole house of cards collapses! Chiang Mai put all its eggs into one basket, and that basket crashed.

 

There needs to be OTHER revenue streams working besides Tourism. Other fields bringing jobs to the locals, putting cash back into their hands to inject into the rest of the daily-life needs to complete the circle.

[BritManToo]

I don't believe Chiang Mai needs or has ever needed tourism revenue.

The opportunists lured here by the thoughts of easy money will wander away.

The land owners profiteering off the sky high rents will lower their expectations.

New building development will slow down.

The moat/Loi Kroh/Nimman will gradually revert to normal Thai business.

The universities will expand, and the students will move into the vacant condos.

 

Life will continue.

Edited October 12, 2020 by BritManToo

[Dante99]

14 minutes ago, FolkGuitar said:

But it's not that tourism is a 'poor' source of income. It's not. It's a great one. 

The problem is that it's the ONLY source of income.

There is a bit of manufacturing and substantial agriculture, not just tourism.

 

Isn't there?

 

http://www.chiangmai.go.th/english/index.php/welcome/information

 

•  Agriculture :22.2%, Manufacture :9.5%,Trade & services : 12.5%,hotel & restaurant : 6.9%, Others: 48.9%

 

• 2,612 factories with invested capita 34 mil.baht employing 42,611 workers.

 

Tourism revenue in 2015

• 73,757.45 million baht
• local Thais 48,559.98 mil.baht (39%)

Edited October 12, 2020 by Dante99
add statistical data

[Alainpm]

18 hours ago, jackdd said:

It will just take way longer than a few months until everybody in the chain is affected.

1. A place which relies on tourists shuts down

2. The landlord doesn't have rental income

3. The property might be financed, he can't pay the bank

4. The bank claims the property and tries to auction it

5. Nobody buys it, so they will try to sell it for years

6. After a few years they realize that their asking price is too high and the property bubble might bust.

 

Then there are also places which were frequented by people who worked at places which relied on tourists. Because their customers don't have jobs anymore, they stay away, causing a similar chain of events as mentioned above, just with a few months delay.

Also don't forget that this was just the low season until now, people still had savings from the last high season and might be able to survive this low season. But now their savings are used up, and it doesn't look like there will be many tourists in this year's high season.

The real downfall comes next year, or in the following years, currently this is just the beginning.

Good analysis

[peterpop]

It is an opportunity to clean up the old city to become a real Heritage for Thailand.  Relatively easy to bury the overhead cables, remove the ghastly advertising, paint the buildings to a prescribed colour theme, close some roads and make others areas pedestrian priority .  Not expensive, mostly labour and will power.

OK no bets, this is Thailand.

[alant]

On 10/11/2020 at 10:22 AM, FolkGuitar said:

Perhaps it's time to stop crying, bitching, and moaning, and do something about it.

Sounds about right to me.

A (very) recent poll indicated Thais and Chiang Mai residents do not want international tourists.

This to me seems to say they must look for a totally different direction.

For many years tourism seems to have been in decline here, it is not just the fear of Covid, no tourism promotion seems to be carried out (example what has happened to the once great Loy Krathong parades?)

Times will be difficult and I feel for those suffering the hardships that they are currently suffering and or are to suffer in the future but with both the authorities and the public wishing to insulate themselves from outside contact a new direction needs to be adopted.

It may well be that  Chiang Mai is to return to the cultivation of rice, I don't know as I have not heard any concrete proposal for a viable alternative.

[Dante99]

6 minutes ago, alant said:

A (very) recent poll indicated Thais and Chiang Mai residents do not want international tourists.

Oh wonderfully useful.  Please file with the polls that show they do not want pollution, corruption, hot summers, road accidents, poverty, crime, sickness or old age.  And of course barking dogs, crowing roosters, incompetent tradesmen, dishonesty, fat mean men, unsightly women and flat tires.

 

Uh huh jump right in and do something about it all you TV members with your outstanding credentials and records of success for social and political activism.

[Peterphuket]

23 hours ago, BritManToo said:

A horse riding business close to me pays 5k/month for his premises (house and fields).

He hasn't had any income for 6 months but still needs to feed and exercise his 15 horses.

Staff are long gone.

At the moment he's deciding between selling the horses for their meat, or just letting them go in the forest.

Whatever choice he makes the outlook for the horses is bleak.

 

There's a similar problem with elephants in Chiang Mai.

 

"There's a similar problem with elephants in Chiang Mai."

 

And another one here in Kao Look Chang, Phetchaburi, "Wildlife Friends Foundation" with, if I remember well  25 elephants to feed.