Thai Billionaire Betting on Tourism Rebound Eyes Troubled Hotels

[webfact]

File photo for reference only/Credit: Shutterstock

 

By Randy Thanthong-Knight

 

Asset World Corp., the property unit of Thailand’s richest man, plans to acquire distressed hotels, betting on a quick revival in tourism once the Southeast Asian nation reopens to foreign visitors.

 

More than 100 hotels are available for sale in Thailand currently and “the number is increasing by the day,” according to Stephan Vanden Auweele, chief hospitality group officer of the company, majority-owned by billionaire Charoen Sirivadhanabhakdi’s TCC Group. It bought a hotel in tourist hotspot Pattaya this month and is on the lookout for more acquisitions, he said.

 

Tourism-reliant Thailand has gone without its millions of foreign visitors for a year, leaving its hotels and tourism businesses struggling to stay afloat. Some properties have closed down and may not reopen when international travels resume later this year, according to the Thai Hotels Association.

 

Full story: https://www.bloomberg.com/news/articles/2021-03-23/thai-billionaire-betting-on-tourism-rebound-eyes-troubled-hotels

 

 

-- © Copyright Bloomberg 2021-03-24

 

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[Flying Saucage]

2 hours ago, webfact said:

Asset World Corp., the property unit of Thailand’s richest man, plans to acquire distressed hotels,

 

Well, is there any doubt that this was part of the plan from scratch on? Let the Thai industry go bankrupt first, and then take it over as a bargain, one part for CP, another part for the Chinese buddies, another part for...

 

“This situation is about cleaning up and maybe eliminating whoever was already not doing well before the crisis,” Vanden Auweele said. “If people weren’t making money then, should they still exist?”

 

Doesn't say this all about the character of these people at the very top of the Sakdina pyramid? So disgusting!

[GeorgeCross]

when there's blood in the streets..

 

[jaiyen]

So, as there will be no new hotels built for a very long time, if ever, we will all have to put up with old, dirty and worn out facilities and rooms for ever !

[futsukayoi]

28 minutes ago, jaiyen said:

So, as there will be no new hotels built for a very long time, if ever, we will all have to put up with old, dirty and worn out facilities and rooms for ever !

Here in Koh Samui there are quite a few 5 star resorts underway.  Some have slowed down due to Covid but some are close to completion.

[LazySlipper]

And the rich get richer...

[SomchaiCNX]

That's how these people operate.

 

[mikebell]

Next will come the hoovering up of houses at knock-down prices by Chinese businessmen.  Conspiracy theories anyone?

[ronaldo0]

More than 100 hotels for sale ? Probably more like a 1000 .

[khunpeer]

vulture-mentality! ????

[Pattaya Spotter]

When the tide goes out, you see who was swimming naked

[BostonRob2]

My goodness posters on this thread should get a life!

 

It's called business! 

[poskat]

let the harvesting begin...

[thequietman]

If CP could kindly give us a list of the hotels that they own and will acquire, that would be great.

 

This way, I know what ones not to stay in. 

[Walker88]

Crises can exacerbate existing problems, as the world saw after the Financial Crisis of 2008 and now with Covid. Thailand is already #6 in the world in terms of its Gini Coefficient ( a measure of wealth distribution/inequality in a country), with approximately 70% of Thailand's wealth controlled by less than 1%, and Covid will only further skew wealth distribution. (Surprisingly, Sweden is #3, but that is likely heavily skewed by H&M, Tetra Pak, and IKEA).

 

This is pretty much the nature of capitalism and 'solving' it is probably not possible. There may not be an answer. Higher taxation is a disincentive to many, and other non-capitalist ideologies invariably lead to even greater concentration of wealth in the hands of the elite. Wealth taxes are perhaps well-intentioned, but troublesome to implement. How does one value closely held stock, since an owner could not possibly realize current market value if forced to sell his/her massive holdings (think Jezz Bezos, Elon Musk). How about valuing real estate? What is a hotel worth in Thailand today with borders closed?

 

Maybe the best one can do is anti-monopoly laws, but determining whether a monopoly is 'harmful' and discouraging fair priced competition or creates a barrier to entry is not easy.

 

What the TCC Group is doing is inevitable, even if it leaves a bad taste in the mouths of many whose only business error was not planning for a Black Swan event like the pandemic.

 

There are lesser opportunities for smaller firms and individuals who are capital rich. There are plenty of businesses for sale now in Thailand and elsewhere, and as part of economic recovery, these businesses will find new owners and may prosper when some degree of normalcy returns. TCC cannot buy everything.

 

Is this fair? It probably doesn't sit well with many, but unless someone can come up with a viable solution, this is how the world operates. There are vultures in nature and another type in society, given the term 'vulture capitalists'.

[2530Ubon]

5 minutes ago, Walker88 said:

Maybe the best one can do is anti-monopoly laws, but determining whether a monopoly is 'harmful' and discouraging fair priced competition or creates a barrier to entry is not easy.

Thailand has those but they don't matter. Just look at how CP snapped up Tesco Lotus. They now control around 90 percent of all food retail in Thailand with this deal. Rich always get richer...

 

6 minutes ago, Walker88 said:

It probably doesn't sit well with many, but unless someone can come up with a viable solution, this is how the world operates. There are vultures in nature and another type in society, given the term 'vulture capitalists'.

 

Solution: Stop corrupt officials from doing further damage to the people.

Edited March 24, 2021 by 2530Ubon

[internationalism]

I don't wish them well.

International tourism is grounded for the next 2 years due to covid and global economic crisis.

Domestic tourism is falling, for the same reasons, as international one. And they will boycott the CP businesses as monopolistic and pro-establishment.

After renovating those hotels they will be forced to get chinese "zero baht" package tours. 

With return on their investment in over 20 years (good hotels in pattaya were able to get it in 8 years)

 

 

[Walker88]

24 minutes ago, 2530Ubon said:

Thailand has those but they don't matter. Just look at how CP snapped up Tesco Lotus. They now control around 90 percent of all food retail in Thailand with this deal. Rich always get richer...

 

 

Solution: Stop corrupt officials from doing further damage to the people.

Not sure how to 'stop corruption'.

 

30 or 40 years ago Hong Kong enacted laws that targeted corruption, and it cleaned up lots of bad practices, but upon reversion in 1997, those who sucked up to Beijing did not have to follow the rules. Major RE developer Li Kai Shing once backed out of purchasing a parcel of land in the govt auctions, after the 2008 financial crisis hit, as RE prices were falling and he would have owned something worth considerably less than he paid. He got away with that. Nobody else could have, save for fellow Beijing-sycophantic tycoons.

 

There needs to be a fully functioning democracy and a free press in order that clean politicians would be elected who could pass and enforce laws against corruption.

[khunPer]

It would most likely be in the higher quality end of the hotel market that will first appear surge, based on guests wants quality, and lower than normal number of bookings increase competition and lower the rates.

 

There seems to be a number of resorts to take over if you have access to cash from around 500 million baht and up to a bit more than a billion baht – that's what I've seen "advertised" – which might be bargain prices compared to normal tourism market; however hard to judge if it really is so without professionally insight knowledge.

 

But good to hear that some looks the tourist market recover as fast as 2022, when most news articles seems to quote travel business experts saying that it might take three years before it's back to normal...????

[Freddy42OZ]

2 hours ago, BostonRob2 said:

My goodness posters on this thread should get a life!

 

It's called business! 

 

Exactly.  

[John Drake]

It's enough to make you feel warmly towards CP Group.

[newnative]

6 hours ago, jaiyen said:

So, as there will be no new hotels built for a very long time, if ever, we will all have to put up with old, dirty and worn out facilities and rooms for ever !

     Nonsense.  There are 3 very large high rise hotels going up right now in Pattaya.  Plus, a very large high rise addition to another large hotel.  Plus, several boutique hotels.  All this is  in addition to new hotels that opened not too long ago:  Ozo, Mytt, Brighton, the Amari Suites addition, LK Emerald Beach, Courtyard by Marriott, Golden Tulip, and other boutique hotels.  

[Golden Triangle]

Let them buy as many as they want then wait for the bottom to fall out of the property market and they lose all their money, now that would be funny ????????

[SomchaiCNX]

On 3/24/2021 at 10:25 AM, BostonRob2 said:

My goodness posters on this thread should get a life!

 

It's called business! 

Yes you are right but there is a huge difference between a businessman and an entrepreneur.

[SomchaiCNX]

22 hours ago, Walker88 said:

Not sure how to 'stop corruption'.

 

30 or 40 years ago Hong Kong enacted laws that targeted corruption, and it cleaned up lots of bad practices, but upon reversion in 1997, those who sucked up to Beijing did not have to follow the rules. Major RE developer Li Kai Shing once backed out of purchasing a parcel of land in the govt auctions, after the 2008 financial crisis hit, as RE prices were falling and he would have owned something worth considerably less than he paid. He got away with that. Nobody else could have, save for fellow Beijing-sycophantic tycoons.

 

There needs to be a fully functioning democracy and a free press in order that clean politicians would be elected who could pass and enforce laws against corruption.

If I'm not mistaken CP owned Lotus before Tesco became a partner after the 97 crash.

After the bird flu many small farmers lost the right to raise chickens as their technique was considered not safe, only those like CP did it right of course (surprise surprise). Now these unsafe farmers work for CP on their farms but sell to CP. That's how corruption legally works. CP does not buy corn from people with not land titles............ so people with land titles (working for CP) have an increased harvest on paper and buy the corn from the landlesses people even cheaper. Not saying they are doing this but I would not surprised. 

[JimGant]

On 3/24/2021 at 10:25 AM, BostonRob2 said:

My goodness posters on this thread should get a life!

 

It's called business! 

Indeed. What a great time to snap up depressed properties -- many depressed because of covid, but others already showing black mold before the pandemic. That the tourism economy certainly will return in a year or two gives these farsighted businessmen (entrepreneurs) justified incentive to identify well-located properties now available at bargain prices -- and refurbish to a new standard those falling down, or just await the resurrection for those already pristine 5-star bargains.

 

The rich get richer? God, I certainly hope so. Those smart enough to take advantage of business situations available due to covid, deserve the rewards. Of course, if you're an anti-capitalist, this is anathema, as the creed is: Those who can't should milk, disincentivize those who can. Fortunately, Red China learned the stupidity of this the hard way.

 

Anyway, good luck to the entrepreneurs laying the groundwork for tomorrow's Thai tourist economy. That this will provide jobs for the "little guys" will be appreciated -- and, hopefully, that fact not lost on the 'unable to quite succeed' socialist crowd.