Crisis-hit Hotels Up For Sale

[churchill]

BANGKOK: - More than 100 hotels and resorts are reportedly up for sale in Thailand as hotel occupancy plunges to historic lows on the back of the worldwide recession and the country's political turmoil.

Two cases of H1N1 influenza found in Thailand now pose yet another threat to tourism.

'This year is the worst for our hotel industry in 20 years,' Mr Chanin Donavanik, chief executive officer of the Dusit International chain, told The Nation daily this week.

The hotels for sale or auction range from five-star properties to small basic establishments, the paper reported. They are concentrated largely in Bangkok, Phuket, Koh Samui, Hua Hin, Pattaya and Chiang Mai.

'Business is very, very bad, and the future looks absolutely bleak,' the outgoing general manager of the Mandarin Oriental, Mr Kurt Wachtveitl, told foreign journalists on Tuesday. He estimated that hotel occupancy rates were just 20 per cent across the board. The 72-year-old, Thailand's most senior hotelier and an industry legend, plans to retire next month.

'This is the perfect storm, for Thailand in particular - but wherever we (the Mandarin Oriental group) have hotels, in the first three to four months of the year, business is 20 per cent down,' he said.

'Nowadays, nobody is booking ahead. Now is the time when bookings come in for July-August, but everybody is waiting to see what the world will look like - and waiting until the last minute.'

The Oriental - consistently rated one of the world's best hotels - has 45 suites which are usually highly sought after, he said. But not one has been booked.

One problem even with affluent customers, is that they do not want to be stuck in the country - as was the case when 'yellow-

shirt' supporters of the People's Alliance for Democracy (PAD) closed down Phuket airport and took over Bangkok's two airports for several days last year in an attempt to force the government of the day to quit.

The airport closures struck at the heart of the economy - especially tourism. Mr Wachtveitl called it an episode customers will 'remember for the rest of their lives'.

http://www.straitstimes.com/Breaking%2BNew...ory_376550.html

[rick75]

The article states they are 20% down, but then also states they have 20% occupancy, does this mean there usual occupancy is 25%. If this is the case how do they survive under ordinary circumstances, In the West I was led to believe that they needed 60% plus to break even.

[mmushr00m]

Anyone know where I can find a list of the hotels that are for sale?

[MeetJohnDoe]

The world-wide economic collapse, and the related drop in tourism and business travel certailny has allot to do with this. Then you add in the self-inflicted wounds Thailand has done to itself over the past 4-5 years and it's a double blow. Finally, as was the case again world-wide during the credit bubble, the orgy of over-investment in new hotels has lead to massive oversupply and you get the knock-out blow.

Should make for some nice deals for anyone looking for a cheap room over the next few years

[MJP]

The world-wide economic collapse, and the related drop in tourism and business travel certailny has allot to do with this. Then you add in the self-inflicted wounds Thailand has done to itself over the past 4-5 years and it's a double blow. Finally, as was the case again world-wide during the credit bubble, the orgy of over-investment in new hotels has lead to massive oversupply and you get the knock-out blow.

Should make for some nice deals for anyone looking for a cheap room over the next few years

Nuow cuztoma! Puwt pwice upp! Hawve tou pai stawff!

Expect increases. I know, I know . . .

[think_too_mut]

Should make for some nice deals for anyone looking for a cheap room over the next few years

It might not. Those losing 10 mil a month won't discount to make the loss "just" 5 million.

They will either close or operate with 10-20% of floors and minimal staff (that can not be scaled down in pair with rooms) and bad service.

"Better customers at low prices than no customers at all" stupidity that some parrot around will not work. Never has, only for a short period until recovery. No recovery or not soon (nothing like "next few years") - nothing for customers.

Edited May 14, 2009 by think_too_mut

[PoorSucker]

Anyone know where I can find a list of the hotels that are for sale?

For sale on Samui according to http://www.phuketgazette.net/

According to the anonymous property agent's firm, Samui Buri Resort and Spa is selling for 1.1 billion baht, while newly opened Villa Lawana wants 1.5 billion. Meanwhile, Ban Taling Ngam is being sold at public auction, listed at 1.8 billion baht, and Nora Beach Resort and Spa is offered at 2 to 2.5 billion.

[yabaaaa]

The world-wide economic collapse, and the related drop in tourism and business travel certailny has allot to do with this. Then you add in the self-inflicted wounds Thailand has done to itself over the past 4-5 years and it's a double blow. Finally, as was the case again world-wide during the credit bubble, the orgy of over-investment in new hotels has lead to massive oversupply and you get the knock-out blow.

Should make for some nice deals for anyone looking for a cheap room over the next few years

One Bangkok hotel I know price 1300 baht a night for Thais , Farang price minimum 1700 baht oh yeah!! Two years ago it was 1270 baht a night for "us" , this was a trade price negotiated by my wife on behalf of her company.

[JohnGotti]

He estimated that hotel occupancy rates were just 20 per cent across the board.

This is his estimate for the average Thailand hotel.

This is the perfect storm, for Thailand in particular - but wherever we (the Mandarin Oriental group) have hotels, in the first three to four months of the year, business is 20 per cent down,' he said.

Mandarin Oriental International is doing 20% less business.

Just to clarify for the ESL crowd.

[rick75]

Would his estimate not be based on his own hotels occupancy rates?

[noahvail]

Would his estimate not be based on his own hotels occupancy rates?

He's giving two facts:

1)His own hotel, part of an international group, is running at only 20% occupancy.

2)The international group as a whole, is down 20%. One might be able to say that the Thai hotel's extremely low occupancy rate contributed to the drop in the whole group.

I can see where the confusion can occur, since the number "20" happens to appear in both statements. But they mean two entirely different things.

[churchill]

Bangkok - While the tourism industry worldwide is being buffeted by the economic crisis and swine flu, Thailand's hoteliers have their own special problems, such as persuading guests that airports would stay open and protestors won't invade the premises.

Bookings, especially at five-star establishments, have been down since December when anti-government protestors called yellow shirts seized Bangkok's two international airports, closing the capital to international travel for 10 days and leaving hundreds of thousands of tourists stranded.

Then, last month, a rival group of anti-government protestors called red shirts invaded the posh Royal Cliff Beach Beach Resort in Pattaya, south-east of Bangkok, forcing the cancellation of a regional summit of Asian leaders who had gathered there.

'In December, the yellow shirts shot themselves in the foot, and then last month, the red shirts shot themselves in the head,' soon-to-retire Kurt Wachtveitl said at an event marking his 42 years as general manager of the famed Oriental Hotel in Bangkok.

'There is simply no one coming anymore - or nobody with money,' Wachtveitl said. 'It's the perfect storm, particularly for Thailand.'

And particularly for five-star establishments.

Although statistics are hard to come by - tourist arrival figures have been elusive in Thailand ever since the Tourism Ministry took over the job of compiling them from the Tourism Authority of Thailand - Thai hotels are definitely hurting this year.

First-quarter earnings of the hotel groups listed on the Stock Exchange of Thailand were down by an average of 70 per cent with some of them in the red.

'This is the worst year I've seen in my 25 years in the business,' Surapong Techaruvichit, vice president of the Thai Hotels Association, said, citing the industry's litany of problems - the recession, swine flu and Thai political instability.

Thailand is hardly a stranger to political unrest. The kingdom has experienced 18 coups in the past 76 years, the latest of which took place in September 2006.

'In the past, the political upheavals lasted two to three days, so there was a shock, and then little by little, things returned to normal,' Surapong said. 'But for this one, the shock is long. The closure of the airports and the Pattaya disturbances - these surprised everyone.'

According to Surapong, Thai hotel occupancy rates in May were down 50 per cent compared with the same month last year.

Hotels are slashing prices and offering deals, making Thailand a cheap destination again after years of rising prices and healthy profits for the industry.

'Since 1998 to last year, the hotel industry went through a fantastic run,' said Andrew Langdon, senior vice president of Jones Lang LaSalle (Thailand), an international property consultant.

Langdon predicted that some hotels, especially the family-managed ones, might look for buyers this year or international brand management in response to the current downturn.

'Basically, the good times for the hotel industry are over for a year or two,' Langdon said.

But nobody is expecting any fire sales.

'I would say everyone is suffering in this current crisis, but I haven't seen any major bargains,' property consultant CB Richard Ellis chairman David Simister said.

'There is bound to be a big gap between what someone wants to get for their property and what someone wants to pay, so that's going to create a market where there won't be many transactions,' Simister predicted.

One reason Thai hoteliers are unlikely to be selling their properties cheap is the tremendous confidence many have in Thailand as a tourist destination despite its current political problems.

'Thailand is down, but it's not out,' said John Koldowski, head of research at the Pacific Asia Travel Association. 'There is a strong love affair with Thailand as a destination. Repeat visitations are extremely high.'

Even the upmarket Oriental has benefited from the returnee crowd.

'The only guests we've had in the past five months are people who have been to Thailand many times before, who know Thailand and aren't afraid about the political situation,' Wachtveitl said.

He is more worried about the country's ability to attract affluent visitors who are less familiar with Thailand's political foibles.

'For people who are affluent, their first likes and dislikes are security, security, security,' Wachtveitl said. 'The people who will come to Thailand in the years to come will be factory workers, old retired people and backpackers because they come here for only one reason: ... It's much cheaper to come to Thailand than to stay home.'

http://www.monstersandcritics.com/news/bus...torm__Feature__

[midas]

'For people who are affluent, their first likes and dislikes are security, security, security,' Wachtveitl said. 'The people who will come to Thailand in the years to come will be factory workers, old retired people and backpackers because they come here for only one reason: ... It's much cheaper to come to Thailand than to stay home.'

http://www.monstersandcritics.com/news/bus...torm__Feature__

Dont count on that either...........people in these groups will have far less disposable income

for a long haul air ticket.....

[MJP]

The people who will come to Thailand in the years to come will be factory workers, old retired people and backpackers because they come here for only one reason: ... It's much cheaper to come to Thailand than to stay home.'

No, it ain't cheaper if you're a tourist, only if you're set up here with low costs and understand how to live cheaply.

They come here for another reason . . . but I won't touch that one.

[h90]

The article states they are 20% down, but then also states they have 20% occupancy, does this mean there usual occupancy is 25%. If this is the case how do they survive under ordinary circumstances, In the West I was led to believe that they needed 60% plus to break even.

Considering that at least in some areas there are every year 10 % more rooms.

So when there are every year the same amount of visitors you have 10 % less occupancy.

As well I think people tend to save money. So maybe the low price are still full, the middle class have a small minus and the high end a big minus?

(or a variation of that)

[Boater]

It's much cheaper to come to Thailand than to stay home.'

err with the current THB - GBP , its cheaper in england................

[keestha]

There are no reliable hotel occupancy rate statistics. Only the large upmarket hotels contribute to the statistics.

In Phangnga (Khao Lak) and Krabi, last high season the 500-1000 Baht guesthouses were packed, but the larger more expensive hotels were struggling. I concede though that the total number of tourists has declined, my impression is that mainly the package tourists are staying away.

Sure there are good deals to be had now, what about 4 weeks flight+room, breakfast included, in a Khao Lak 3/4 star hotel for 1100 Euro?

[MJP]

It's much cheaper to come to Thailand than to stay home.'

err with the current THB - GBP , its cheaper in england................

Depends how you live, apples for apples and all that. It's getting close I will say. But Pound for worthless Pound . . . even with all my current strife . . . sooner be here boater.

[beano2274]

Hope to see cheap prices at the Fayre in Queen Sirikhits this weekend.

Travel Fayre, well worth a visit if prices are going down, bargains will be plentiful.

[Hanzkneez]

The Hotels just have to increase their price to cover the losses no problem - TIT

[Abrak]

The OPs point is generally well taken.

It quotes as sources Kurt (from the Oriental) who is clearly the most credible spokesperson in hotels in Thailand (and I suspect is probably regarded as amongst the 2 or 3 best hotel managers in the world). It also quotes K.Chanin, who despite differences with his mother (Khuying Chanut, the owner), unconventional sexuality etc, is also extremely well qualified to express an opinion.

Where I have a problem is that there are no prices connected to these expected sales. (So the extent I have a problem with the ops idea it is more or lines along the idea of this - my mate bought a house in Phuket at US$2m 18 months ago and has now put it on the market for US$5.5m.) There maybe a large number of places for sale but my general assumption is because they think there is someone incredibly stupid enough to buy rather than there is an actual investment opportunity out there.

[dbrenn]

BANGKOK: - More than 100 hotels and resorts are reportedly up for sale in Thailand as hotel occupancy plunges to historic lows on the back of the worldwide recession and the country's political turmoil.

Two cases of H1N1 influenza found in Thailand now pose yet another threat to tourism.

'This year is the worst for our hotel industry in 20 years,' Mr Chanin Donavanik, chief executive officer of the Dusit International chain, told The Nation daily this week.

The hotels for sale or auction range from five-star properties to small basic establishments, the paper reported. They are concentrated largely in Bangkok, Phuket, Koh Samui, Hua Hin, Pattaya and Chiang Mai.

'Business is very, very bad, and the future looks absolutely bleak,' the outgoing general manager of the Mandarin Oriental, Mr Kurt Wachtveitl, told foreign journalists on Tuesday. He estimated that hotel occupancy rates were just 20 per cent across the board. The 72-year-old, Thailand's most senior hotelier and an industry legend, plans to retire next month.

'This is the perfect storm, for Thailand in particular - but wherever we (the Mandarin Oriental group) have hotels, in the first three to four months of the year, business is 20 per cent down,' he said.

'Nowadays, nobody is booking ahead. Now is the time when bookings come in for July-August, but everybody is waiting to see what the world will look like - and waiting until the last minute.'

The Oriental - consistently rated one of the world's best hotels - has 45 suites which are usually highly sought after, he said. But not one has been booked.

One problem even with affluent customers, is that they do not want to be stuck in the country - as was the case when 'yellow-

shirt' supporters of the People's Alliance for Democracy (PAD) closed down Phuket airport and took over Bangkok's two airports for several days last year in an attempt to force the government of the day to quit.

The airport closures struck at the heart of the economy - especially tourism. Mr Wachtveitl called it an episode customers will 'remember for the rest of their lives'.

http://www.straitstimes.com/Breaking%2BNew...ory_376550.html

I feel sorry for all the people that will lose their jobs. Shutting down the airports was such an incredibly stupid thing to do.

[happylarry]

Anyone know where I can find a list of the hotels that are for sale?

Try looking in the classified for sale section on this forum...there a few hotels mentioned in there.

HL

[daranena]

Hi

In reply to your question - I am selling my guest house, 53 inn, as I am moving to Europe.

53 inn is a small and stylish guest house in central Bangkok.

The guesthouse resides in a quiet residential area in the good part of Sukhumvit, around the corner of the Thong Lo skytrain station, providing easy access to Bangkoks business, shopping and entertainment districts.

The surrounding area features an abundance of restaurants, clubs and spas within walking distance from the guest house. The guest house is fully equipped with high quality beds, aircondition and individual bathrooms

We have developed a good website (53inn.com) with integrated online booking system and has agreements with many hotel reservation portals such as Expedia, Latestays, Sunhotels, and Hostelbookers.

Price: 2,600,000 THB

Daranee Sriban

081 816 1770

[mmushr00m]

53Inn, the one right at the corner of Sukumvit 53? White building with shops downstairs?

How much are you paying for rent?