Why Is Everything Closing Down?

[actiondell4]

I just read a link from this forum,I think it was a weblink to a site called "pattaya at night " or similar.

Quite interesting,however the amount of Irish bars that seem to be closing has me shocked as well as TIPS Restaurant etc.

Is it a combination of high rents/no customers or mismanagement?

One business mentioned,a irish bar called BOSCos was paying 70k a month so maybe its the rents.

Then again i read of a group called the peppermint group buying similar type businesses ,so they dont seem to concerned of the ecomomic downturn.

I think Pattaya actually has too many of these irish themed bars,im actually surprised that big one in jomtiem is making a profit OR still trading actually.

Edited May 29, 2010 by actiondell4

[Phil Conners]

I think it's simply high costs (rent, salaries, bribes etc) and high competition leading to low profit combined with the low season and the political problems in Thailand.

[Theo007]

There are certainly a lot fewer people around these days. There will be even fewer if the Reds start up again!

[chops]

I'm surprised the towns not vacant. Everything wrong that could go wrong has happened.

[Thailaw]

The people that frequent those wretched establishments (British and Irish themed pubs) are the same people that frequent them back in their home country. Most of the tourists in Thailand now are Russians and Indians -- expect to find them in Irish pubs? Take a look at the Pound via the Baht now. The cost of a pint has gotten pretty high in Pound terms. So, expect some changes in the "complexion" of Pattaya, some will be for the good (especially if you like borscht). And kiss many of the Irish/British pubs goodbye (thankfully). The nice thing about economic downturns is that they weed out the crap. The really strong ones that offer something that the public broadly wants/enjoys will survive and new ones will emerge.

[gguy]

revenues minus expenses equal profit or loss

revenues are down for most establishments. it is true if you raise prices you will have less demand.

expenses keep rising. never known a thai landlord to voluntary cut rent.

most businesses are undercapitalized and can only take 2 or 3 months of major losses.

[thrilled]

out with the old,in a few months in with the new

[husskydog]

OR maybe it`s because thailand has stopped importng Guinness from Malasia...????

[Tejas]

I'm surprised the towns not vacant. Everything wrong that could go wrong has happened.

The recent events--global economic downturn and riots in Bangkok--have played a part.

But the main reasons for closures are:

1) rising xenophobia and crime

2) insane visa rules (compelling many long-stay expats to leave.....the life blood of the area during the low season)

3) poor city planning (destructive development taking place)

4) real estate/hotel prices not reflecting reality

5) other destinations in Southeast Asia becoming increasingly popular

6) failed social engineering program ("we only want quality tourists")

These are long-term changes that did not happen overnight.

Eventually they result is closures. It did not help for Thai owners to keep prices high during a downward spiral.

When you have fewer customers, you can only keep prices high for so long, then you go under (basic economics).

I think many businesses thought the high season would make up for the losses last year...........that did not happen.

Reality is surfacing. Expect to see more places close.

[Heng]

Who in their right mind would cut rent when the Russians (or whoever) are more than happy to pay the going rate? Prices go up. It's the nature of things. It's also the nature of things for those who can't keep up to be selected for extinction (or less dramatically... going out of business).

[sattahip]

Try the idea on that a lot of these "Irish" establishments were financed from the Irish bubble. Long gone now and all the hot dosh with it so soft vanity businesses go belly up.

[Tejas]

Who in their right mind would cut rent when the Russians (or whoever) are more than happy to pay the going rate? Prices go up. It's the nature of things. It's also the nature of things for those who can't keep up to be selected for extinction (or less dramatically... going out of business).

And that is a perfect example of what is wrong. Way too many condo coffins and hotel rooms are vacant........supply has far exceeded demand.

It is not natural that prices always go up (economics 101).

Take a look at the real estate market in the USA.......prices went down......for good reason.

The Russians are not filling all of the void (some, but far from all).

They are notorious for being "cheap Charlies."

It is a downward spiral followed by a crashing sound.

[onnut]

The people that frequent those wretched establishments (British and Irish themed pubs) are the same people that frequent them back in their home country. Most of the tourists in Thailand now are Russians and Indians -- expect to find them in Irish pubs? Take a look at the Pound via the Baht now. The cost of a pint has gotten pretty high in Pound terms. So, expect some changes in the "complexion" of Pattaya, some will be for the good (especially if you like borscht). And kiss many of the Irish/British pubs goodbye (thankfully). The nice thing about economic downturns is that they weed out the crap. The really strong ones that offer something that the public broadly wants/enjoys will survive and new ones will emerge.

If you do not like the English or Irish themed pubs don't go to them. Simple there are plenty of people who do like them for a night out. We don't all go to bar beers for out of date bottled beer.

[Heng]

Who in their right mind would cut rent when the Russians (or whoever) are more than happy to pay the going rate? Prices go up. It's the nature of things. It's also the nature of things for those who can't keep up to be selected for extinction (or less dramatically... going out of business).

And that is a perfect example of what is wrong. Way too many condo coffins and hotel rooms are vacant........supply has far exceeded demand.

It is not natural that prices always go up (economics 101).

Take a look at the real estate market in the USA.......prices went down......for good reason.

The Russians are not filling all of the void (some, but far from all).

They are notorious for being "cheap Charlies."

It is a downward spiral followed by a crashing sound.

Cheap or not, they pay their rent on time.

And the main difference between here and the USA is that more landlords own their properties outright, instead of financed/mortgaged to the hilt. In other words, no downward pressure to pay whatever it is you owe as long as demand is there. I'd be happy to lower rent and have in the past when I have had vacant units, just haven't had to do so for a long time.

[Tejas]

Who in their right mind would cut rent when the Russians (or whoever) are more than happy to pay the going rate? Prices go up. It's the nature of things. It's also the nature of things for those who can't keep up to be selected for extinction (or less dramatically... going out of business).

And that is a perfect example of what is wrong. Way too many condo coffins and hotel rooms are vacant........supply has far exceeded demand.

It is not natural that prices always go up (economics 101).

Take a look at the real estate market in the USA.......prices went down......for good reason.

The Russians are not filling all of the void (some, but far from all).

They are notorious for being "cheap Charlies."

It is a downward spiral followed by a crashing sound.

Cheap or not, they pay their rent on time.

And the main difference between here and the USA is that more landlords own their properties outright, instead of financed/mortgaged to the hilt. In other words, no downward pressure to pay whatever it is you owe as long as demand is there. I'd be happy to lower rent and have in the past when I have had vacant units, just haven't had to do so for a long time.

You are lucky. But this isn't about you. It is not about a specific, isolated case. I am talking about the general situation. It does not look good to me. Too many owners who should be dropping prices have refused to do so. I am simply stating the obvious. They have been gambling that the high seasons will overcome losses during the low seasons. That has not been happening to the extent necessary to keep their ships afloat. It does not surprise me at all that many shops are closing (more to come).

[FarangBuddha]

I'm surprised the towns not vacant. Everything wrong that could go wrong has happened.

The recent events--global economic downturn and riots in Bangkok--have played a part.

Very agreed.

But the main reasons for closures are:

1) rising xenophobia and crime

Don't agree.

2) insane visa rules (compelling many long-stay expats to leave.....the life blood of the area during the low season)

Don't agree...care to explain. Anyone over 50 can stay with an income stream of a couple thousand US$ per month or B800k in the bank. Not much of a burden in my book. Under 50s...get a non-imm multi-entry visa from home and you're good for 15 months. Anyone else shouldn't be here (except on holiday) anyway.

3) poor city planning (destructive development taking place)

Agree...road construction takes too long and is very disruptive to business.

4) real estate/hotel prices not reflecting reality

Up in the air...hotels are good value in all price ranges but housing to rent or buy is probably 30-40% overpriced (except in East Pattaya...there good value is easy to find).

5) other destinations in Southeast Asia becoming increasingly popular

True...all the "troubles" of the past few years have driven people to try other destinations and many may not be back. Pretty beaches and sunsets are easy to find in SE Asia.

6) failed social engineering program ("we only want quality tourists")

Probably went too far with this push...but seeing the current state of the European economy maybe it wasn't such a bad idea after all.

As to the Irish bar closings, I think there are/were way too many Brit-Irish themed pubs/restos. There must be 2 dozen large ones and innumerable small ones around town. A few of the larger ones may survive as "tourist" curiosities for visitors and residents wanting the "pub" experience on a nite out but the rest will die. As for the smaller ones frequented by UK/Irish sex-tourists and sexpats, these will surely be severely affected by the collapse of the Irish/UK economies...with both the pound and Euro likely to be weak for years. The era of "Cool Britania" and the "Celtic Tiger" are soooo OVER!

[somtampet]

The people that frequent those wretched establishments (British and Irish themed pubs) are the same people that frequent them back in their home country. Most of the tourists in Thailand now are Russians and Indians -- expect to find them in Irish pubs? Take a look at the Pound via the Baht now. The cost of a pint has gotten pretty high in Pound terms. So, expect some changes in the "complexion" of Pattaya, some will be for the good (especially if you like borscht). And kiss many of the Irish/British pubs goodbye (thankfully). The nice thing about economic downturns is that they weed out the crap. The really strong ones that offer something that the public broadly wants/enjoys will survive and new ones will emerge.

If you do not like the English or Irish themed pubs don't go to them. Simple there are plenty of people who do like them for a night out. We don't all go to bar beers for out of date bottled beer.

I agree with your simple thai thoughts,up to you.One thing you miss is that Shenanigans,Jomtien, offer singha for a cool 95 baht,<deleted>,how can a place operate with them sort of prices.Oops forgot,they have to charge that much because of air con,overheads etc.The place is so boring and no atmosphere,and the type of people that go in i avoid at all costs.If i wanted to pay that much i would go to a gogo bar,which i dont go to anyway.There are plenty of family bars that dont charge them stupid prices,and i am NOT traveling 6,000 miles to live here and go in british theme pubs.

[carmine]

There are certainly a lot fewer people around these days. There will be even fewer if the Reds start up again!

Few business will be able to sustain it if they start up again

[PhilHarries]

Like many others I will not mourn the passing of the Irish theme pub. They got this idea that all you need is to paint everything green, stick a few crappy old bits of junk around the place and hang up a sign to Galway and people will flock to the place. But it's simple economics, the bigger the place and the more amenities it has (like a/c) the more expensive it is to set up and run. The more expensive it is the higher the prices have to be to cover the running costs and start paying back the initial investment. Even in a stable economic climate people are not, in general, going to frequent those places every day/night.

Now add in the drop in the value of the currency of your target customer base and boom goes bust.

It always puzzles me why people travel halfway round the world and end up going to a mock up of a pub/restaurant in their home country. A bit like back in the 60s and 70s when Spain was the holiday destination for Brits and many of them spent their time in British style pubs eating fish and chips and drinking Watneys Red Barrel.

Another line long overdue it's Darwinian cull is the Sports Bar (an oxymoron if there ever was one). A couple of big screen tv's and a few football and rugby shirts and that's about all but they whack the prices up.

[PattayaParent]

OR maybe it`s because thailand has stopped importng Guinness from Malasia...????

Exactly, you can hardly call your place an Irish Pub if you don't sell Guinness can you?

[TheWalkingMan]

I agree with your simple thai thoughts,up to you.One thing you miss is that Shenanigans,Jomtien, offer singha for a cool 95 baht,<deleted>,how can a place operate with them sort of prices.Oops forgot,they have to charge that much because of air con,overheads etc.The place is so boring and no atmosphere,and the type of people that go in i avoid at all costs.If i wanted to pay that much i would go to a gogo bar,which i dont go to anyway.There are plenty of family bars that dont charge them stupid prices,and i am NOT traveling 6,000 miles to live here and go in british theme pubs.

I have to agree 100% with somtampet with his comment about Shenanigans, Jomtiem. I went there once and was bored to tears. It has the atmosphere of watching paint dry and I was totally surprised at how dull it was. Once was enough.

TheWalkingMan

[Zstarx]

I quite like Shenanigans Jomtien, if I want a quiet pint I go there, if I want atmosphere I go somewhere else.

[Utterlyuseful]

This has the makings of a good joke..."A Russian, an Indian and a nun walk into an Irish pub......"can anyone finish this one...calling all comics

The people that frequent those wretched establishments (British and Irish themed pubs) are the same people that frequent them back in their home country. Most of the tourists in Thailand now are Russians and Indians -- expect to find them in Irish pubs? Take a look at the Pound via the Baht now. The cost of a pint has gotten pretty high in Pound terms. So, expect some changes in the "complexion" of Pattaya, some will be for the good (especially if you like borscht). And kiss many of the Irish/British pubs goodbye (thankfully). The nice thing about economic downturns is that they weed out the crap. The really strong ones that offer something that the public broadly wants/enjoys will survive and new ones will emerge.

[Ulysses G.]

I am talking about the general situation. It does not look good to me. Too many owners who should be dropping prices have refused to do so.

Some expats are convinced that the answer to everything is cheap prices. There is a very good chance that these owners can't drop prices and still pay rent and also make a living.

Edited May 30, 2010 by Ulysses G.

[actiondell4]

Well I was surprised that TIPS restaurant closed down,i guess it was the rent.

I too have been to Shenaginans at Jomtiem,especially for their Sunday roast buffet,I think it was 499b if i correctly remember.

Very large pub with nice decor.

However i will be surprised if it still will be there/trading in a few years,considering i think they are paying rent,i could be wrong,maybe they own the building freehold?

Same with the one that advertises continually on pattaya Television called i think Murphys,"i never goin home"

Mind you the Murphys guy is certainly a good marketer and chasing the baht which could get them thru the tough period.

On another note ,i was reading the pattaya at night website which mentions that the "peppermint investment group"is buying/taking over several go go bars,so maybe they are looking towards the future?

[midas]

Who in their right mind would cut rent when the Russians (or whoever) are more than happy to pay the going rate? Prices go up. It's the nature of things. It's also the nature of things for those who can't keep up to be selected for extinction (or less dramatically... going out of business).

And that is a perfect example of what is wrong. Way too many condo coffins and hotel rooms are vacant........supply has far exceeded demand.

It is not natural that prices always go up (economics 101).

Take a look at the real estate market in the USA.......prices went down......for good reason.

The Russians are not filling all of the void (some, but far from all).

They are notorious for being "cheap Charlies."

It is a downward spiral followed by a crashing sound.

I disagree with you Tejas . There will be no crash per se.

In 2 or 3 years time those same vacant properties will still be there vacant

They will just stagnate. The Thais never sold their condo's in Bangkok after the 1997 Crisis

even though many were not even fitted out and were happy to let them just sit there

for more than 10 years. I saw one like this 2 years ago in Bangkok ....dust cobbwebs and all

[actiondell4]

Well at least SHAMROCKS near boyztown is still going.

[Rimmer]

One not funny post deleted, next person to post racist jokes gets a warning.

[Heng]

Who in their right mind would cut rent when the Russians (or whoever) are more than happy to pay the going rate? Prices go up. It's the nature of things. It's also the nature of things for those who can't keep up to be selected for extinction (or less dramatically... going out of business).

And that is a perfect example of what is wrong. Way too many condo coffins and hotel rooms are vacant........supply has far exceeded demand.

It is not natural that prices always go up (economics 101).

Take a look at the real estate market in the USA.......prices went down......for good reason.

The Russians are not filling all of the void (some, but far from all).

They are notorious for being "cheap Charlies."

It is a downward spiral followed by a crashing sound.

Cheap or not, they pay their rent on time.

And the main difference between here and the USA is that more landlords own their properties outright, instead of financed/mortgaged to the hilt. In other words, no downward pressure to pay whatever it is you owe as long as demand is there. I'd be happy to lower rent and have in the past when I have had vacant units, just haven't had to do so for a long time.

You are lucky. But this isn't about you. It is not about a specific, isolated case. I am talking about the general situation. It does not look good to me. Too many owners who should be dropping prices have refused to do so. I am simply stating the obvious. They have been gambling that the high seasons will overcome losses during the low seasons. That has not been happening to the extent necessary to keep their ships afloat. It does not surprise me at all that many shops are closing (more to come).

I wasn't talking about just me, but rather the general situation from my point of view. I know many owners who refuse to lower prices as well. Typically those are folks who don't want to deal with tenants with cash flow issues. There's no issue of keeping afloat or not because these folks typically have enough rental, interest, and other business income to easily offset any inactive rental units.

[phantomfiddler]

Thanks to the evil "T" the future of this wonderful country is in dire straits. However, the oldest irish bar in Pattaya (perhaps Thailand) is still going strong with reasonable prices and good craic. You guessed it, the Shamrock Bar on Pattayaland Soi 2, aka Soi 13/4, which has been operating in grand style since 1985 and the only irish bar in Pattaya frequented by the cream of Ireland,s irish musicians. The only drawback is the banjo playing cretin who owns the bar, but if you,re lucky he will be off in New Zealand trying to outwit the intellectually superior trout family.