Running A Bar On Samui

[wayned]

Haha my "way of thinking".....no mate I just don't want to see anyone else lose their hard earned.

Not many people do (want to see that), but thanks for your concern. I won't be buying anything on Samui anytime soon.

To put a round figure on it, it cost me nearly 6,000,000 baht of my personal funds over the 8.5 years. So in my terms, "I lost my ass"! It was mostly caused by the changing demographics and my lack of experience and inability to implement positive corrective changes.

Ok, so I did read your post wrong. But if that was everything you spent in the 8.5 years, it works out to around 60,000 baht per month. I know guys here that piss more than that up against the wall - at least you had (I assume) some pretty good times!

I know how I'd rather spend 60,000 per month!

So in your opinion for someone to pay 60000 baht/month out of their pocket to run a bar is good business sense. If you're interested, I have a pig farm for sale! Just needs a little renovation and some pigs.

[jamesbrock]

So in your opinion for someone to pay 60000 baht/month out of their pocket to run a bar is good business sense. If you're interested, I have a pig farm for sale! Just needs a little renovation and some pigs.

No, I never said it was good business sense, not did I say it was a financially responsible thing to do; what I did say was that if you're going to be 60,000 baht/month out of pocket anyway, I would rather it be sitting in my own bar than pissing it away in someone else's.

Your personal circumstances notwithstanding (you may believe that you could have put that 60,000 baht/month to better use), I see a lot of non-working, non-business owning expats spending that and more doing nothing, mainly in other people's bars (I also know a lot that are subsisting on a lot less) - to me that is a worse use of ones 60,000 baht/month than running a bar. [Note the 'to me'. Everyone is at different stages in their lives, and those pissing 60,000 baht/month away are obviously happy; I am not denigrating their choice, I am just saying it's not for me.]

On the other hand: pigs?? Hmmm.... Sounds interesting!

[Tropicalevo]

On the other hand: pigs?? Hmmm.... Sounds interesting!

No good inThailand - the market is sowed up (groannnnn)

[itishothere]

On the other hand: pigs?? Hmmm.... Sounds interesting!

No good inThailand - the market is sowed up (groannnnn)

I believe there should be a good supply of the flying type of pig on this island. (Even bigger groannnnn)

[BangrakBob]

So in your opinion for someone to pay 60000 baht/month out of their pocket to run a bar is good business sense. If you're interested, I have a pig farm for sale! Just needs a little renovation and some pigs.

No, I never said it was good business sense, not did I say it was a financially responsible thing to do; what I did say was that if you're going to be 60,000 baht/month out of pocket anyway, I would rather it be sitting in my own bar than pissing it away in someone else's.

Your personal circumstances notwithstanding (you may believe that you could have put that 60,000 baht/month to better use), I see a lot of non-working, non-business owning expats spending that and more doing nothing, mainly in other people's bars (I also know a lot that are subsisting on a lot less) - to me that is a worse use of ones 60,000 baht/month than running a bar. [Note the 'to me'. Everyone is at different stages in their lives, and those pissing 60,000 baht/month away are obviously happy; I am not denigrating their choice, I am just saying it's not for me.]

On the other hand: pigs?? Hmmm.... Sounds interesting!

Surely if you had 60,000 Baht a month to spend away for 8.5 years you'd rather not be spending it working 12 hours a day 6.5 days a week running a bar. I get your point about pissing it up the wall in someone else's bar though.

[jamesbrock]

Surely if you had 60,000 Baht a month to spend away for 8.5 years you'd rather not be spending it working 12 hours a day 6.5 days a week running a bar. I get your point about pissing it up the wall in someone else's bar though.

Putting it that way, probably not for 8.5 years, but for as long as I enjoy it. Not that I'd be "working" 12 hours a day 6.5 days a week, but I might "be there as a customer"...

[BangrakBob]

Surely if you had 60,000 Baht a month to spend away for 8.5 years you'd rather not be spending it working 12 hours a day 6.5 days a week running a bar. I get your point about pissing it up the wall in someone else's bar though.

Putting it that way, probably not for 8.5 years, but for as long as I enjoy it. Not that I'd be "working" 12 hours a day 6.5 days a week, but I might "be there as a customer"...

Well at least you did it enjoy it from that perspective. I see a lot bar owners here running around playing a very hands on roll, looking knackered and stressed, instead of being a customer for their 60K spends.

[insertmembernamehere]

A few bars (and others) for sale in Lamai. Not an exhaustive list by any means. There are many shops empty in various places. I think these are the kinds of things the OP was thinking about.

Banana Bar

Bar next to Holland House

Blackout Bar

The unfortunately named, Camel's Toe Bar

The once venerable, Bill's Bar

Shop in DSA

The once-popular Eden Bar

German Beerhouse -- Good Bye Deutschland

Hiccups Bar

Collection of bars at the end of the walking street -- Bio Bar is in the corner as the lonesome tenant

Komedy Klub

Former Ladyboy Cabaret Show location next to Fusion

India Live

Smirnoff Bar in cul-de-sac across from Shamrock

Super Sub

[seekingfriends]

its the girls that bring the customers in .unless you can get a group of expats to take a shine to your bar then you will do all right for yourself this has happened with several bars in phuket .middle age couples who seem to live in these bars from what i can tell .they can be a bit over the top . but they spend money . if you want the names i can tell you . james hat yai

[seekingfriends]

its the girls that bring the customers in .unless you can get a group of expats to take a shine to your bar then you will do all right for yourself this has happened with several bars in phuket .middle age couples who seem to live in these bars from what i can tell .they can be a bit over the top . but they spend money . if you want the names i can tell you . james hat yai

[seekingfriends]

i know some of these bars, or i should say i did . james hat yai

[jamesbrock]

A few bars (and others) for sale in Lamai. Not an exhaustive list by any means. There are many shops empty in various places. I think these are the kinds of things the OP was thinking about.

And, dare I say it, the exact kinds of places that I wouldn't touch with a barge pole!

[insertmembernamehere]

True, but this is what is on offer.

I'd like to see some shots of places that have that special allure (and are up for rent/sale) that have been rumored here as being prime.

[jamesbrock]

True, but this is what is on offer.

I'd like to see some shots of places that have that special allure (and are up for rent/sale) that have been rumored here as being prime.

And the fact that this is what is on offer is why I'm not a bar owner now.

Unfortunately, none of the places that I believe are failing to capitalise on their potential are for sale. I won't name any names, but I have been watching one particular place with interest for some months now which, as I said in post #74, if it went onto the market, I'd buy it in a heartbeat; but, alas I am forced to watch this wasted potential with despair, while selfishly hoping the owner falls on hard times...

Edited April 7, 2012 by jamesbrock

[itishothere]

Unfortunately, none of the places that I believe are failing to capitalise on their potential are for sale. I won't name any names, but I have been watching one particular place with interest for some months now which, as I said in post #74, if it went onto the market, I'd buy it in a heartbeat; but, alas I am forced to watch this wasted potential with despair, while selfishly hoping the owner falls on hard times...

I am not being facetious, honest. But you obviously believe this bar is not reaching its' potential, so why don't you go in and make him/her an offer? Or, if it really isn't for sale and they don't show any interest, why not tell the owner how you think it could be improved? What have you got to lose? The bar isn't going to be yours anyway, and you never know, you may get free beers in a place you want to be in, in a years time? He's happy. You're happy.

[jamesbrock]

I am not being facetious, honest. But you obviously believe this bar is not reaching its' potential, so why don't you go in and make him/her an offer? Or, if it really isn't for sale and they don't show any interest, why not tell the owner how you think it could be improved? What have you got to lose? The bar isn't going to be yours anyway, and you never know, you may get free beers in a place you want to be in, in a years time? He's happy. You're happy.

That's one tack, but I figure if I show my hand, any figure he may have in mind would suddenly increase. I would rather watch and pounce, than unnecessarily increase what I'd have to pay. I don't need to buy a bar.

[ydraw]

A few bars (and others) for sale in Lamai. Not an exhaustive list by any means. There are many shops empty in various places. I think these are the kinds of things the OP was thinking about.

And, dare I say it, the exact kinds of places that I wouldn't touch with a barge pole!

At least one of these bars (Eden Bar) was a successful business providing a living for 3 owners and 2 staff, until the landlord suddenly decided to double the key money and lease when it came up again last year. At the time we all thought it was because they had got a better offer from someone, but there it still sits, another business ruined purely because of the greed of landlords who are basically farmer's children with no business sense of any kind and dollar signs in their eyes.

It's fair to say that the reason that most of these bars are for sale is not because business has gotten worse (Although a lot of them went to the wall after the Floods/Volcano/Redshirts triple whammies last year), but because the landlords have increased the lease prices on the existing tenants and forced them out. Thai landlords would rather have their properties sit empty than lose face by negotiating a lower price than they originally demanded.

Edited April 7, 2012 by ydraw

[jamesbrock]

A few bars (and others) for sale in Lamai. Not an exhaustive list by any means. There are many shops empty in various places. I think these are the kinds of things the OP was thinking about.

And, dare I say it, the exact kinds of places that I wouldn't touch with a barge pole!

At least one of these bars (Eden Bar) was a successful business providing a living for 3 owners and 2 staff, until the landlord suddenly decided to double the key money and lease when it came up again last year. At the time we all thought it was because they had got a better offer from someone, but there it still sits, another business ruined purely because of the greed of landlords who are basically farmer's children with no business sense of any kind and dollar signs in their eyes.

It's fair to say that the reason that most of these bars are for sale is not because business has gotten worse (Although a lot of them went to the wall after the Floods/Volcano/Redshirts triple whammies last year), but because the landlords have increased the lease prices on the existing tenants and forced them out. Thai landlords would rather have their properties sit empty than lose face by negotiating a lower price than they originally demanded.

How sadly true your words are.

On my first visit to Fisherman's Village last year with a visiting mate and his daughter, we walked up to an empty fish-spa and enquired about the prices. They were 250 baht per person; my mate, who had lived on Samui for seven years before returning to Melbourne seven years ago, says to me, "watch this" and suggested 500 baht for the three of us; to which the woman summarily refused. Knowing it was pointless, he tried to explain that 500 baht is better than zero baht, and it wouldn't cost her one satang for us to sit there, but she did falter so we walked away. And thus was my introduction to Thai business logic!

We walked past a few more times that night, and each time the place was empty.

[BusyBee123]

A few bars (and others) for sale in Lamai. Not an exhaustive list by any means. There are many shops empty in various places. I think these are the kinds of things the OP was thinking about.

And, dare I say it, the exact kinds of places that I wouldn't touch with a barge pole!

At least one of these bars (Eden Bar) was a successful business providing a living for 3 owners and 2 staff, until the landlord suddenly decided to double the key money and lease when it came up again last year. At the time we all thought it was because they had got a better offer from someone, but there it still sits, another business ruined purely because of the greed of landlords who are basically farmer's children with no business sense of any kind and dollar signs in their eyes.

It's fair to say that the reason that most of these bars are for sale is not because business has gotten worse (Although a lot of them went to the wall after the Floods/Volcano/Redshirts triple whammies last year), but because the landlords have increased the lease prices on the existing tenants and forced them out. Thai landlords would rather have their properties sit empty than lose face by negotiating a lower price than they originally demanded.

How sadly true your words are.

On my first visit to Fisherman's Village last year with a visiting mate and his daughter, we walked up to an empty fish-spa and enquired about the prices. They were 250 baht per person; my mate, who had lived on Samui for seven years before returning to Melbourne seven years ago, says to me, "watch this" and suggested 500 baht for the three of us; to which the woman summarily refused. Knowing it was pointless, he tried to explain that 500 baht is better than zero baht, and it wouldn't cost her one satang for us to sit there, but she did falter so we walked away. And thus was my introduction to Thai business logic!

We walked past a few more times that night, and each time the place was empty.

well that logic is ridiculous, if i walked into a car dealers and asked to buy 3 cars for the price of 2, he/she would simply say no, no loss of face just what a stupid offer. In india i have noticed they now have 'fixed price' signs so they dont have to deal with Del Boys, if you dont like the price just move on. If it isn't logical in your head consider why thailand has a better economy than America and the whole of Europe then say who the stupid ones are,

[bradleythebuyer]

Don't you guys think that market forces will eventually defeat this faulty thai business logic and the prices will come back down and prospective bar owners will be able to contract around these key price increases and unfavorable conditions? Goodbye Deustchland seemed to have prime real estate and a decent cult following but everytime i went there, the owners seemed like they were doing me a favor by taking my order and seemed annoyed that I wanted to order dinner instead of just getting a drink. A friend told me that they were part of some German TV show or something, but it seemed extremely inefficient that they were closed for lunch and for weeks at a time.

[itishothere]

Don't you guys think that market forces will eventually defeat this faulty thai business logic and the prices will come back down and prospective bar owners will be able to contract around these key price increases and unfavorable conditions?

Eventually yes. I guess the economists would call it purchasing power parity. But as long as tourists arrive here and perceive goods etc to be cheap, they will overpay if they have no choice. And they are not given that choice. Countless bars change hands to people who compare the price to what they would pay back home. We have a long way to go before prices are comparable. Every arriving flight has someone who thinks they can make a go of it and is prepared to pay more. Bar sellers usually only have to sit and wait for them to come along.

In the fish spa example, I am pretty sure that the next day there will have been people paying the full price thinking they got a bargain. And in the taxi business, it is the same. And look at it from the Thai perspective; which would you rather do? Drive around all day like a headless chicken collecting ten THB 100 fares, or sit or your ar#e chatting with you mates and then leisurely do 3 trips before afternoon siesta time and make the same money?

[bradleythebuyer]

From what I understood, the taxi, tuk-tuks and motorbike taxis in Samui aren't a free market system though right?. Aren't they all run by some kind of mafia that prohibits them from going below a certain price? The taxi drivers were always very eager to put me on a tuk tuk when I tried haggling over chump change.

The fish spa example is pretty weird too because it costs the establishment nothing to accomidate an extra customer. The only downside for them is that word will quickly spread and would-be full price payers will also demand a discount. A couple of massueses told me that many shops work together to regulate prices, pool staff and refer clients to each other so they can collectively reap the most money from the tourists instead of each of them trying to outcompete one another. This sounds plausable to me.

I guess you are right about tourists catching the Thailand addiction and buying a bar on a whim, but with the recession there must have been less and less of these types of people.

[ydraw]

well that logic is ridiculous, if i walked into a car dealers and asked to buy 3 cars for the price of 2, he/she would simply say no, no loss of face just what a stupid offer.

Renting a property is not at all like buying a car. For one thing, the car dealer is not given the car for free. He has to buy it from the manufacturer. So there is a floor price he can sell it for and still turn a profit. Not only that, but if he doesn't sell the car today, there is always next week, or next month to sell it. Cars are not a perishable good.

Renting a property is much different, it is a perishable good. If I cannot find a renter for my property for this week, that money just disappears. It's not like I can ever recoup the loss I made by not renting it. For the same reason, hotels and airlines often sell off remaining rooms/seats cheaply at the last minute to try and recoup something. If I have a house that I want to rent for $500pw but don't get any takers at that price, the smart thing to do would be to reduce the price, because $300pw is more than $0pw.

In the particular case of Lamai, you have a situation where you've got a bunch of Thais who are mostly related to each other who own the entire town. They don't need to work, they are filthy rich by Thai standards thanks to their once worthless coconut plantation suddenly becoming a desirable beach resort. The families who own the beachfront property inherited it from their parents, and they got the beachfront stuff because it was no good for growing coconuts. None of them have ever worked a day in their life and they have no need for money, all they care about is face, and about the worst way to lose face in Thailand is to accede to the demands of a Farang.

Don't you guys think that market forces will eventually defeat this faulty thai business logic and the prices will come back down and prospective bar owners will be able to contract around these key price increases and unfavorable conditions?

Market forces only exist where there is a market. It's not possible for Farangs to own land in Thailand, and there is hardly any chance of a court ruling in a Farang's favor in a contract dispute, therefore they will always be at the mercy of landlords. Running a business where your operating costs could triple overnight with no notice is not anyone's idea of a good time.

Edited April 7, 2012 by ydraw

[bradleythebuyer]

This may be a foolish question, but is there a market to purchase bars instead of leasing or renting them? Are the property taxes or maintainance fees high?

[ydraw]

It's not possible for non-thais to own land in Thailand.

[ydraw]

If it isn't logical in your head consider why thailand has a better economy than America and the whole of Europe then say who the stupid ones are

If you believe that I have a bar to sell you.

Thailand is a minnow economy by world standards. The average GDP per capita is $5,200, compared to America which you apparently believe is worse, which has a GDP per capita of $48,000, and the EU $35,500. Thailand is desperately poor by world standards, and the laws against foreign investment are a big part of the reason why.

So I'll say it: The stupid ones are the Thais.

Edited April 7, 2012 by ydraw

[bradleythebuyer]

It makes more sense now. Maybe if Thailand keeps putting up 4-7% annual gdp growth numbers (unlikely), they might ease up on the protectionism. The collective pot for them will get bigger if more people feel sale investing in their country, and eventually globalization will catch up to them and their kids or grandkids will realize that.

[itishothere]

From what I understood, the taxi, tuk-tuks and motorbike taxis in Samui aren't a free market system though right?. Aren't they all run by some kind of mafia that prohibits them from going below a certain price? The taxi drivers were always very eager to put me on a tuk tuk when I tried haggling over chump change.

I would agree the economy of Samui is unique. It is highly unregulated and very much controlled by a limited number of people/entitites. And dominated by buyers who are tourists, with a generally higher level of disposable income than the local population. So yes, market forces will not have the same effect here.

But I still think that until prices are comparable, buyers will not have much impact. Yes, a taxi fare here is relatively high, but still generally less than back where the tourist comes from. And so they pay up. If the 'mafia' set the price at double what people would pay at home, then they would go out of business, because the market either would refuse to pay, or rent a car etc. The market would eventually dictate the price. (As far as the locals are concerned, the Thais seldom use the taxis anyway, so effectively they have gone out of business in the Thai part of the market.)

Food pricing over the years here has become much 'fairer'. The likes of Tesco, BigC and 7-11 have made that happen. This, I think, is an example where the buyers have to some degree controlled the market.

Of course, add to that the lack of land ownership, the rules for employing Thais in your business, the limitations etc etc and it is all very complicated.

But, back to the bar buying idea, if a tourist from the west sees it for sale at U$20,000 and thinks that it is cheap because he would have to pay at least $100,000 for same thing back home, he isn't going to bother too much if the price goes up to U$25,000 is he? Only when he has been here a couple of years will he perhaps understand that the business is not worth that. But the buyers of bars on Samui, are generally people who do not already live here. So the price can be lifted to U$30,000 next time and probably still sell. And on, and on, and on ......

Maybe/perhaps/I think.

[jamesbrock]

well that logic is ridiculous, if i walked into a car dealers and asked to buy 3 cars for the price of 2, he/she would simply say no, no loss of face just what a stupid offer. In india i have noticed they now have 'fixed price' signs so they dont have to deal with Del Boys, if you dont like the price just move on. If it isn't logical in your head consider why thailand has a better economy than America and the whole of Europe then say who the stupid ones are,

No, your analogy is ridiculous! As ydraw says, the car dealer has to pay for all his cars, therefore he makes a direct loss selling three for the price of two; the fish-spa lady's costs are the same no matter how many people are dangling their feet in the water. She went home that night 500 baht poorer out of pure stupidity.

The fish spa example is pretty weird too because it costs the establishment nothing to accomidate an extra customer. The only downside for them is that word will quickly spread and would-be full price payers will also demand a discount.

While that is possible, it is not so much as 'demanding' a discount, rather than haggling - which is almost expected in touristy areas such as that. You'd be a fool if you went up and bought your Leo singlet from any of the street vendors in Chaweng and blithely paid full price (even if you were only saving a buck!).

But, back to the bar buying idea, if a tourist from the west sees it for sale at U$20,000 and thinks that it is cheap because he would have to pay at least $100,000 for same thing back home, he isn't going to bother too much if the price goes up to U$25,000 is he? Only when he has been here a couple of years will he perhaps understand that the business is not worth that. But the buyers of bars on Samui, are generally people who do not already live here. So the price can be lifted to U$30,000 next time and probably still sell. And on, and on, and on ......

Maybe/perhaps/I think.

Yeah, I do have a point there - it takes some time to adjust to the baht, so when you first get here and you buy a Singha for 100 baht, you're texting your friends back home bragging at how cheap the beer is; after the adjustment occurs, you wouldn't go back to a place that sells them for 80! (Another example could be the full rack of ribs at Bondi - initially, you're amazed you can get such a meal for under $15.00; afterwards you're castigated for daring to be such a spendthrift!).

In my initial months here, I went and looked at a place here in Lamai - not a bar, but a cafe/restaurant - and at 2,000,000 baht would have bought it had the terms been better, (and the customers he said were regulars ever showed up again - the place is empty 99% of the time); now, after the adjustment (and of course several months of watching) I wouldn't pay 300,000 for it. It is still for sale, although the price has been taken off the ad on Baht & Sold, and still open, but must be losing a shit-ton of money every month! But that the free market for you: he wants X, I want to pay Y; he loses money every month, I move on and continue livin' the dream...

Edited April 8, 2012 by jamesbrock

[itishothere]

I wouldn't pay 300,000 for it.

This is a key point for me. YOU wouldn't pay that. But Fred Loadsadosh, in seat 17A from BKK to USM might think it is a snip at 1,000,000. Over the years this is how the market has worked. It is the newbie Fred Loadsadosh who has been the buyer for 20+years. Newbie to Samui, probably Thailand, likely also newbie to business generally, and most probably bars specifically.

Another plane has just landed at USM; I feel like I can almost guarantee that there will be at least one person walking to the baggage reclaim as I type, who, by the end of the week, will have wondered what it is like to live in paradise running a bar. And there is also one Thai landlord, sat twiddling his thumbs, looking at land and a business that has cost him nothing, just waiting patiently.