Is the guest house sector crashing?

Bulldozer Dawn · September 10, 2014

My guess is yes.

The large hotels that accommadate zero dollar bus tourists from Russia and (increasingly) China are limping along.

But the smaller guest houses that rely on non bus tourists are going broke.

"But...but...but BD is a scare monger. Post some proof or lock the thread...blah blah blah."

Here are the NEW listings for guest houses for sale in Patong from just the last TWO days:

http://www.bahtsold.com/view/12-rooms-plus-restaurant-on-nanai-rd-patong-g0031--185431?doqs=1

http://www.bahtsold.com/view/brand-new-phuket-hotel-with-swimming-pool-to-lease-185362?doqs=1

http://www.bahtsold.com/view/8-rooms-with-restaurant-patong-beach-g0023--185346?doqs=1

http://www.bahtsold.com/view/17-rooms-restaurant-and-atm-patong-g0036--185212?doqs=1

http://www.bahtsold.com/view/patong-beach-guest-house-in-management-185033?doqs=1

http://www.bahtsold.com/view/21-rooms-near-the-beach-at-patong-g0032--184995?doqs=1

http://www.bahtsold.com/view/patong-beach-guest-house-in-management-184894?doqs=1

http://www.bahtsold.com/view/20-rooms-plus-restaurant-sub-lease-patong-phuket-g0034--184890?doqs=1

Edited September 10, 2014 by Bulldozer Dawn

thaibeachlovers · September 10, 2014

I don't know if they are, but the lying scum at the guest houses that advertise low prices and then hit you with high prices when you turn up deserve to go broke.

CodyB · September 10, 2014

When I went to Chiang Mai in January of 2012, it was possible to get a Double Room in a guesthouse for 150 baht. That's with AC. It was an ok room as well.

My point being, everywhere in Thailand outside of BKK and a select few island destinations are over supplied with cheap guesthouses. Even in peak season there never seems to be more than a 60% occupancy rate.

Phuket's been slipping quite considerably since my first visit in 2011, it does not surprise me that people are selling their businesses.

thaibeachlovers · September 10, 2014

When I went to Chiang Mai in January of 2012, it was possible to get a Double Room in a guesthouse for 150 baht. That's with AC. It was an ok room as well.

My point being, everywhere in Thailand outside of BKK and a select few island destinations are over supplied with cheap guesthouses. Even in peak season there never seems to be more than a 60% occupancy rate.

Phuket's been slipping quite considerably since my first visit in 2011, it does not surprise me that people are selling their businesses.

I think that people are catching on that Phuket is not a desirable destination any more.

JDGRUEN · September 10, 2014

Over built - over priced - under used ... and not paying attention to external factors - such as political strife - Junta - Martial Law ... Visa Crackdowns --- all add up to - low season is very low -- high season may be the new low season ... My opinion - in every seaside - island resort - too many units of all kinds - way over built - all going after the same customer base... A silent developing bubble that may burst relatively soon...

There are so many types of accommodations - crossing lines of definitions as to what they are - rental bungalows, guest houses, boutique hotels/resorts, conventional hotels, non conventional hotels, motel like structures, 'resorts' yeah right - what is that supposed to mean... other places that look like Motel Six... with pools - without pools.. pools that are wading pools but advertised as regular pools, hostels, dorm rooms, backpacker rooms.... All this means it is nearly impossible to measure anything ... But in my opinion -- too many rooms chasing too few tourists - low season - high season - peak season - what ever that is...

Edited September 10, 2014 by JDGRUEN

Ulysses G. · September 10, 2014

When I went to Chiang Mai in January of 2012, it was possible to get a Double Room in a guesthouse for 150 baht. That's with AC. It was an ok room as well.

I find that very difficult to believe, unless there were some sort of strange circumstances. About 200 baht for a clean, single with bath and NO aircon is a pretty good deal here.

pgrahmm · September 10, 2014

All leases - no purchasing....no possiblity to "buy" anything - I'm guessing the uncertainty of the political climate of that area has a fair amount to do with prospective business losses - along with the fact that the area itself has had less than favorable reviews/stories/news/pricing/crime rate for quite some time......also possible that some of the "favorite sons" of years past and the accompanying privileges seem to be evaporating as well.......

thairastawoman · September 10, 2014

This is just the beginning of the economic problems that will have to face the dreamers in charge.

This country is a dictatorship forever as they have no chance to me elected when you see that they are fuxxing the business of so many people who were supporting them...

khunjamesjohnson · September 10, 2014

I have overseas friends that have contacted me and are worried about the military takeover.

The news looks real bad over there.

I mean, how many leaders have gotten 100% of the vote?

Saddam Hussein and people like that.

Scares people away.

n210mp · September 11, 2014

Could be that the holidaymakers and even the regular sexpots are just not coming n the numbers they used to, Simples really!

And Phukit, who with a brain would want to stay there with all the terrible publicity it attracts?

shirtless · September 11, 2014

Simple , oversupply , fewer tourists , bad image, are all affecting the tourist industry, no magic bullet will fix this.

Swiss1960 · September 11, 2014

Yes... guest house industry is crashing... Baht is crashing against all major currencies... Investors taking out all money, because they get so much interest everywhere else... tourist industry is crashing despite the fact that tourist industry worldwide is surging up... even the corruption industry is about to crash because of the General... taxi / beach vendor / jet ski businesses are all crashing... all despite the fact that worldwide all economies are going up and up and up...

Minor adjustments is all you see here, small Thai business operators without business plans and not a single Baht of contingency available are the ones who try to get out...

Waiting for the next "CRASH" cry on TV...

daveAustin · September 11, 2014

When I went to Chiang Mai in January of 2012, it was possible to get a Double Room in a guesthouse for 150 baht. That's with AC. It was an ok room as well.
I find that very difficult to believe, unless there were some sort of strange circumstances. About 200 baht for a clean, single with bath and NO aircon is a pretty good deal here.

Yep, that is bs unless perhaps we're talking a hole in the middle of nowhere. An aircon room in CM in high season starts around 3-400.

thailiketoo · September 11, 2014

Over built - over priced - under used ... and not paying attention to external factors - such as political strife - Junta - Martial Law ... Visa Crackdowns --- all add up to - low season is very low -- high season may be the new low season ... My opinion - in every seaside - island resort - too many units of all kinds - way over built - all going after the same customer base... A silent developing bubble that may burst relatively soon...

There are so many types of accommodations - crossing lines of definitions as to what they are - rental bungalows, guest houses, boutique hotels/resorts, conventional hotels, non conventional hotels, motel like structures, 'resorts' yeah right - what is that supposed to mean... other places that look like Motel Six... with pools - without pools.. pools that are wading pools but advertised as regular pools, hostels, dorm rooms, backpacker rooms.... All this means it is nearly impossible to measure anything ... But in my opinion -- too many rooms chasing too few tourists - low season - high season - peak season - what ever that is...

No one really needs your opinion. You wrote, "All this means it is nearly impossible to measure anything."

No it's not. Hotel occupancy rates by month 2014 and by region and by foreign tourist are available at: http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=624&language=ENG

Hotel occupancy and the average room rates are posted every month. One can extrapolate the guest house occupancy from those.

If you think the Bank of Thailand is making up the numbers then the SET and World bank and IMF are also wrong. Going there is no win argument.

Edited September 11, 2014 by thailiketoo

KarenBravo · September 11, 2014

Baht is crashing against all major currencies...

You sure about that?

Have you seen the latest exchange rates? The Baht is stronger against ALL currencies that it was a few months ago.

Loptr · September 11, 2014

Yes... guest house industry is crashing... Baht is crashing against all major currencies... Investors taking out all money, because they get so much interest everywhere else... tourist industry is crashing despite the fact that tourist industry worldwide is surging up... even the corruption industry is about to crash because of the General... taxi / beach vendor / jet ski businesses are all crashing... all despite the fact that worldwide all economies are going up and up and up...

Minor adjustments is all you see here, small Thai business operators without business plans and not a single Baht of contingency available are the ones who try to get out...

Waiting for the next "CRASH" cry on TV...

Best to remove the rose colored glasses...

steelepulse · September 11, 2014

Looks to me like one new broker decides to list any and all properties he can get a hold of, while the other listings are are from brokers that have been around for a while. It's the same everywhere in the world, some people want to sell their holdings for whatever reason.

OP, how many guesthouses do you think in total are in Phuket and what is the percentage of guesthouses for sale? There are literally at least 1000 guesthouses in Phuket, so this percentage for sale is well within the norm for any type of property market anywhere in the world.

Swiss1960 · September 11, 2014

Baht is crashing against all major currencies...

You sure about that?

Have you seen the latest exchange rates? The Baht is stronger against ALL currencies that it was a few months ago.

... and I thought the "Sarcasm" sign was clear over my post... next time, will add it for you...

Swiss1960 · September 11, 2014

Yes... guest house industry is crashing... Baht is crashing against all major currencies... Investors taking out all money, because they get so much interest everywhere else... tourist industry is crashing despite the fact that tourist industry worldwide is surging up... even the corruption industry is about to crash because of the General... taxi / beach vendor / jet ski businesses are all crashing... all despite the fact that worldwide all economies are going up and up and up...

Minor adjustments is all you see here, small Thai business operators without business plans and not a single Baht of contingency available are the ones who try to get out...

Waiting for the next "CRASH" cry on TV...

Best to remove the rose colored glasses...

And why do you think that your statistic which goes to the End of 2012 should be of any relevance to the current situation in the second half of 2014 and ongoing? Have you read the news about the European Economy outlook being downgraded over the last months? We are talking about worldwide adjustments and a few guesthouses closing or being up for sale in Thailand is just nothing that could in anyway be interpreted as a "crash".

jpeg · September 11, 2014

Yes... guest house industry is crashing... Baht is crashing against all major currencies... Investors taking out all money, because they get so much interest everywhere else... tourist industry is crashing despite the fact that tourist industry worldwide is surging up... even the corruption industry is about to crash because of the General... taxi / beach vendor / jet ski businesses are all crashing... all despite the fact that worldwide all economies are going up and up and up...

Minor adjustments is all you see here, small Thai business operators without business plans and not a single Baht of contingency available are the ones who try to get out...

Waiting for the next "CRASH" cry on TV...

Best to remove the rose colored glasses...

Um, he was being sarcastic ...

Boxclever · September 11, 2014

A thriving business for farangs in Thailand is to do up a large house shop, call it a guest house and then sell it as a business to other farangs, I'd say 80-90% of listings are this way.

bermondburi · September 11, 2014

Not exactly related too guest houses as such but the whole market has changed with the like of sites such as airBnB etc. I recently stayed in a 2 bedroom apartment right by Thaksin Bridge, it was done out in the latest furnishings, spacious, had a 50m infinity pool plus other pools set in lovely grounds right on the river front. The cost was only 2500 a night. I would say that higher end hotels would be hurting as well with deals like this. I also recently rented a villa in Krabi, nice grounds, 2 bedroom, and only 2000 a night. The hotel industry needs to wake up, the game has changed, and people are only a click away from never staying in a hotel again.

willyumiii · September 11, 2014

It sounds like a lot of expert expats on this subject!

So the prices of good rooms should be going down if places are struggling to stay in business...no??

Some guesthouses are very nice.

Where can the best deals be found?

I have friends flying in an a month or so, and the less you spend on a room, the more you can spend on "fun"!

Come on expert expats! How about a list???

JDGRUEN · September 11, 2014

If you believe published occupancy rates... then up to you... I have been physically on nearly every street in Ao Nang closely looking at properties for over 3 months ... and 25% is tops for an occupancy rate except for within a few hundred meters of the beach road ... and they are building more as I have seen some boarded up and some looking abandoned...

Kwasaki · September 11, 2014

It sounds like a lot of expert expats on this subject!

So the prices of good rooms should be going down if places are struggling to stay in business...no??

Some guesthouses are very nice.

Where can the best deals be found?

I have friends flying in an a month or so, and the less you spend on a room, the more you can spend on "fun"!

Come on expert expats! How about a list???

Two recent ones for me from memory save time for people on holiday looking.

CM Lanathai guesthouse next to night bazaar 350 fan & 550 air-con,don't know where the one is for 150.

Phuket, Baantonsai Garden Resort. 186 Nanai Rd. Patong Beach. 550 low season. 700 high season I think.

Stayed in loads of good cheap end ones all over Thailand but can't find the cards now just when you need them.

thailiketoo · September 11, 2014

If you believe published occupancy rates... then up to you... I have been physically on nearly every street in Ao Nang closely looking at properties for over 3 months ... and 25% is tops for an occupancy rate except for within a few hundred meters of the beach road ... and they are building more as I have seen some boarded up and some looking abandoned...

The economic world including the Harvard Business school and the London School of economics believes the Bank of Thailand occupancy rates. http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=624&language=ENG

You know better? Aw come on. It is impossible to have an intelligent conversation unless we agree on certain conventions. If your anecdotal guess of hotel occupancy rates is to be held on the same level of credibility as the Bank of Thailand economic indicators they you will have to find someone else to talk to.