Patong is dead.

[sanemax]

Its the same in Chiang Mai .

Shops, bars , restaurants open and close regularly .

A new bar opens, no customers, closes six months later .

Someone else comes along and decides it would be a good idea to open a bar.

No customers and closes six months later .

Rinse and repeat

 

[NamKangMan]

8 hours ago, sanemax said:

Its the same in Chiang Mai .

Shops, bars , restaurants open and close regularly .

A new bar opens, no customers, closes six months later .

Someone else comes along and decides it would be a good idea to open a bar.

No customers and closes six months later .

Rinse and repeat

 

 

 

I haven't been to Chiang Mai for some time, but it is well documented that the majority of tourists now coming to Phuket are Chinese.  

 

In general, the Chinese do not go to bars, do not pay bar fines, do not fall in love with a Thai prostitute, therefore, will not be sending money to Issan for a sick buffalo, and certainly will not be returning to China to resign from their employment, sell all there possessions, and return to Phuket to open a bar, salon, restaurant, cafe etc etc.  

 

So, in the near future, there will be bars closing, but not as many people looking to open, as there were in the past, so they will stay closed.

 

Prime example, all the vacant  bars in the new Tiger complex.

[Lashay]

1 hour ago, NamKangMan said:

.

Prime example, all the vacant  bars in the new Tiger complex.

Those bars are now pretty much unsellable as everyone knows whole thing is getting knocked down within 2 years to make way for central shopping mall.

 

Not that any past rows 3-4 were good investments anyway, place was to big with wrong layout to draw people to the back.

[Bulldozer Dawn]

Spoke to my old girlfriend today who works for very wealthy Thais who own multiple villa properties.  Until recently the villas were booked solid by chinese.  My ex has been making a lot of money via service charge.  This morning she showed me that the villas were completely empty.  Across the board cancellations of chinese bookings.  She thinks that there is some sort of payback happening in response to the Thai Governments move to bar Chinese driving in and the repeatedly failure to address fundmental bus, and boating safety.

Edited October 12, 2016 by Bulldozer Dawn

[NamKangMan]

On 12/10/2016 at 1:26 AM, Lashay said:

Those bars are now pretty much unsellable as everyone knows whole thing is getting knocked down within 2 years to make way for central shopping mall.

 

Not that any past rows 3-4 were good investments anyway, place was to big with wrong layout to draw people to the back.

 

"Those bars are now pretty much unsellable" - the emphasis is on "NOW unsellable." 

 

If all the bars were rented, I doubt the Tiger Group would have either sold, or redeveloped.  Last I heard, and that was a while ago, and from a bar owner towards the back, it was 70,000 baht a month rent.  Good money for the landlord, for a pile of bricks that's call "a bar." 

 

"place was to big with wrong layout to draw people to the back." - the new Tiger is pretty much the same layout as the old Tiger - a square grid of beer bars. 

 

Sure, the front bars make more money, but then again, they pay higher rent.  Many owners in the old Tiger did ok, but that was a few years ago. 

 

Phuket lost a big slice of the western market, many of which, frequented these bars. 

 

If what you say is true, and a shopping mall is to be built, it's interesting that they think they can swap drinkers and mongers for shoppers, especially with dying Jungceylon only a few hundred meters away.  Maybe it will be a dried seaweed, dried durian flake and latex shopping mall.  

 

In my opinion, they can keep building whatever they like, and lose money along the way, but until they seriously address why the tourists with money to spend are shunning Phuket, the local economy here will continue to contract, held to ransom by the very forces that are overseeing Phuket's own demise. 

[NamKangMan]

1 hour ago, Bulldozer Dawn said:

Spoke to my old girlfriend today who works for very wealthy Thais who own multiple villa properties.  Until recently the villas were booked solid by chinese.  My ex has been making a lot of money via service charge.  This morning she showed me that the villas were completely empty.  Across the board cancellations of chinese bookings.  She thinks that there is some sort of payback happening in response to the Thai Governments move to bar Chinese driving in and the repeatedly failure to address fundmental bus, and boating safety.

 

 

As mentioned in a previous post, the Pattaya business community is claiming a possible 50% decline.

 

If Phuket loses the Chinese market - where to from there, for Phuket????

 

 

[madmitch]

10 hours ago, Bulldozer Dawn said:

Spoke to my old girlfriend today who works for very wealthy Thais who own multiple villa properties.  Until recently the villas were booked solid by chinese.  My ex has been making a lot of money via service charge.  This morning she showed me that the villas were completely empty.  Across the board cancellations of chinese bookings.  She thinks that there is some sort of payback happening in response to the Thai Governments move to bar Chinese driving in and the repeatedly failure to address fundmental bus, and boating safety.

We've accommodated many Chinese and Thai tour guides in the past year or so and they also state that work is drying up and isn't expected to improve. 

[GiantFan]

Chinese tourism minister recently stated that next years outbound numbers will be similar to this years.  So it is unlikely thailand will see the percentage increases from prior years.  Next years drop off can probably be offset by an uptick in arrivals from Russia.  The problem is that the government financial prognosticators build in large increases every year.  That low hanging fruit has been picked.  Rough waters ahead.

Edited October 13, 2016 by GiantFan
dupe

[xylophone]

11 hours ago, NamKangMan said:

Last I heard, and that was a while ago, and from a bar owner towards the back, it was 70,000 baht a month rent.

 

I think that maybe a little on the high side NKM as a friend of mine had a bar towards the back and although his key money was higher than other bars out on Bangla, his rent was around 50,000 baht per month, mind you that was about four years ago so who knows what they are now?

 

As for the place being knocked down, well I hadn't heard that, but I did hear that a Central shopping centre was going to be built alongside of it where the old hotel used to be many years ago and where that failed foodcourt and shops used to be, these being demolished now. Having said that, although some demolition work has gotten underway, nothing else seems to have moved so what now?

 

A friend of mine who has a lady friend acquaintance who works in one of the bars under Tiger has said that the place is now an absolute rip-off what with high-priced lady drinks and 1500 baht bar fines, and is not well frequented. In addition, this same lady, whom he has known for about six years, tried to rip him off for drinks to the tune of a few thousand baht and he basically argued a little, got the bill reduced, paid it to save a big argument and told her that he would never go to that bar again and that he didn't wish to be associated with her anymore.

 

It would appear that many bars are struggling now, and as the owner of probably the most successful nightclub in Patong said to me just yesterday, in truth many of them have been struggling for years and just managing to get by one way or another, but he believes that this has also come to an end and that the future for many bars is not rosy at all, but then we've been discussing that very point here for some time now.

 

But then as another poster from Chiang Mai said, "rinse and repeat seems to be the name of the game"......... so Patong could be in a downward spiral until the fools cease to come and/or their money dries up! 

[SooKee]

I think the difference with Chiang Mai is that distinct things have happened here which have all but killed it off in terms of a nightlife destination, most notably being the rigidly enforced closure of bars at 12 since just a few years back.  The nightlife scene in Chiang Mai is a shadow of its former self I'm told but even that, frankly, paled compared to BKK / Phuket / Patts.  The debate about whether some might think it better that way is largely irrelevant here.  Sure there are some places that stay open beyond 12 and there is a lively (enough) Thai style entertainment scene here with clubs / bars like Infinity, Maldives, Tha Wandaeng and Mandalay, but not much else.  

 

The other thing I think that distinguishes CM compared to the other places is that there's LOADS of places to go if you want to go and eat but scarce little else if you want to do something else after, save as I say, for the Thai style places or some dull / dingy bars with farang 'bands' playing the same old repertoire day in day out and with less atmosphere than Moonbase Alpha.  It's pretty much all eateries that have drink and entertainment if you exclude the backpacker / student haunts.  I guess the kill off in the trade over the last few years encourages people little to open anywhere different given that the Thai's, by and large, enjoy the Thai style places.  I do too.  But there's NOTHING else.

 

Phuket arguably has seen less by way of specific and notable events that could be seen as directly responsible to the (perceived - for those that still think it's valid to debate that there isn't one) decline in numbers, save for, maybe, the sunbed/beach-zoning fiasco.  Otherwise it seems to be attributable to general tourist fatigue with all the problems are are alluded to above.  For me, all those things plus the total nuking of Surin (where you could at least go for a night out that wasn't in some pile of bricks and concrete (that they call bars), a coyote or a go-go bar, getting scowled at for not buying a lady drink for some dog and her 3 chums, or for frowning at the 1,500 baht bar fines, for those inclined to indulge.

 

I half contemplated moving back to Phuket next year but after the last trip there, nah.  Next stop, BKK :)  Excellent public transport, variety in terms of nightlife, amazing choice of restaurants and great hub to travel from.  Sure it has it's downsides, but at the moment they are less of a concern to me than the downsides that affect Phuket currently (and indeed CM - but that would be another thread).

Edited October 13, 2016 by SooKee

[KarenBravo]

At least Surin residents now don't have to listen to a thumping base at two in the morning.........

[SooKee]

9 minutes ago, KarenBravo said:

At least Surin residents now don't have to listen to a thumping base at two in the morning.........

 

Indeed, but I tend to check out where I plan to live before I rent / buy there.  More fool them if they didn't.  Pretty rich to fail to conduct due diligence and then bitch about the noise post event.  Bit like buying / renting next to the airport and whining about aircraft noise.  And Catch was going for what, 10 years?  Might as well close down everywhere if that is seen as a valid argument.  It would benefit the residents of Patong if they shut down everywhere there given that the noise there drifts to many of the residential condos, and WAY beyond 2 am in some cases. 

 

Bimi used to close down around 9-10 with the nightlife shifting to Catch which only stayed open after 00:30 at the weekend and even then wasn't going much beyond 2:00.

Edited October 13, 2016 by SooKee

[KarenBravo]

They did check it out.

When there were only Thai restaurants on the beach.

 

Best thing that ever happened to Surin, though, they need to clean it up.

[Bulldozer Dawn]

2 minutes ago, KarenBravo said:

They did check it out.

When there were only Thai restaurants on the beach.

 

Best thing that ever happened to Surin, though, they need to clean it up.

 

Yah the beach is clean.  Now if they can just get the fecal coliform count of the seawater down below biohazard levels every thing will be just jim dandy.

[SooKee]

15 minutes ago, KarenBravo said:

They did check it out.

When there were only Thai restaurants on the beach.

 

Best thing that ever happened to Surin, though, they need to clean it up.

 

S**t happens.  People buy condos with great views (and get other condos or hotels plonked in front of them), buy in quiet districts with no bars and clubs (until they open), buy houses on the basis of existing planning permissions (with no main roads being bulldozed through).  It's affected me in the past, I dare say it will again, we're all NIMBYs in that regard I guess.  The closer you get to tourist destinations the more likelihood for your paradise to get spoiled.  I dare say there are thousands with similar complaints and 'justifications' that just wish all those pesky other people would just go away.  Sadly though, we don't get 'All development stops here' clauses in our purchase contracts.

 

I'd guess all the Thais that had thriving businesses, small and large, that sprung up around Catch / Bimi / Zazada and the other more established places, and that made their living selling to the crowds those places attracted to the beach both day and night, might feel a bit less positive about what's happened in Surin.  Buy hey, they're only locals, at least your'e OK.

Edited October 13, 2016 by SooKee

[NamKangMan]

3 hours ago, xylophone said:

 

I think that maybe a little on the high side NKM as a friend of mine had a bar towards the back and although his key money was higher than other bars out on Bangla, his rent was around 50,000 baht per month, mind you that was about four years ago so who knows what they are now?

 

As for the place being knocked down, well I hadn't heard that, but I did hear that a Central shopping centre was going to be built alongside of it where the old hotel used to be many years ago and where that failed foodcourt and shops used to be, these being demolished now. Having said that, although some demolition work has gotten underway, nothing else seems to have moved so what now?

 

A friend of mine who has a lady friend acquaintance who works in one of the bars under Tiger has said that the place is now an absolute rip-off what with high-priced lady drinks and 1500 baht bar fines, and is not well frequented. In addition, this same lady, whom he has known for about six years, tried to rip him off for drinks to the tune of a few thousand baht and he basically argued a little, got the bill reduced, paid it to save a big argument and told her that he would never go to that bar again and that he didn't wish to be associated with her anymore.

 

It would appear that many bars are struggling now, and as the owner of probably the most successful nightclub in Patong said to me just yesterday, in truth many of them have been struggling for years and just managing to get by one way or another, but he believes that this has also come to an end and that the future for many bars is not rosy at all, but then we've been discussing that very point here for some time now.

 

But then as another poster from Chiang Mai said, "rinse and repeat seems to be the name of the game"......... so Patong could be in a downward spiral until the fools cease to come and/or their money dries up! 

 

"I think that maybe a little on the high side NKM" - only relaying what he told me, and that was,  "70,000 baht a month."  

 

I immediately did some quick maths in my head, and worked out he would have to sell around 35 to 40 beers a day, everyday, just to cover the rent.  (assuming 100 a beer - it was a few years ago)  Given that the bar is "officially" open between 7pm and 2am, a total of 7 hours a day, that's around 5 to 6 beers for every hour the bar is open. 

 

Then, there are other overheads to pay for. Eg. staff salaries, electric etc. 

 

Then, there is the key money to recoup.

 

Then there is the low season, Buddha Days, and inclement weather/flooding, to contend with.  Not forgetting, Phuket's transport woes.

 

Sure, some people will drink spirits, and some will buy lady drinks and pay bar fines, but for a small pile of bricks,  that's called a bar, as soon as any perspective owner is told "70,000 baht a month" it shouldn't be too hard to work out that a bar that size will not have enough turnover to meet its liabilities, let alone, break even, or turn a small profit. 

 

Hence, the bar closed, and last I heard, the owner returned to his home country to go back to work.

 

"rinse and repeat seems to be the name of the game" - this was "the game" a few years ago.  Landlords were happy to see leases fail, so they could keep key money rolling in from the next newbie with grand ideas. 

 

A bar would close, only to be leased again shortly after.  However, for every 10 small businesses closing now, we are probably only seeing 4 to 5 of them reopen under foreign management.  In many cases now, the landlords keep the doors open and lights on, using cheap Thai staff, whilst trying to lease the premises.  

 

The last two nightclubs on Bangla Road I visited, quite recently, there were more Thai hookers than tourists.  Great for those tourists "in the market" for some company, not so great for the owners.   

[nausea]

The real problem is that we'd get normal Thai girls in these places, where now we don't. I don't need to travel a miilion miles to find a a hooker.

[Bulldozer Dawn]

On 10/13/2016 at 8:14 PM, nausea said:

The real problem is that we'd get normal Thai girls in these places, where now we don't. I don't need to travel a miilion miles to find a a hooker.

This is one of the dumbest posts I have ever read on TV.  NO normal thai girls go out to Bars in Patong.  If you want to meet a normal Thai girl you have to go to a venue in the heart of phuket town. 

 

Tell me, do all these normal Thai girls you used to meet in bars in Patong speak English?

[Bulldozer Dawn]

On 10/13/2016 at 2:43 PM, NamKangMan said:

 

"I think that maybe a little on the high side NKM" - only relaying what he told me, and that was,  "70,000 baht a month."  

 

I immediately did some quick maths in my head, and worked out he would have to sell around 35 to 40 beers a day, everyday, just to cover the rent.  (assuming 100 a beer - it was a few years ago)  Given that the bar is "officially" open between 7pm and 2am, a total of 7 hours a day, that's around 5 to 6 beers for every hour the bar is open. 

 

Then, there are other overheads to pay for. Eg. staff salaries, electric etc. 

 

Then, there is the key money to recoup.

 

Then there is the low season, Buddha Days, and inclement weather/flooding, to contend with.  Not forgetting, Phuket's transport woes.

 

Sure, some people will drink spirits, and some will buy lady drinks and pay bar fines, but for a small pile of bricks,  that's called a bar, as soon as any perspective owner is told "70,000 baht a month" it shouldn't be too hard to work out that a bar that size will not have enough turnover to meet its liabilities, let alone, break even, or turn a small profit. 

 

Hence, the bar closed, and last I heard, the owner returned to his home country to go back to work.

 

"rinse and repeat seems to be the name of the game" - this was "the game" a few years ago.  Landlords were happy to see leases fail, so they could keep key money rolling in from the next newbie with grand ideas. 

 

A bar would close, only to be leased again shortly after.  However, for every 10 small businesses closing now, we are probably only seeing 4 to 5 of them reopen under foreign management.  In many cases now, the landlords keep the doors open and lights on, using cheap Thai staff, whilst trying to lease the premises.  

 

The last two nightclubs on Bangla Road I visited, quite recently, there were more Thai hookers than tourists.  Great for those tourists "in the market" for some company, not so great for the owners.   

NKM, as you well know I am a long time fan of your posts.  However, here you are missing to important key points to the burn and churn key money free for all that used to play out every couple of months on Bangla.

 

Yes rent's were totally unsustainable, that is, even with brisk trade it was near impossible to make a profit.  But the landlord's already knew that.

The key clause in many bangla contracts was that if you didn't open for a brief period then the lease is deemed breached and terminated (along with a forfeit of your key money).

I knew one cashed up french guy fresh off the boat who took on not one but two leases at the back of soi kaitoy. 

He could not get staff.  And without staff he had no customers, who wants to sit on a cement stool at a cement table if there are no pretty girls to look at.  Without staff he couldn't open one of the bars.  Landlord seized it back, kept the massive key money (circa 1.5 mill by memory) then released to the next starry eyed punter.

[NamKangMan]

12 hours ago, Bulldozer Dawn said:

NKM, as you well know I am a long time fan of your posts.  However, here you are missing to important key points to the burn and churn key money free for all that used to play out every couple of months on Bangla.

 

Yes rent's were totally unsustainable, that is, even with brisk trade it was near impossible to make a profit.  But the landlord's already knew that.

The key clause in many bangla contracts was that if you didn't open for a brief period then the lease is deemed breached and terminated (along with a forfeit of your key money).

I knew one cashed up french guy fresh off the boat who took on not one but two leases at the back of soi kaitoy. 

He could not get staff.  And without staff he had no customers, who wants to sit on a cement stool at a cement table if there are no pretty girls to look at.  Without staff he couldn't open one of the bars.  Landlord seized it back, kept the massive key money (circa 1.5 mill by memory) then released to the next starry eyed punter.

 

 

In my opinion, what we are seeing now, and what we will see a lot more of in the future, as leases expire or are terminated, is the amount of "starry eyed punters" are not here in the numbers they used to be.  They have been replaced by cheap Chinese package holiday makers, who are not interested in drinking and Thai prostitutes, or buying a business or property here.

 

I agree with your "churn and burn" comment.  In the past, 10 businesses would shut, with all 10 of them being leased to another "starry eyed punter" a short time later.  Now, for every 10 businesses that shut, we are seeing only about 4 to 5 of them leased to "starry eyed punters" with the others remaining vacant for sometime, and in many case, basically becoming derelict.  Thus, landlords now using cheap Thai staff to keep the doors open and lights on. 

 

"who wants to sit on a cement stool at a cement table" - and I'll add, in the heat, noise, dust, insects and listening to music that's too loud and doesn't cater for all tastes, and paying double the price for drinks than in other parts of Thailand, and 3 to 4 times more than in tourist areas in neighboring countries.  

 

Basically, Bangla Road now offers high prices, with no corresponding increase in facilities and service. 

 

 

[NamKangMan]

On 14/10/2016 at 0:14 AM, nausea said:

The real problem is that we'd get normal Thai girls in these places, where now we don't. I don't need to travel a miilion miles to find a a hooker.

 

 

Can you post your definition of "normal Thai girl?" 

[xylophone]

On 10/15/2016 at 11:31 AM, NamKangMan said:

In my opinion, what we are seeing now, and what we will see a lot more of in the future, as leases expire or are terminated, is the amount of "starry eyed punters" are not here in the numbers they used to be

 

You'd think that would be the case, however this place never ceases to amaze.......the Amigo bar and restaurant which did very little business and then closed, had replaced the Nanai sports bar which also suffered the same fate and so the owner decided not to renew the lease, but I noticed on Thursday last week, it opened again and the for sale/lease sign had been taken down!!!

 

Of course the timing couldn't have been worse and I don't see this one turning a profit either.

 

Further south on Nanai Road, opposite the Chang Residence (the almost always empty hotel) with the newly built restaurant extension which has not been used since it opened many, many months ago, someone has decided to open a bar, in place of the one which closed about five or six weeks ago because it wasn't making any money.

 

Not only that they have incorporated the "roller blind room" (which was some form of gold shop for a short while before that to closed through lack of business) next door into it, to form what looks like a "double bar". And as if to fully confirm that this little area never has been and probably never will be a good spot for business, above this little building is a restaurant which opened for two months and closed due to............yes, that's right!

 

And just 50m away is the thrice closed pharmacy which is now some sort of trinket/jewelry shop which doesn't seem to be doing much at all, alongside a women's clothes shop which has to keep having sales to be able to entice someone to buy something and I can't see that lasting very long.

 

As if to add insult to injury, the little bar next to it struggles for business as does the massage parlour next to that. The thing they all have in common is all these businesses which are doing very little business now, have replaced others which went the same way.

 

When you add these to the other "pending disasters" in Nanai Road, many of which I've already mentioned you get the feeling that lessons should have been learned.

 

On that note I thought back to the good old days of Soi Eric in Bangla Road, which was one of the top Sois in its day and how at the end of its heyday, business was dropping off quite markedly, mostly due to the GFC and demographic shifts, and even then bar owners were struggling to front up with the key money for the next three years and quite a few bars were just left empty because they couldn't afford to pay the rent, let alone soon to be due key money.

 

Then the owner of what was going to be the new Soi, once Eric was demolished, got the bar owners together and laid out his terms for the new bars and initially he wanted nine year leases with accompanying key money. Of course many could not afford this and told him where to stick it and walked away and I do believe that he allowed nine year leases, but with three years key money paid up front, but even then many bar owners could not afford it. 

 

And now look at the whole Bangla scene – – 50% of bars in resurrected Tiger are empty (probably more now); around 30% of bars in new Tiger are either empty or get very little patronage and as I haven't been there for many, many months, this may be a little low; Soi Crocodile has been knocked down for some time now and may never see the light of day again, but then again this Soi had died a death way before its demolition; Soi Sea Dragon has bars in it which are also struggling big time and I know one bar owner who will not be able to afford the key money when it becomes due in a couple of months, and he says others are in the same situation.

 

So back to my point a few paragraphs ago, and also a point I think mentioned by NKM a few posts ago, the days of key money would seem to be at an end if the current trend is anything to go by and one would think that any prospective buyer would do their homework and see that this was the case because not enough money can be made in a bar to justify it, but still they come.............until they don't!

 

[NamKangMan]

18 hours ago, xylophone said:

 

You'd think that would be the case, however this place never ceases to amaze.......the Amigo bar and restaurant which did very little business and then closed, had replaced the Nanai sports bar which also suffered the same fate and so the owner decided not to renew the lease, but I noticed on Thursday last week, it opened again and the for sale/lease sign had been taken down!!!

 

Of course the timing couldn't have been worse and I don't see this one turning a profit either.

 

Further south on Nanai Road, opposite the Chang Residence (the almost always empty hotel) with the newly built restaurant extension which has not been used since it opened many, many months ago, someone has decided to open a bar, in place of the one which closed about five or six weeks ago because it wasn't making any money.

 

Not only that they have incorporated the "roller blind room" (which was some form of gold shop for a short while before that to closed through lack of business) next door into it, to form what looks like a "double bar". And as if to fully confirm that this little area never has been and probably never will be a good spot for business, above this little building is a restaurant which opened for two months and closed due to............yes, that's right!

 

And just 50m away is the thrice closed pharmacy which is now some sort of trinket/jewelry shop which doesn't seem to be doing much at all, alongside a women's clothes shop which has to keep having sales to be able to entice someone to buy something and I can't see that lasting very long.

 

As if to add insult to injury, the little bar next to it struggles for business as does the massage parlour next to that. The thing they all have in common is all these businesses which are doing very little business now, have replaced others which went the same way.

 

When you add these to the other "pending disasters" in Nanai Road, many of which I've already mentioned you get the feeling that lessons should have been learned.

 

On that note I thought back to the good old days of Soi Eric in Bangla Road, which was one of the top Sois in its day and how at the end of its heyday, business was dropping off quite markedly, mostly due to the GFC and demographic shifts, and even then bar owners were struggling to front up with the key money for the next three years and quite a few bars were just left empty because they couldn't afford to pay the rent, let alone soon to be due key money.

 

Then the owner of what was going to be the new Soi, once Eric was demolished, got the bar owners together and laid out his terms for the new bars and initially he wanted nine year leases with accompanying key money. Of course many could not afford this and told him where to stick it and walked away and I do believe that he allowed nine year leases, but with three years key money paid up front, but even then many bar owners could not afford it. 

 

And now look at the whole Bangla scene – – 50% of bars in resurrected Tiger are empty (probably more now); around 30% of bars in new Tiger are either empty or get very little patronage and as I haven't been there for many, many months, this may be a little low; Soi Crocodile has been knocked down for some time now and may never see the light of day again, but then again this Soi had died a death way before its demolition; Soi Sea Dragon has bars in it which are also struggling big time and I know one bar owner who will not be able to afford the key money when it becomes due in a couple of months, and he says others are in the same situation.

 

So back to my point a few paragraphs ago, and also a point I think mentioned by NKM a few posts ago, the days of key money would seem to be at an end if the current trend is anything to go by and one would think that any prospective buyer would do their homework and see that this was the case because not enough money can be made in a bar to justify it, but still they come.............until they don't!

 

 

 

I agree with what you are saying, XP.

 

I am merely pointing out that, as the western tourist market has declined on Phuket, and continues to do so, at a rapid rate, statistics state there will simply be less "starry eyed punters" to appeal to. 

 

As you allude to, there will always be a percentage of fools who will be parted with their money, but, I suggest, that is a decreasing percentage, not because of the availability of information, or the fools ability to control their impulses, but based purely on the decline of western tourists coming to Phuket now. 

 

I suppose, if key money was to end, with perspective buyers entering the business on monthly rent, with a bond, similar to renting an apartment here, that could appeal to another wave of fools, and could revitalize many of the establishments here, but of course, in true Thai style, the monthly rent would increase to make up for the lost key money, which would see the establishment lose money from the first month.  

 

Unless the authorities address the REAL reasons for the decline in western tourists, eventually, and we are starting to see it now, larger, and more established businesses with survive, whilst the smaller businesses with die, resulting in decrease of choice for everyone.

[LivinginKata]

I just finished a very interesting conversation with a long time Bangla bar 'owner'.  He has just paid 21 million baht key money on 3 connected bars (7 million each) and 210 K baht month rent (70 K each).  I expressed astonishment that he can stay in  business given those costs, plus all the staff. He says 150 K baht takings a night would be poor, more like 200 K baht is expected. I completely believe him as I first met him about 12 years ago. He was a young guy. He told me he had just 'bought' a bar in Bangla. I openly laughed at him. Now he has multiple bars in Patong. Today we laughed about our first meeting those many years ago.

 

Mind you he works very hard and is no fool when it comes to running a business. He has many many Thai staff and I know he is very stressed out. My point is that some bar 'owners' are making a lot of money in Patong.

[xylophone]

There probably are a few bar owners making some money, like Kangaroo bar and the likes and it sounds as if your friend could well have the front three bars in new Tiger or indeed similar in resurrected Tiger.

 

No reason to disbelieve him, although in simple terms the nightly takings he is aiming for says that he has to sell about 1700 beers a night!!

 

For me anyway, the main point of this thread is that the majority of bar owners in Patong and indeed many other types of small businesses are struggling, and struggling badly.

[LivinginKata]

10 minutes ago, xylophone said:

 

No reason to disbelieve him, although in simple terms the nightly takings he is aiming for says that he has to sell about 1700 beers a night!!

.

 

You are not counting lady drinks, ring the bell drinks, and the bar fines .... and he does have a lot of 'staff'. It's not all about just beer sales.

 

And I have no idea about his bar locations. I have never ever had a drink in Bangla in my 20 years here. Indeed I can't remember my last night visit to Bangla, must be 10 years ago to show family friends the 'delights' of Patong.

[NamKangMan]

4 hours ago, LivinginKata said:

I just finished a very interesting conversation with a long time Bangla bar 'owner'.  He has just paid 21 million baht key money on 3 connected bars (7 million each) and 210 K baht month rent (70 K each).  I expressed astonishment that he can stay in  business given those costs, plus all the staff. He says 150 K baht takings a night would be poor, more like 200 K baht is expected. I completely believe him as I first met him about 12 years ago. He was a young guy. He told me he had just 'bought' a bar in Bangla. I openly laughed at him. Now he has multiple bars in Patong. Today we laughed about our first meeting those many years ago.

 

Mind you he works very hard and is no fool when it comes to running a business. He has many many Thai staff and I know he is very stressed out. My point is that some bar 'owners' are making a lot of money in Patong.

 

 

Only a "bar" the size of The Aussie Bar on Bangla could boast those sort of takings.  The smaller beer bars are not big enough to cater for enough customers to turn over those figures.  Like XP says, he would have to sell a phenomenal amount of alcohol and / or sex, for those figures, and that's for every hour, of every day of trading.

 

Not even an end of season football squad in a small beer bar would be able to consume that amount of alcohol and live. 

 

Yes, there would be some lady drinks, bell ringers and bar fines, but I still can't see it.  In one of these small beer bars, he just couldn't have enough alcohol, mixers and ice in stock, and have the ability to keep it all refrigerated, to turn over that money. 

 

You mention he has a lot of staff, if he is open from 7pm to 2am, that's 7 hours.  If we divide 200,000 baht by 7 hours, that's 28,571 baht of sales per hour.  The staff would be so busy filling orders, they wouldn't have a chance to have a drink with a customer, and should one be bar fined, the work load for the 28,571 baht per hour in sales increases for the remaining staff, minus the bar fine.  

 

These figures would also blow out with the low season, Buddha Days, election days, rain and flooding etc etc. 

 

A nightclub would see these figures, but I just can't see it in a beer bar.  

 

Perhaps the best seller on his menu is the white powder special. 

[Lashay]

Not hard to know who this bar owner is by the description if you know anything about Bangla bars and their owners.

 

I would say that total is total across all 3, no way is it per bar (even with at least one being open daytime). 

 

Quick back of napkin calculations 

 

200k say 200 days per year: 40 million per year. Even at rather low profit margin of 25% that's 10 million per year.

 

Factoring in high season peaks (if who I think I would say his main bar alone is probably regularly clearing 100k per day during a lot of high season) his profits could be anything up to 30-50% higher

 

This is one thing many don't realise about Bangla bars, while many bar owners now sink within 1-2 years, those who have been around for 3 years plus, have established clients and actually work their bar as a long term business, might be down in profits but are still making decent money.

 

[LivinginKata]

1 hour ago, Lashay said:

<snip>

Quick back of napkin calculations 

 

200k say 200 days per year: 40 million per year. Even at rather low profit margin of 25% that's 10 million per year.

 

 

 

But think about the per annum cost of key money and rent = about 10 million baht. Staff costs and booze costs. You really think there is 10 million baht profit ? I suppose it's possible ... 

[Lashay]

Yep that's factored in

 

40 million sales, supply costs about 25%: -10 million 

 

21 million key money/3: 7 million per year

 

210k rent per month*12: 2.5 million per year 

 

Total to landlord per year: 9.5 million

 

Leaves 10 million for base salarys and misc (would actually say really is lot less)

 

Remainer profit: 10-11 million

 

Overall decent, though landlord is taking far to big a chunk, which is why so many starting bar owners without established customer base (thus unable to do as well) sink within first few years

 

 

Edited October 18, 2016 by Lashay