Elite Card Could Face Closure

[percy2]

If it was evenly reasonably secure right now I would still go for it.

Cheers

but I'm just interested - what is your criteria for determining whether it is " reasonably secure " or not ?

If its termination was not being discussed in the papers on a weekly basis and "D" day as it were was not next Monday.

More or less the situation TE was in before the coup

Cheers

[Aussietraveller]

Lets do some quick sums.

1700 people X 1,000,000 Baht = 1,700,000,000 Baht income (1.7 Billion)

130 Employees X 15,000 Baht/Month Salary (just a guess for the sake of averages) = 1,950,000 Baht/Month in Salaries.

23,400,000 annual Salary expenditure.

I am not sure how long this thing has been running, say 3 years.

Salaries for 3 years 70,200,000.

If salaries comprise 10% of costs then total expenditure would be 702,000,000

Seems on these figures that there is about 1 Billion Baht gone somewhere else.

If this gig is not profitable, i am not sure why?????

[dr_Pat_Pong]

Monday is D-Day for struggling Elite Card

The future of the Elite Card, a pet project of former prime minister Thaksin Shinawatra intended to attract affluent tourists, is expected to be decided on Monday. Tourism and Sports Minister Suvit Yodmani will be presented with two options for the future of Thailand Privilege Card Co (TPC), the government-owned company set up to market the Elite Card.

The first option is to dissolve the company and the second is to continue it but with a clearer financial plan and closer supervision by the ministry to ensure that it could generate income.

http://www.bangkokpost.com/Business/22Dec2006_biz46.php

They work on christmas day !

25 December is a normal business day in Thailand.

[midas]

Lets do some quick sums.

1700 people X 1,000,000 Baht = 1,700,000,000 Baht income (1.7 Billion)

130 Employees X 15,000 Baht/Month Salary (just a guess for the sake of averages) = 1,950,000 Baht/Month in Salaries.

23,400,000 annual Salary expenditure.

I am not sure how long this thing has been running, say 3 years.

Salaries for 3 years 70,200,000.

If salaries comprise 10% of costs then total expenditure would be 702,000,000

Seems on these figures that there is about 1 Billion Baht gone somewhere else.

If this gig is not profitable, i am not sure why?????

But hang on a minute - who says the 1700 people who currently have one of these

cards all paid for them ? From numerous earlier threads regarding this subject-

I understood many of these cards were given away - I'm sure someone on this forum

would be able to comment on how many of the 1700 actually generated revenue ?

[keenok]

wouldnt like to guess what their costs are ,but dont forget ,they are ongoing costs.if there are no new members theres no new income.unless they are trying to fund there costs from interest alone. it is and was always going to be a lame duck ,in my opinion.

[midas]

wouldnt like to guess what their costs are ,but dont forget ,they are ongoing costs.if there are no new members theres no new income.unless they are trying to fund there costs from interest alone. it is and was always going to be a lame duck ,in my opinion.

keenok - it's precisely this point that has always amazed me

I'm suspicious of any scheme where money is collected upfront but without

ongoing income to pay their overheads. Even if it had been a resounding

success -i would still have had doubts - but in this case even with

the support of an " entrepreneurial " PM - they have still only managed

a whimper - so I can't imagine what rabbit they will be to pull from the hat

now to reignite this whole thing

[sriracha john]

Lets do some quick sums.

1700 people X 1,000,000 Baht = 1,700,000,000 Baht income (1.7 Billion)

130 Employees X 15,000 Baht/Month Salary (just a guess for the sake of averages) = 1,950,000 Baht/Month in Salaries.

23,400,000 annual Salary expenditure.

I am not sure how long this thing has been running, say 3 years.

Salaries for 3 years 70,200,000.

If salaries comprise 10% of costs then total expenditure would be 702,000,000

Seems on these figures that there is about 1 Billion Baht gone somewhere else.

If this gig is not profitable, i am not sure why?????

But hang on a minute - who says the 1700 people who currently have one of these

cards all paid for them ? From numerous earlier threads regarding this subject-

I understood many of these cards were given away - I'm sure someone on this forum

would be able to comment on how many of the 1700 actually generated revenue ?

That's part of the problem. No one really DOES know how many honorary cards were issued and how many were paid for. The Program certainly has never produced the numbers and the media has been unable to get a straight answer to that question. The whole program's inner workings are shrouded in mystery, enigma, and doubt.

[cdnvic]

mystery, enigma, and doubt.

That's a complicated way to spell corruption and bull$hit.

[womble]

Scrapping Elite Card could cost B10bn

Agents say image would suffer too

Mrs Soontaree said the estimate of 10 billion baht in damage was based on the return of fees worth 2.16 billion baht to existing members, 210 million baht from total investments by distribution partners, the loss of 33 million baht over the last four months because of unclear policy direction, and estimated future losses over the next three years of 3.99 billion baht.

Aktiv currently oversees eight countries and two territories. It signed up 29 members in 2003, rising to 224 in 2004, 430 in 2005 and 650 this year.

The company expects to have a total of 3,424 members over the next three years.

Mr Thaksin had given TPC a target of one million members by 2008, but so far fewer than 2,000 cards have been sold.

How can this be?? Most cards were given away, so why do they have to refund everybody?

These figures have been grossly inflated.

Edited December 24, 2006 by womble

[robint]

Refunds - In LOS are you mad, thats completely against the Kultural mindset especially for Foreigners

Do you notice how often that word is used in a pejorative sense

Only around 2000 signed up (so they said - I wonder how many freebies were sent to high rollers)

[qualtrough]

Perhaps some of those who received cards for free will now be eligible for a refund. Refunds to 'fictitious' members might be in the cards as well. Sort of like the VAT refund scandal a few years back. Might have been the plan all along, who knows?

[xbusman]

I have a hard time believing that refunds are due. The few individuals who purchased them are fully aware of the risk involved with putting their money in Thailand and the little opportunity (read that as NONE) for recourse.

The government could well close the whole program and keep just the special visa alive as well as some lounge in the airport for the big boys and still be within the guidelines of the program. Written in perfect Thai on every sheet of advertisement is "Benefits subject to change without notice" and also in smaller print "som nam na"

[Dupont]

Didn't I read that they owed CNN or somebody millions of dollars for advertising? What became of that.

[Johpa]

That's part of the problem. No one really DOES know how many honorary cards were issued and how many were paid for. The Program certainly has never produced the numbers and the media has been unable to get a straight answer to that question. The whole program's inner workings are shrouded in mystery, enigma, and doubt.

There was little doubt from the beginning that the Elite Card program was a a front for providing tea money to Thaksin to grease the access to him and some of his cronies for the foreign business community. Certainly many cards were given away to make it look legitimate, just as free tickets to high society social events are given away to models to provide window dressing to such galas. The business community saw the elite card as just the price of doing business and gaining access while any actual benefit was simply a minor bonus. Most of the cost of these cards was written off as a business expense the same year they were purchased and a refund would not be sought after as access to influential government people is still desired.

Of course quite a few private people outside the corporate sector actually fell for the advertising scheme thinking that the Elite card was a legitimate program that would be a good long term investment. The naivete of some of these neo-sahibs relative to Thai culture never ceases to amaze me.

[billrussell]

If the program closes, will they give refunds?

Back in some Western countries, if a private company goes bankrupt, 'card holders' such as these would be unsecured creditors, and probably get nothing. But if it's a government company, how can it go bankrupt unless the entire national treasury is emptied?

Not quite true, at least as far as the U.S. is concerned. There are many private U.S. company's that are owned by the government, either totally or partially.

If they are not backed by the "full faith and credit" of the U.S. then technically they can walk away, if they wanted to.

[Jingthing]

How about a class action suit against Thaksin? There is blood in that old turnip!

[The Skipper]

How about a class action suit against Thaksin? There is blood in that old turnip!

You cannot get blood from a Turnip but you can put a Turnips a*s in jail.

[sriracha john]

Of course quite a few private people outside the corporate sector actually fell for the advertising scheme thinking that the Elite card was a legitimate program that would be a good long term investment. The naivete of some of these neo-sahibs relative to Thai culture never ceases to amaze me.

An excellent summation of the Elite Card's 56-thread history on thaivisa.

I am equally bewildered and it never ceased to amaze me that I've had to post the realities of its multiple shortcomings on most of these threads. Finally, it seems to be sinking in. It's time to finally bury this thoroughly well-flogged dead horse.

A good benefit to the closure of the program would be its disappearance as the topic of yet another thread.

[atlastaname]

Its a shame because this idea could have been a runaway success if it had only been handled differently.

Starting from the basic assumption that the whole thing is about money and attracting wealthy people from around the world to apply and give them very good benefits , the answer is simple. Make it just that ...a money thing. Set a sensible start price that people would pay (3 million baht would be about right) and then have NO other restrictions on who can join . If you have the money you're in . All this rubbish about not having previous convictions , and not this and not that , ....that is why it failed. Make it purely about the money , and they would have had a great success.

For a country obsessed with money and pareting the foreigners with as much of it as they can , i never never understand why they then start restricting who can come to Thailand and who can stay here. If i were ruling and i wanted to enrich the country , i would abolish all restrictions and just make it about the money. If you have it you are in , permanently (at a hefty annual charge of course). Its just good business sense.

Of course people will wail on about the problems of letting everyone in may cause, but if its just about the money and noithing else, then my idea is a winner.

[dr_Pat_Pong]

It seems as though the TPC will survive ( at least for the time being )

[sriracha john]

UPDATE

Troubled Elite Card must raise fees to be viable

Higher fees and better management are needed if the Elite Card programme for affluent foreign tourists and executives is to succeed, its operators have been told. The conclusions are contained in a study done by Thammasat University for state-owned Thailand Privilege Card Co (TPC), which has struggled to find members since its inception three years ago. Some valuable incentives should be reduced to cut costs, according to Tatre Jantarakolica, of the university's Economic Research Training Centre. If the lifetime membership fee was increased to 1.8 million baht, he said, TPC could make 13 billion baht by the 15th year of operation, based on 10,000 members. Profits could jump to more than 20 billion baht in the 20th year if membership reached 20,000. The study is part of TPC's plan to reform the Elite Card programme after it failed to achieve the target set earlier. The programme was created by former PM Thaksin Shinawatra in order to boost tourism revenue. The scheme has fallen far short of expectations and is proving expensive for the government. Its original plan was to attract as many as one million cardholders by 2008 but currently it has only about 2,000 members. Mr Tatre said that if the number of members did not grow beyond the current 2,000, TPC would face costs as high as six billion baht.

Continued here:

http://www.bangkokpost.com/Business/25May2007_biz37.php

Edited May 25, 2007 by sriracha john

[danone]

elite card paid huge commission - around 20-30 percent - to "agents" selling the card.

basically it was a pyramid system. selling cards could get you quite rich, especially the handling "leaders" at the company.

for the company itself not much was left.

Edited May 25, 2007 by danone

[monty]

The most important and first thing you learn in any business school in Thailand:

If you do not have enough business/customers to cover your expenses, you have to increase the price of your product ASAP, to make up for the shortfall in cash....

Higher fees are needed

Also, to increase profit even more, just give the customer less for the increased fee.

Some valuable incentives should be reduced to cut costs

I guess the only thing which they have right is following:

and better management are needed

Here they make one major mistake:

If the lifetime membership fee was increased to 1.8 million baht, he said, TPC could make 13 billion baht by the 15th year of operation

Should be followed by: And if increased to 3.6 Million Baht, profits will soar to 26 Billion Baht in 15 years!

[LoveDaBlues]

If the program closes, will they give refunds?

The people who matter didn't pay for the card to start with.

The suckers rest, they don't matter, no refund.

[sriracha john]

often repeated...

Trouble finding buyers? Raise the price.

[p_brownstone]

Dr. Tatre Jantarakolica appears to be a quite well known, or at least a quite well published, Economist.

That said I can not envisage any accounting model where an enterprise with no Income apart from an initial payment for “membership” and with totally unknown Liabilities for significant future expenses (because the liabilities extend for the life of the “member” which is obviously impossible to know) can expect to declare a “profit” in any year.

Patrick

[ttthailand]

It is no surprise to me that a card like this would be a failure. Thailand has a government that should not be for sell to an elitest group. Why should the rich be able to buy special rights and other people stand in line. I understand the golf etc but the visa, what's next for sell ?

[TokyoT]

I understand the golf etc but the visa, what's next for sell ?

I don’t know maybe the women?

[Flow]

I really wonder how some of these farangs who sell these cards to their fellow countymen feel now that closure of the whole scheme seems imminent. A few of these farangs have their offices on Silom.

Shame on you, conning other farangs into buying something as dodgy as the Thai Elite card

Edited May 25, 2007 by Flow

[Kerryd]

The most important and first thing you learn in any business school in Thailand:

If you do not have enough business/customers to cover your expenses, you have to increase the price of your product ASAP, to make up for the shortfall in cash....

I'd laugh if it wasn't for the fact that it does seem to be true.

I recall a certain club in Pattaya (Thai owned). Very little business, shows that couldn't compete with other nearby venues, little in the way of promotion (i.e. advertising, sign-girls, ect), and high drink prices.

A little later, faced with even fewer customers, they raised the drink prices !

I think they lasted a total of two months.

Someone else re-opened the club, and from what I saw, the only change was to (slightly) lower the drink prices. I'm sure that sometime over the next couple of months they raised them again in the face of fewer and fewer customers. They closed after about 4 months.

When I saw the bit about being advised to raise the already high price of the Elite Card even higher, I did chuckle. They could barely give them away, and of the quoted "2,000" members, many got theirs for free ! A million members by 2008 ?!?!?!! (I thought drugs were illegal in Thailand)

Lower the price (significantly), add a yearly membership fee, promote the 5 year visa aspect more, as well as the airport/immigration fast-tracking and courtesy services, and instead of "freebies" at spas/golf courses, maybe offer steep discounts or reduced membership fees. (oh yeah, get better clarification on the 1 rai of land scheme. Perhaps, instead of ownership, offer legally-binding, back-to-back 30 year leases or something ?).