Published : 17 Nov 2020 at 15:00
Covid-19 has had the most monumental economic impact on modern society since the stock market crash of 1929. The virus has isolated individuals, regions and nations from the rest of the world and effectively shut down tourism at nearly every level. Thailand has coped well in halting the spread of the virus within the Kingdom and has some of the lowest Covid-19 case numbers in the world. However, with Thailand enjoying a large portion of its GDP coming from tourism, the lack of international visitors due to the restricted borders has had significant impact on businesses across the country.
Over the last 20-years, Krabi has transformed from being a predominantly agricultural province to a key tourist destination with main income transitioning from palm, rubber and fruit. On the back of the rise of tourist numbers, many businesses have opened over this time hastened by the opening of Krabi airport in 2006. Ao Nang, the tourism hub of Krabi, transformed during the late 2000’s from being closed in the low-season months (May – October) to year-round opening due to a boom in Asian tourism and arrival of the Chinese markets.
During this boom-time, many new businesses have emerged with older businesses growing and transforming with higher quality hotels, bars, restaurants etc. Other business areas such as hotels and holiday rental villas have also had to cope with the changing times and adoption of online self-hosting solutions such as AirBNB altered the reservation landscape.
Covid-19 has had the most significant negative economic impact on Krabi businesses. Prior to the coronavirus outbreak there were over 4-million tourist arrivals per year (http://minisite.airports.go.th/home.php?site=krabi) split between 75% foreign tourists and 25% domestic Thai tourists (Krabi Hotel Association). This figure is now reduced to only domestic arrivals with numbers only in the 1000’s.
In a report from local news in November 2020 it was estimated that in Ao Nang alone, approximately 200 business had closed with many never to reopen. This has affected the very lives of business owners, many of whom have grown their business over such a long period of growth and now find it difficult to either make ends meet or adapt their business to “the new normal” with limited domestic visitor numbers.
For now, some businesses are attempting to either stay-open or reopen based on this small amount of tourism which seems to follow Thai public holidays or at weekends. At these times many hotels, villas and restaurants are clamoring for custom with everywhere becoming empty again when people return home to work. Whilst income is welcome from this limited supply, in the long-term it is not a sustainable model for most businesses and many will continue to close due to the dilution of custom with more businesses trying to reopen and patron numbers continuing to dwindle due to further economic pressures.
Government plans to allow limited tourism seem to be badly planned and slow to be implemented and with a 14-day quarantine period being requested at only government approved facilities, most holiday- makers that can travel out of their own country are not at all attracted by what Thailand currently offers and plan to wait.
The announcement of new and effective COVID vaccines has boosted hopes around the world and markets have been buoyant on this news. All of Thailand also prays that this vaccine will be available soon opening-up border once again replacing the new-normal with some semblance of the old-normal.
From the start and all through the COVID crisis, investment into Thailand and Krabi property has nosedived but there is a small market of ‘bargain-hunters’ looking for COVID-stricken property owners selling at a discount to release equity. This could be to either just to make ends meet and tide a seller over the COVID crisis, or to shift their portfolio from property into other markets which are currently making money such as stocks and shares. Some of the buyers of these properties are also foreign and buy property using a Thai proxy due to closed borders. COVID stricken hotels have also been up for grabs at reduced prices and this has not gone unnoticed from savvy investors. The vaccine hopes have also resulted in investors buying up property.
Rental markets have suffered massively and gone from a very lucrative investment to a burden on villa owners who are forced to maintain properties without tenants and rental income. Those who can rent-out are pressured into giving large discounts from standard rates. Similarly, holiday rental villas and condominiums are also struggling in direct competition to the hotel rooms that have remained open which offer many facilities at highly reduced rates. However, some groups and families still look for a private villa property to stay away from the crowds and any risk of COVID infection.
2020 has been a particularly tough year for all businesses. For those that can dig-in and hold-on, there is light at the end of the tunnel in the form of vaccines against COVID which should allow borders to slowly open. I foresee 2021 to be an equally challenging year but with a much clearer direction if the vaccine news holds allowing business to make plans of reopening and growing again.
With reduced tourist numbers, people coming out of lockdown I can see a strong initial bounce of tourism, initially from Asian and Chinese markets, followed by a steady influx of western tourists returning.
The property markets will still be slow to recover but with prices being held low this should encourage some buyers for either a personal property, investment or mixture of both encouraged by Thailand’s “safe-haven” status acquired during COVID times.
Written by Wayne H Lucas, Managing Director - Klasana Property
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Published : 28 Nov 2018 at 04:00
SET-listed Apex Development Plc will launch four new projects with hotel rooms and villas for sale in Krabi and Phuket worth a combined 12 billion baht in 2019 to capitalise on booming tourism in the two provinces.
Chief executive Pongphan Sampawakoop said the company will continue focusing on hotels and residences in major destinations because the tourism industry has strong growth.
"The tourism sector grew by 9-10% during 2017-18," Mr Pongphan said. "It will keep growing this year to 36 million tourist arrivals from 33 million last year, despite the slump of the past few months in Chinese tourists. They are resuming now."
The company will develop hotel rooms and villas for sale at the same site, preferring Krabi and Phuket to Hua Hin because the first two are global tourist destinations.
Hua Hin is popular among local tourists and has had a lot of residential projects launched in the market.
Three of the new projects Apex will launch next year will be in Krabi on Long Beach (Hat Yao). Each site will have hotel rooms operated by an international hotel chain and villas for sale that will also be managed by a hotel chain.
Each villa will have two storeys. Each storey will have one unit sold as a condo unit title deed to facilitate foreign buying.
Apex is in talks with international hotel chains on management contracts. The deal with the first chain will be inked next month, and the other two in the first quarter of 2019.
The first project will launch in February 2019. It will occupy a 70-rai plot of Long Beach, comprising 240 hotel rooms worth 2 billion baht and 120 villas worth 1.5 billion baht.
The second and third projects will launch in the third quarter. Each will be located on a 60-rai site with the same development concept as the first. Sales value of the villas will be about 3 billion baht at each site.
"Four- and five-star hotels in Krabi will replace those in Phuket in the near future, as Phuket is nearly full," Mr Pongphan said.
In Phuket, Apex will launch a project at a 14-rai site on Mai Khao Beach in February 2019. It will have 179 hotel rooms worth 1.9 billion baht to be completed in the fourth quarter of 2021 and 58 villas for sale worth 1.2 billion baht.
The company has 20 villas remaining for sale at Sheraton Phuket Grand Bay in Ao Po, Phuket. Launched in late 2016, the 66-rai project has 107 villas worth 2.23 billion baht and 180 hotel rooms worth 1.8 billion baht.
Last week Apex launched villas for sale at Club Med Krabi Resort & The Residences. The project will sit on a 100-rai plot of Krabi's Long Beach, comprising 300 hotel rooms worth 2.25 billion baht. There are also 58 villas for sale worth 1 billion baht.
APEX shares closed yesterday on the Stock Exchange of Thailand at 0.20 baht, unchanged, in trade worth 90,000 baht.
Story coutesy of Bangkok Post
