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Pattaya: Grim picture for future of resort as post pandemic optimism dries up

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57 minutes ago, newnative said:

     Sorry your particular businesses didn't work out in Pattaya.  You didn't mention what your businesses were but perhaps they were victims of the changing tourist demographics the past four or five years with the massive shift to Asian and Indian tourists.  Pattaya in some cases ended up with too many of some businesses and not enough of others.  The result is the same thing that happens anywhere in the World--some businesses no longer attracting sufficient customers close and other different businesses open to serve new markets.    For you, business was bad but that doesn't automatically translate to business being bad overall.  Likewise, some areas declined with the demographic shift and other areas, such as north Pattaya, did much better.            

     Obviously, I'm not going to change your mind by giving you yet another example by mentioning there is a big, new project going up right across the street from Central Festival and you're not going to change my mind with your opinion that business in Pattaya was declining pre-covid--although I will certainly agree that some business segments in oversupply in Pattaya might not have been doing well.  Nothing new or earthshaking there; that's usually always the case anywhere at anytime--America currently with its oversupply of malls, for instance.   Good luck in your new endeavors.  

I think Gazzpa mentioned in an earlier post his business was unconnected to tourism which is what I found interesting. I view the length of Thepprasit Road as my barometer of the local micro economy outside of the entertainment zone, lots of industrial and construction supply companies, professional services etc, a good mix of businesses. Throughout last year the number of closed units gathered pace and to me it was the most obvious sign of a general downturn starting. Otber people I spoke to were commenting on the number of For Sale/Rent signs appearing in different areas, again not bar/restaurants but more commercial outlets. 

I remember reading an economic article during that time which highlighted a fairly drastic decline in foreign industrial capital investment and renewal flowing into Thailand, particularly by Japanese manufacturers, since the military took over the effects of which were just beginning to feed through to the wider economy. I seriously think what we are seeing in Pattaya and further afield in Thailand is a deeper economic recession not just restricted to the tourism sector. 

 

To a certain extent the government has masked the decline by embarking on vast public spending projects which as we know tend to benefit those in positions of public and private sector influence. 

 

 

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On 9/8/2020 at 2:13 PM, Oldie said:

The situation was the opposite with these zero Baht tours. Despite many Chinese tourists the Thais did not get much money. Here in Pattaya the Chinese even built a fake temple to get the money from things like amulets they sold there to their Chinese customers. 

 

The thais do get much money from the "zero baht tours"..............Not Joe Somchai,but the very few in the upper echelons.And if they are happy that`s all that matter,unfortunately.

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On 9/8/2020 at 10:17 AM, Walker88 said:

If I was the Economics or Finance Minister of Thailand I would have trouble sleeping at night.

 

In my mind would be graphs of the rise in debt---corporate and household---over the last ten years, bank exposure, and the likelihood that asset prices (otherwise known as collateral for all those bank loans) are under pressure.

 

In Bangkok one can see billboards advertising 50% price cuts on under-construction condos by major developers. Not good. Real estate prices are set on the margin, which means prices are set by the weakest hands, which is to say those with the most leverage. Those with less leverage (if these aren't unicorns) are still going to feel it, because real estate is a wasting asset. Even if one is debt free, there are still property taxes and maintenance costs, so a building with no tenant or one in arrears still has a cash outflow.

 

Leveraged owners with no tenants (businesses gone bust) will be turning the keys over to banks, and banks are not going to want to own a huge portfolio of real estate. They will want to sell it.

 

The govt had introduced debt amnesty, but that has expired. The debt didn't go away, of course, but borrowers were allowed to skip payments and banks did not have to account for the lack of incoming debt servicing. Yesterday an official said it might be time to put this debt moratorium back on, which is to say, "Let's kick the can down the road again, because there is no other way to deal with it".

 

I have seen some commentary that 'this isn't as bad as 1997'. I question that, as it is not only an entirely different problem, it is also worldwide, not just regional like 1997. Yes, there are likely to be bargains galore in property, but timing will be critical. Buying something down 50% looks good until its price is down 75%.

 

Thailand does have a decent pile of foreign reserves. I suspect it is going to have to go to that well, and soon, if it insists on maintaining the same level of vigilance against the virus by keeping the borders closed. Absent some return to normalcy, the banking system's capital cushion is going to be under pressure in the next few months as more businesses fail and leveraged borrowers---even homeowners who put zero down on that new car---feel the pain of economic decline. Banks are increasingly likely to need some sort of bailout. Accounting rules can be changed, by mathematics is the Sword of Damocles that cannot be denied.

 

This article is about Pattaya, because the pain hits it first and hardest owing to its dependence on foreign tourism. The wider Thai economy is hardly any more immune to Covid-driven decline. Some truly difficult decisions are coming.

I am not rich but I'd be all for some changes like allowing foriengers to borrow without needing to have work permit as I'd buy a condo at this time. Hell with being here for atleast another 5 years feels like far better then renting as at least my money is going towards something worthwhile and not being wasted. I'd also stretch a bit more and get a big bike as well as bkk traffic is beyond a nightmare now for a car and when weather is good I want to be on a big bike for the traffic. If course have to make budget cuts somewhere to take on the extra debt at that point but would be worth it's while in the long run. Well 1 the condo payments would be more like switching from rent to payments. Then the bike would be extra to adjust for. 

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14 hours ago, Oldie said:

There are still very many ladies standing around in the empty bars and in the meantime some look extremely horny. 

Go get 'em.....

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7 hours ago, kinyara said:

I think Gazzpa mentioned in an earlier post his business was unconnected to tourism which is what I found interesting. I view the length of Thepprasit Road as my barometer of the local micro economy outside of the entertainment zone, lots of industrial and construction supply companies, professional services etc, a good mix of businesses. Throughout last year the number of closed units gathered pace and to me it was the most obvious sign of a general downturn starting. Otber people I spoke to were commenting on the number of For Sale/Rent signs appearing in different areas, again not bar/restaurants but more commercial outlets. 

I remember reading an economic article during that time which highlighted a fairly drastic decline in foreign industrial capital investment and renewal flowing into Thailand, particularly by Japanese manufacturers, since the military took over the effects of which were just beginning to feed through to the wider economy. I seriously think what we are seeing in Pattaya and further afield in Thailand is a deeper economic recession not just restricted to the tourism sector. 

 

To a certain extent the government has masked the decline by embarking on vast public spending projects which as we know tend to benefit those in positions of public and private sector influence. 

 

 

     I'm not sure one street can be an accurate economic gauge for a large city but it's interesting you picked Thepprasit.  When my partner and I moved to Pattaya in 2010 we shopped on Thepprasit quite often.  We were renovating shell condos at the View Talays and we bought paint at that paint store near the Thappraya intersection.  We used some of the furniture shops to make kitchen cabinets, vanities, and other furniture.  An air conditioning shop to install the aircons.  We would stop at this hardware store or that one to buy plumbing and electrical stuff.  We found our contractor on Thepprasit to do the renovation work.  And so on.  

     Flashforward 10 years and after reading your post I found myself wondering when was the last time we shopped on Thepprasit.  I realized that over the years our shopping habits had changed and now, instead of buying our paint on Thepprasit, we go to Home Pro, Thai Watsadu, or Boonthavorn.  Parking is easier, we can use a credit card, and the shopping environment is better.  Same for our plumbing, electrical, and other household needs.  One stop shopping for everything we used to go store to store for on Thepprasit.  

     Now, when we use a handyman or need a service like aircon repair, my Thai partner finds the workers somewhere on the internet--not sure where--and we don't actually go to their store--if they even have a store now.  Perhaps they do but it might be located in a lower rent area than Thepprasit.  Likely we are not the only ones who have changed our shopping habits.  I think Thailand is experiencing what many nations have already gone through--small Mom and Pop stores are being  replaced by larger businesses.    

     Perhaps another change for Thepprasit is this.   Gone are the View Talay shell condo days when there were literally thousands of VT condo shells that needed to be finished and Thepprasit shops to do the work were nearby and handy to them.  Now, new condos come finished and sometimes furnished, as well.  Maybe fewer customers for the Thepprasit shops.  Also, when new kitchen cabinets are needed, instead of going to a wood furniture maker on Thepprasit, some customers are likely using Boonthavorn, Home Pro,  or IKEA's wider selection of choices.  

    It all goes into the constant churn of business with some stores constantly closing and other stores constantly opening.  The closed shops on Thepprasit point to products and services that customers are either no longer needing or finding elsewhere in other stores or by other means of obtaining them--such as on-line.  The rise of Lazada and others this past decade has certainly had an impact.  I just remembered the last time I shopped on Thepprasit.  My partner and I took 2 bar stools to have the seats re-covered and we went to that upholstery shop near the Outlet Mall.  That's a needed service not easily done on-line that will likely--and hopefully--endure, but maybe not always on Thepprasit.  

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18 hours ago, Oldie said:

There are still very many ladies standing around in the empty bars and in the meantime some look extremely horny. 

Horny or hungry?

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21 hours ago, newnative said:

     I'm not sure one street can be an accurate economic gauge for a large city but it's interesting you picked Thepprasit.  When my partner and I moved to Pattaya in 2010 we shopped on Thepprasit quite often.  We were renovating shell condos at the View Talays and we bought paint at that paint store near the Thappraya intersection.  We used some of the furniture shops to make kitchen cabinets, vanities, and other furniture.  An air conditioning shop to install the aircons.  We would stop at this hardware store or that one to buy plumbing and electrical stuff.  We found our contractor on Thepprasit to do the renovation work.  And so on.  

     Flashforward 10 years and after reading your post I found myself wondering when was the last time we shopped on Thepprasit.  I realized that over the years our shopping habits had changed and now, instead of buying our paint on Thepprasit, we go to Home Pro, Thai Watsadu, or Boonthavorn.  Parking is easier, we can use a credit card, and the shopping environment is better.  Same for our plumbing, electrical, and other household needs.  One stop shopping for everything we used to go store to store for on Thepprasit.  

     Now, when we use a handyman or need a service like aircon repair, my Thai partner finds the workers somewhere on the internet--not sure where--and we don't actually go to their store--if they even have a store now.  Perhaps they do but it might be located in a lower rent area than Thepprasit.  Likely we are not the only ones who have changed our shopping habits.  I think Thailand is experiencing what many nations have already gone through--small Mom and Pop stores are being  replaced by larger businesses.    

     Perhaps another change for Thepprasit is this.   Gone are the View Talay shell condo days when there were literally thousands of VT condo shells that needed to be finished and Thepprasit shops to do the work were nearby and handy to them.  Now, new condos come finished and sometimes furnished, as well.  Maybe fewer customers for the Thepprasit shops.  Also, when new kitchen cabinets are needed, instead of going to a wood furniture maker on Thepprasit, some customers are likely using Boonthavorn, Home Pro,  or IKEA's wider selection of choices.  

    It all goes into the constant churn of business with some stores constantly closing and other stores constantly opening.  The closed shops on Thepprasit point to products and services that customers are either no longer needing or finding elsewhere in other stores or by other means of obtaining them--such as on-line.  The rise of Lazada and others this past decade has certainly had an impact.  I just remembered the last time I shopped on Thepprasit.  My partner and I took 2 bar stools to have the seats re-covered and we went to that upholstery shop near the Outlet Mall.  That's a needed service not easily done on-line that will likely--and hopefully--endure, but maybe not always on Thepprasit.  

Ah I see- no economic downturn in Thailand then!  It's all good.

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19 minutes ago, mommysboy said:

Ah I see- no economic downturn in Thailand then!  It's all good.

   2020--of course things are bad.  2019, I don't think they were in Pattaya, pre-covid.  Some businesses closed, many other different ones opened--that's something that's always happening everywhere.  Some areas of the city boomed and others may have lost some luster--again normal.  Thepprasit, the street mentioned by the poster, did likely have some small Mom and Pop stores close due to a variety of factors, including the surge of shopping on the internet, big stores taking their business, changes in demographics, and so on.  A small hardware store closes because shoppers are now going to Home Pro and other larger stores.  Nothing new.  There was not a single small hardware store left in the town where I lived in the US--but there was a big Home Depot.  Ditto for bookstores after the rise of Amazon and kindles.  Business is ever in motion.

   But, back to Thepprasit.  On the same street where this or that small store closed, other businesses and projects opened.  D'Luck Theater.  Colosseum. The big fresh market expanded.  Supalai Mare highrise condo.  A big, fancy spa.  A new PTT petrol station.  If it gets off the ground, a huge, 3 building mega condo highrise is planned for just off of Thepprasit.  Just a few examples.  It's interesting that the things I mentioned opening are all rather internet-proof.  Hard to order from Lazada a live theatrical experience with real elephants to be delivered to your door.  

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On 9/8/2020 at 2:54 PM, cardinalblue said:

Heaven Above go go motivates me to come....

closed permanently🤕

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On 9/13/2020 at 12:37 AM, globalhouse said:

The banks will manage to leverage this pandemic somehow, someway. The government can't afford them to fail. 

Banks are a business.  I doubt there would be a bail out here, but would not be surprised to see a bail in. 

 

It's a risky time for a foreigner to have 800k in a Thai bank.  

 

Edited by Leaver

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On 9/12/2020 at 6:37 PM, globalhouse said:

The banks will manage to leverage this pandemic somehow, someway. The government can't afford them to fail. 

Don't be so sure. The UK government bailed out the banks to the tune of a reported GBP 500bn in 2008. 

 

Global C19 lockdown is 8 notches worse than the 2008 credit crunch and there's no such thing as a magic money tree.  

 

Fetch the popcorn and buckle up. You'll be suitably enlightened in the coming one to five years and you can't predict the outcome of this however much you try as this event is something we're unlikely to witness again in our lifetime.  

 

Think of the space shuttle reentering earth's atmosphere and taking five years, minimum. A very bumpy and dangerous ride.   

 

Edited by torturedsole

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On 9/7/2020 at 10:39 PM, Scooby and Puppy said:

I wonder if the golf courses will lower their green fees?  Does anyone know? Compared to Korat area, Pattaya golf is expensive even for average courses.. 

As for bars, clubs etc., I feel sorry for the workers, for sure, but i don't miss the scams they try on tourists when everything is rosy. Because there was always another mug to rip off coming along. But now there isn't. 
I believe westerners won't return in such large numbers when it starts to recover. It's just too expensive compared to up and coming rivals like  Vietnam, Cambodia, even Philippines.


 

 

I had intended to stay there and had more than sufficient monthly income and plenty of money in the bank.  Went back to the USA to take care of some business and they changed the rules on the embassy letters.  I will never put $25K in a foreign bank to live there with a military gov't.  So...I won't be back.  That means they lost about $20K I spent every year.  I don't miss the theives, police stops, etc. at all either.  And yes, there are better places that seem to appreciate my presence much more than the Thai people ever did.

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On 9/8/2020 at 3:19 AM, Guderian said:

Pattaya will survive, but it will change, and in some ways the changes will be exactly what the government claims it has been wanting for the last 15 years or more. Somebody should have told them to be careful what they wish for. There are enough Thais and expats living here to keep the most important businesses going, there's certainly no sign of the likes of Friendship, Siamburi's and Foodmart going under any time soon. Outside the tourist area, which is a relatively small part of the total city, not much has changed. It's the places like Beach Road, Second Road, Soi Buakhao, and parts of Jomtien and Naklua that will suffer most. Fewer cheap bars and hotels and restaurants, fewer shops selling tourist tat, and fewer convenience stores. A ghastly situation for the business owners concerned, but it's just possible with sufficient government support that they might be able to remodel those areas to provide better quality facilities built with sustainable tourism in mind. It's not what you'd like if you are wedded to the Pattaya of the past, but it was changing slowly anyway, this will speed up the changes and we may end up with a much nicer city to live in.

Yes, a much nicer city with a pathetically polluted ocean.

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14 hours ago, Joebuzz said:

I will never put $25K in a foreign bank to live there with a military gov't.

But, but, but, everyone else does it so it must be alright.  🤣

 

Use an agent.  

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