First of all may I wish you all a very prosperous and Happy New Year. I have no comment on the result of the General Election as yet until we can see how the Coalition negotiations turn out and what proposals that come out of that.
You will see that in February we are supporting the Matt Hampson Trust. (see http://matthampsonkohsamui.blogspot.com/). For those of us who have been involved in Rugby at various levels over the years and continue to support it even as spectators, this is a very worthwhile charity and any assistance or help will be much appreciated. More specific details in next months Newsletter. So far we have attracted intriguing sponsorship including signed boxing gloves from Steve Collins, Enzo Macrinelli and Joe Calzaghe, Leicester Tigers shirts signed by their international players and our local champion Mr Lawrence Fay of Sabai Properties who has offered to have his head shaved on the 23rd February live in Coco Blues if we can get Baht 40,000 in sponsorship. I do not see that as a major problem - please email me for sponsorship foms!
More and more investors are coming to Koh Samui for the purpose of investing in the hotel scene. We have already seen announcements by Conrad, Park Hyatt, Mandarin Oriental, Hard Rock Hotel, Dusit D2, Alila Hansar, W, X2 and more recently a joint venture between Lehman Brothers and the Malaysian YTL Hotels and Properties of a site in Choengmon which they claim will be managed by a “renowned name”. We recently were instrumental in bringing to the island a famous name in hotels which is known internationally but which we cannot yet disclose. We have also received an enquiry from a major hotel group who wish to establish themselves here in Koh Samui as well as another foreign investor with a significant budget with the same idea. These are all 5-star hotels, a commodity in which the island has been severely lacking, but it is indicative of the way Koh Samui is moving up market and the faith major investors and international hotel operators have in the future of Koh Samui as a tourist destination.
There are very few large hotels on Koh Samui, and of the 264 hotels in our survey there are only two which can boast over 200 rooms and only 13 which have over 100 rooms. None of the new hotels planned exceed 200 rooms, and half have under 100, but a common feature to many is the combination of hotel rooms and villas for sale, not a new concept by any means but one which is becoming more prevalent as investors work to recoup their capital outlay quickly whilst still providing the required accommodation for the hotel management as the villas for the most part remain in the rental pool. It has been a common philosophy that for a hotel management company to provide the necessary Return on Investment (ROI) to the owner, a very minimum of 130 keys is essential and that still probably holds true for hotels in the 4-star category. What we are seeing here is the required ROI being achieved by higher occupancy and higher Average Daily Rates (ADR). This is achieved by good marketing, and of course the international chains have established worldwide marketing arms, but above all by providing exceptional service. The travelling public is becoming more discerning and demanding but is prepared to pay for quality. The United Nations World Tourist Organisation (UNWTO) report that tourism world wide is on the increase with 5.6% more people travelling in the first eight months of 2007 than same period in 2006 and that this growth is likely to continue for the rest of 2007. Regionally Asia Pacific is expected to grow by +10% whilst a slow down in the Americas, the Middle East and slightly in Europe. The Average Daily Rate for the new hotels planned for Samui is predicted at ca. $650/ night or Baht 22,000.
The good news to support this increase in tourists is the approval by the Environmental Authorities to allow additional capacity at Koh Samui Airport which should allow flights by Thai Airways to start and provide some competition although I will not be holding my breath to see significantly cheaper air fares. See the article below.
Once again I need to highlight the Thai Baht onshore/offshore rate issue. I am still seeing companies offering to buy and transfer Thai Baht at better rates than can be achieved at high street banks. For instance one company was quoting the Pound at Baht 65.6 against Baht 64.8 at the bank. The rate onshore here in Thailand at the same time was Baht 68.08 which would gain you Baht 124,000 on a £50,000 transfer. It was the same against the US Dollar – Baht 31.8 against Baht 31.4 when the rate onshore was Baht 33.49. A difference of Baht 84,500. They will even offer to transfer the funds without charge – well with transfer costs of less than Baht 1,000 I am not surprised. So you can see where they are making their money and none of them will tell you that you will not get the Foreign Exchange Transaction Certificate this way. ALWAYS send funds in your home currency, never in Thai Baht. In my experience you will always get a better rate here onshore and you will get the FETC. Also see the article later in this Newsletter re the future of the offshore/onshore rate divide.
For those of you who know him, Crispin Patton-Smith has at last been cleared of all charges and released from prison – see the story below. That he had to spend the last eighteen months in custody due to the unsubstantiated ramblings of a madman is a travesty and we all wish Crispin well on his return to civilisation.
The full Newsletter can be obtained by emailing me hbonning@kosamuiproperties.com
Monday 31 December 2007
Tuesday 4 December 2007
Koh Samui - Has the rain stopped? We think so!
It is November. It is the rainy season. It is wet. ‘Nuff said!
That is how I opened last months Newsletter and I have included some of the articles from the Newspapers about “what happened next!” (If you want a copy of the full Newsletter email me at hbonning@kosamuiproperties.com ) Well we did get a lot of rain for a couple of days and the problem was that the storm, instead of moving on, sat on top of us for those two days. Consequently the amount of rain that fell was so much and consistent that even with the new drainage that was installed after the previous floods a couple of years ago, it was falling faster than it could drain away. It is true that in some places there was some severe flooding, especially around the Laem Din Market, by the Chaweng Lake and along certain sections of the Beach Road, but once the rain stopped the water did actually drain away pretty quickly. In some areas the floods were worse than two years ago especially around the Reggae Street end of Chaweng Lake and the north end of the Beach Road but the big difference was that once it stopped raining the water went away very quickly. Now that did not make the situation any better for the people who had been affected as the damage had been done, but at least they were able to get back to business once the water had subsided. Clearly a lot more needs to be done to make the situation better when we get this level of flooding and hopefully the move towards Samui getting City Status can provide the additional funds to do this. In this respect a consultation document was issued in September (but only just reached my desk) explaining what the authorities were trying to do and asking for the views of the local population. There was no date by when submission had to be made but we will be making further enquiries to see how this progresses. In the meantime it has been warm and sunny and many locals believe the rainy season was short and sharp and is now over. Michael Fish – eat your heart out!
There are three kinds of lies: lies, damned lies, and statistics
This well-known saying is part of a phrase attributed to Benjamin Disraeli and popularized in the U.S. by Mark Twain. Doing research into an article I am writing I accessed the Tourist Authority of Thailand web site statistics page for Koh Samui. Whilst it is mostly in Thai, certain sections are in English and of particular interest to me were the figures representing the hotel occupancy rates for 2004 to 2006. Each year is on a separate page so in order to make a meaningful comparison I consolidated the figures into a single spreadsheet. It was only then that it became obvious there was a huge error. The figures quoted for the second half of 2005 in every category were exactly the same as the figures quoted for the second half of 2006. Statistically impossible – or am I being glib? The reality I suspect is someone cut and pasted the figures, no one updated them and no one checked them. I also looked at the figures quoted for hotel rooms in Koh Samui and tried to reconcile their figures with my own. Let us just say we differ significantly. So far they have not responded to my emails asking if we can resolve this. I am quite prepared to accept it if I have made a mistake but I somehow doubt I have missed several thousand hotel rooms. The problem therefore is having found two quite significant discrepancies in two separate tables, how accurate are the remainder, and if they are not accurate, how do they help in planning for the future? I have a strange feeling I will be running up a face saving issue here and rather than resolve the problem, it will just be ignored.
The General Election is due to take place on 23rd December and it is anyone’s guess as to how it will turn out. There is the usual bickering between the various factions with allegations and insults flying around. Par for the course I guess. Nevertheless it must be good for the country to return to civilian rule where legitimate actions and legislation can set the country back on course and not fall behind the rest of Asia where foreign business is being made more welcome every day. I am still surprised, although having lived here for so long I should not be, at the number of people who want to whisper in your ear that they know someone in Bangkok who has the inside track on how this is all going to turn out and the Ministries have already been allocated. The funny thing is of course, no one has the same story! All we can do is wait and see. Then perhaps we will discover who really did have “informed sources”!
That is how I opened last months Newsletter and I have included some of the articles from the Newspapers about “what happened next!” (If you want a copy of the full Newsletter email me at hbonning@kosamuiproperties.com ) Well we did get a lot of rain for a couple of days and the problem was that the storm, instead of moving on, sat on top of us for those two days. Consequently the amount of rain that fell was so much and consistent that even with the new drainage that was installed after the previous floods a couple of years ago, it was falling faster than it could drain away. It is true that in some places there was some severe flooding, especially around the Laem Din Market, by the Chaweng Lake and along certain sections of the Beach Road, but once the rain stopped the water did actually drain away pretty quickly. In some areas the floods were worse than two years ago especially around the Reggae Street end of Chaweng Lake and the north end of the Beach Road but the big difference was that once it stopped raining the water went away very quickly. Now that did not make the situation any better for the people who had been affected as the damage had been done, but at least they were able to get back to business once the water had subsided. Clearly a lot more needs to be done to make the situation better when we get this level of flooding and hopefully the move towards Samui getting City Status can provide the additional funds to do this. In this respect a consultation document was issued in September (but only just reached my desk) explaining what the authorities were trying to do and asking for the views of the local population. There was no date by when submission had to be made but we will be making further enquiries to see how this progresses. In the meantime it has been warm and sunny and many locals believe the rainy season was short and sharp and is now over. Michael Fish – eat your heart out!
There are three kinds of lies: lies, damned lies, and statistics
This well-known saying is part of a phrase attributed to Benjamin Disraeli and popularized in the U.S. by Mark Twain. Doing research into an article I am writing I accessed the Tourist Authority of Thailand web site statistics page for Koh Samui. Whilst it is mostly in Thai, certain sections are in English and of particular interest to me were the figures representing the hotel occupancy rates for 2004 to 2006. Each year is on a separate page so in order to make a meaningful comparison I consolidated the figures into a single spreadsheet. It was only then that it became obvious there was a huge error. The figures quoted for the second half of 2005 in every category were exactly the same as the figures quoted for the second half of 2006. Statistically impossible – or am I being glib? The reality I suspect is someone cut and pasted the figures, no one updated them and no one checked them. I also looked at the figures quoted for hotel rooms in Koh Samui and tried to reconcile their figures with my own. Let us just say we differ significantly. So far they have not responded to my emails asking if we can resolve this. I am quite prepared to accept it if I have made a mistake but I somehow doubt I have missed several thousand hotel rooms. The problem therefore is having found two quite significant discrepancies in two separate tables, how accurate are the remainder, and if they are not accurate, how do they help in planning for the future? I have a strange feeling I will be running up a face saving issue here and rather than resolve the problem, it will just be ignored.
The General Election is due to take place on 23rd December and it is anyone’s guess as to how it will turn out. There is the usual bickering between the various factions with allegations and insults flying around. Par for the course I guess. Nevertheless it must be good for the country to return to civilian rule where legitimate actions and legislation can set the country back on course and not fall behind the rest of Asia where foreign business is being made more welcome every day. I am still surprised, although having lived here for so long I should not be, at the number of people who want to whisper in your ear that they know someone in Bangkok who has the inside track on how this is all going to turn out and the Ministries have already been allocated. The funny thing is of course, no one has the same story! All we can do is wait and see. Then perhaps we will discover who really did have “informed sources”!
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