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Tourism and Property Investments Surge at Thailand’s Seaside Resorts

Wanrapa Boonsu 02.04.2012 05:47
Beach Resorts are drawing more tourists and investment money.

Beach Resorts are drawing more tourists and investment money.


It has become clear in the past few months that Thailand’s beach resorts are undergoing a significant surge in interest from visitors and businessmen, who are arriving in increasing numbers and bringing with them investments in business and property.



At the end of March, the Tourism Authority of Thailand predicted a gain in tourism arrivals in 2012 of 4% from Europe—a continent that has been beset with major economic problems for the past two years. These increasing numbers portend well for Pattaya, Samui, Hua Hin and Phuket—all beach resorts that have historically witnessed an important European presence.

In 2011, the biggest jump in European arrivals was from Russia, over 63% year-on-year; Spain was second with just under 42% increase; Eastern Europe, up over 13%; with rance in 4th place with an incerase of over 11% over 2010.

Among Thailand’s resorts, Phuket and Samui are undergoing significant change due to increasing numbers of in-bound international flights bringing tourists from elsewhere in Asia, Europe and Russia in particular.

Pattaya’s growth is being led by its close proximity to the Kingdom’s international airport and the vast Eastern Seaboard industrial area, from Laem Chabang Port south to Rayong. Bangkok residents are flocking to Pattaya on week-ends, and Pattaya City and the surrounding province of Chonburi are gaining from the concerted efforts of the Khunpleum family—historically the province’s leading political family--and the national government to re-orient Pattaya’s image toward a balanced, more family-oriented resort community. 

Hua Hin, which northern Europeans have strongly favored as a quiet, seaside retirement community, is gaining from an expected increase in European tourist numbers.

In all four resort communities, domestic and international investment money has followed upon higher tourist arrivals: international hotel chains and the Thailand’s largest retail companies are moving into these areas and laying their claim to a piece of the expanding pie.

Tourism has always been the most significant of Thailand’s foreign exchange-earning economic sectors. With increasing tourists comes increasing investment in property. Although each of the four beach resorts attracts a different mix of visitors, each resort considers property a major factor in its economic growth. 

It is important to recognize that domestic and international tourism represents two very different narratives. Domestic tourism is driven by young, middle-class Thai families with disposable income who want to remain in the Kingdom while enjoying a good standard of service in comfortable surroundings. Their favored week-end tourist destinations, of the four we are highlighting, are Pattaya and Hua Hin because of their proximity by road to Bangkok. In Hua Hin, for example, young Thai families are investing in seaside condominiums for the week-end, not second homes.

International tourism has been severely affected by economic conditions in the home country of the foreign traveler. Residents from the European Union are suffering from the effects of their deteriorating domestic economies; the resurgent Asian middle- and upper-classes are flying in directly to Samui, Phuket and the Utapao-Pattaya international airports—many of those travelers high-end tourists and property investors.

Russians, from a strong resource-rich oil producing nation, have gained from the liberalization of their domestic economy since the fall of the Soviet empire. The new-found Russian middle-class has arrived in Thailand—and particular in Pattaya—with disposable income and the conviction that Pattaya is where they want to vacation and invest.

The key element of the plan for these four beach resorts is the development of infrastructure: roads, airports, water-treatment systems, retail malls, world-standard hotels and hospitals, educational facilities, among many others.

The best example of the importance of good infrastructure is the story of Pattaya today.

THE PIVOTAL POSITION OF PATTAYA

If any one resort shows the way, it is Pattaya. At a time of an improving Thai economy, the expanding Asian economies (especially China and India) and the advent of the ASEAN Community in 2015, Pattaya, under consistent political and business leadership, has forged ahead in implementing sound, long-term projects to prepare the city and the surrounding area for massive growth in the 21st century.

Pattaya is linked by sea, air and road to the Bangkok metropolis and its new international airport. It will soon be linked with a new electric rail service taking travelers from downtown Bangkok, via the international airport and Laem Chabang port to Pattaya. The Laem Chabang port is now receiving cruise ships filled to the brim with high-spending tourists, and Pattaya city is developing an upgraded Bali Hai pier-and-parking facility from which smaller ships will ply the Pattaya-Koh Larn route.

The Utapao-Pattaya international airport has seen major improvements to transform it into a new alternative international airport, with long-haul passenger and freight services critical to the tourist and business expansion of Pattaya and the Eastern Region. Specifically, upgraded terminal and baggage-handling facilities are on the cards for the expanding numbers of charter world travelers flying in to Utapao. It is expected that Utapao-Pattaya International will soon handle the second largest number of international travelers after Suvarnabhumi International (Don Meaung airport in Bangkok having been relegated to charter and domestic flights).

How do such regional tourist developments impact communities and local businesses? Koh Larn (Coral) island, part of the City of Pattaya, is a good example. From a small, near-deserted sandy isle off Pattaya, Koh Larn has now gained new infrastructure (an underground electric grid) and school facilities for the increasing number of Thai residents. Mayor Ittiphol Khuenplum and his team have designated Koh Larn a special eco-development site for sustainable tourism, and efforts are being made to preserve the island’s unique features without suffering the excesses of uncontrolled development.

Pattaya and the Eastern region is not only trying to attracts world travelers interested in enjoyable and reasonably-priced vacations; they are also targeting international business investment. Laem Chabang port and the region’s vast industrial estates are drawing greater interest from multinational manufacturing and service industries. A prominent Thai property developer is building the first major commercial high-rise office building in the Eastern region on Sukhumvit Road at Pattaya Klang, to house international firms wishing to use Pattaya as their regional business headquarters.

Thanks to efforts from Thailand’s Board of Investment, privileges offered to new investors are being re-worked and enhanced. The Yingluck government is embarking on a far-sighted effort to challenge the tax advantages other Asian countries have had by reducing Thailand’s own corporate income tax regime.

SUMMARY

In summary, Pattaya and the Eastern region, long a well-know destination for world travelers and international business investors, is beginning to  benefit from vital new infrastructure, new government development and tax policies, ever-higher tourist arrivals and the advent of the ASEAN Economic Community (AEC).

With sound economic growth, a growing Thai middle class, and new investment opportunities, Pattaya is moving in the right direction, with residents and investors alike brimming with newfound confidence for the future of the region and Thailand as a whole.



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