Story : Jame Goyder
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High season in Thailand is underway and all the signs indicate that consumer confidence has well and truly returned to the region in the aftermath of the 2004 tsunami. The Bangkok Post reported that the number of visitors to destinations on the Andaman Sea coast over the Christmas and New Year holidays was up 15% on the same period last year, according to the Tourism Authority of Thailand (TAT).

The same newspaper also claimed that beach front land prices in the three key resort destinations; Phuket, Samui and Phang Nga, would increase by at least 15% to 20% this year, mainly due to the increasing demand of well-heeled tourists. The TAT expects the tourism business in these three destinations to have returned to its pre-tsunami state within the next year. However the Bangkok Post did report that Japanese tourists, in particular, are still cautious about the tsunami early warning system and evacuation plan for the six provinces along the Andaman coast.
 
The Bangkok Post was similarly upbeat about the property market in Thailand as a whole reporting that it should expand by 3% to 5% this year. However it was not all good news for the property market as The Post also reported that proposed changes to environmental impact assessments (EIA’s) relating to green space and air conditioning have raised concerns among condominium developers about lower profit margins.

The Post believes that, despite expectations of stagnant sales in many property segments, low to medium-priced condominiums near mass-transit routes will thrive this year, although developers will need to diversify and be careful about their funding costs. However they do warn that despite the fact that Thailand’s property market has come a long way in the last 10 years, more needs to be done to build investor confidence, shore up the industry’s foundations and further develop Thai real estate’s international appeal.

Meanwhile Thailand’s Business Day warned that foreign investors are paying less attention to its property market following a number of unfavourable incidents in the past month. It reported that foreign investors interested in investing in property in Thailand are uncertain about state measures taken recently, such as the 30% reserve requirement imposed by the Bank of Thailand in December and the amendment to the Foreign Business Act.

The Nation predicted that the global economic slowdown would significantly reduce the number of tourists coming to Thailand but reported that tourism revenue last year surged 10% to THB 530 billion. They also echoed the Post in reporting the Tourism Council of Thailand (TCT) as predicting the number of international visitors would rise by 6% and revenue by 10% this year.

Despite this optimism the Nation also reported property developers as becoming increasingly concerned about construction costs and believing that government valuations are well below market prices. According to The Nation developers launched 26 projects worth THB 14.43 billion in December, down 5.8% from November in value, reflecting a drop in consumer confidence. Of these projects about 95% were residential resorts in tourist destination such as Phuket and Pattaya.

Thailand does not exist in isolation from the rest of the world and the recent global economic turmoil will, inevitably, have a knock on effect on the country. However with 2008 underway and the number of tourists arriving here increasing seemingly exponentially both the Thai economy and tourist industry appear to be standing strong in the face of global adversity.