Jul 06, 2012
The selling off of the world renowned Dusit Thani (above) and the Laguna Beach Resort in addition to Banyan Tree's US$900 million in Vietnam has sparked concern over Phuket's investable pulling power.
Fears for Phuket’s investment pulling factor waning to emerging countries were raised at a minimum wage meeting, this week.
The former president of the Phuket Human Resources Management Club, Prasert Monprasit speculated that the east coast of Vietnam’s hospitality and property fields will increasingly be a target for investment from both Thai and foreign nationals.
In a meeting chaired by Vice-Governor Dr Sommai Preechasin to discuss the impact of the THB300 (US$10) minimum day wage, Prasert cited the recent sale by the Banyan Tree Group of two hotels in the Laguna Phuket Complex as an example of Phuket’s loss of investment. The selling off of the Dusit Thani and the Laguna Beach Resort in addition to Banyan Tree’s investment of THB27 billion (US$900 million) in its luxury resorts and property project in the central Vietnamese town of Hue led Mr Prasert to express his concern.
“It’s likely that investment flows into Thailand will slow down until 2015, when the Asian Economic Community comes into being,” he said.
“The main reason is that Thai business conditions don’t help investors to make adequate profits,” said Prasert. Thai laws often deter and restrict foreign invest ability on the island. Regulations controlling development and limited land use and building capacity on Phuket pose restrictive sanctions on foreign investment.
According to Mr Prasert, labour is another factor causing a setback in investment as, he says, many of Phuket’s hospitality staff are aged over 30 and this means many are resistant to raising their standards and this particular realm of staff actively avoid skills training programmes, reported Phuket News.
The expense of doing business is high in Phuket, where almost zero unemployment means that employers who wish to retain staff must often facilitate staff with housing and meals and other “welfare” perks.
The THB300 (US$10) minimum wage policy has yet to have a discernible effect in Phuket, said Prasert. “But it could make investors step back and consider whether this is a profitable place to invest,” he said.
Furthermore, there are wider concerns over Thailand’s present political stability and general security.
Speaking of the recent murder of Australian travel agent Michelle Smith, Prasert said: “The report will definitely affect the image of Phuket among investors, possibly shaking Phuket’s investment credit.”
By Laura Neve Tacey
