Building a little boutique resort in Thailand

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Re: Building a little boutique resort in Thailand

Postby Nawty » Thu Mar 21, 2013 7:14 pm

Would love to be a fly on the wall when the discussion with investors comes around to 'security'

by the way BKKBILL....I got a PM from someone wanting to join.
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Re: Building a little boutique resort in Thailand

Postby BKKBILL » Thu Mar 21, 2013 9:39 pm

Nawty wrote:Would love to be a fly on the wall when the discussion with investors comes around to 'security'

by the way BKKBILL....I got a PM from someone wanting to join.

Yes that will be an interesting meeting. Even more interesting when we hear the sums being batted around. Waterfront prices are not for the faint of heart.

Do scrutinize carefully anyone who would want to join our clique as there must be something wrong with them. :mrgreen:
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Re: Building a little boutique resort in Thailand

Postby jazzman » Fri Mar 22, 2013 9:46 am

OK, I've been following this thtread for long enough so it's time for me to chime in with my 2P; But don't trust anything I have to say either :wink:
quamsukh wrote:In the last couple of week, we have been given a rough ball park figure on build cost usingt a western architect and builder

Before you even think of involving architects and contractors in your business plan, you will need to have made a very specific choice of location and the plot of land you want to construct on, the availability of preferred construction materials, and the logistics of getting them to the island. (it costs baht 18,000 for a truck on the ferry to Kho Tao, just for starters, so that's where your first 2 mio baht will go. ) 'Western' architects and contractors won't necessarily have any more local knowledge that you will have yourself, and they will charge you for flying there and back constantly from the mainland for every minor detail. There are too many different factors that will influence the final budget. Western archis, lke western lawyers, are not registered to practice here in Thailand and must work with, or use the infrastructure of an existing Thai qualified and registered individual.

Also bear in mind that if you want an ROI on your investment in the usual 20 years or or so(even f you are able to live from day-to-day on the turnover of your resort) , you will need to budget very carefully, while all the time choosing your partners carefully. Western architects charge up to 6 times more than Thai archis and their work isn't necessarily any better. The same goes for so called 'Western 'contractors. What is most important is that you get advice from a Western consultant who will have no vested interest in the value of the services (architecture, business, marketing, legal, and construction) you are looking for. The money he/she will save you in the long run will far outweigh the relative low cost of his/her fees.

In my opinion (and professional experience), the kind of resort you are looking at is not one that is going to be realised by floating an investment project, it's just not big enough. If you were considering building a new housing estate with 20 - 30 luxury houses on Samui, that would be a different ball game and there would be professional venture capital investors for that. What's more, there is no real Mafia there, what you do have are cartels that maintain prices high for certain services. Take Kho Tao (again) for example where a 400 metre tuk-tuk ride (a ten-minute walk) costs Baht 300 whoever you are, and small as the island is, the driver still can't find the address, so you get out and walk anyway.

What you are looking at is a project for which you already need the cash up front. Expats who successfully launch such projects have generally met some or all of the following criteria:

- They have a trusted Thai wife in whose name the property and the business can be registered in.

- Their Thai wife's aunt, uncle, father, mother, sister, brother, cousin, works in either the immigration department or the local Or Bor Dor office.

- They bought the land when the islands were barren rocks in the ocean, sat back on it for 10 years and waited for the tourism to develop, and then went in with their resort - Kho Chang is one of the best recent examples of this - the GPB, USD, and Euro were worth a lot more baht than they are today (they've lost nearly half their value against the strong baht in the last 3 years or so, and still dropping).

- They had cash in hand and jumped on the band waggon when a tsunami hit major tourist areas and razed everything to the ground leaving the local residents and small business owners ruined and impoverished.

- Most if the farangs who have built such 'boutique' resorts here have either sold their western home (a paid up mortgage), sold a small business, inherited some money from their parents, simply won the national lottery, a flutter on the horses, or a one-off lucky stab at an online casino, or proceeds from white-collar crime (and there are plenty cases of those too). There is also the couple whose daughter won the UK X-Factor and landed a record deal making her a millionaire within a year.

- Most of the boutique resort owners have a second source of income. For example, especially on Kho Tao where they organise expensive scuba diving courses in their swimming pool.

- They are aware that here in Thailand they are just as likely to get ripped off by other farangs as they are by Thais. There is a case right now where a reasonably wealthy Swede (not an expat) had three luxury 22 mio properties built on a beach front. The project was taken care of by a 'friendly' Swedish real estate/development company with offices in Krabi and Pukuet who have run out of money and can't complete the jobs in spite of having been paid up front and at grossly bloated construction costs. There has been an impass for nearly 3 years now on the completion of these properties and the customer wants them finished. Unfortunately, it does not look as if the sun is going to set on the difficulties the property management company now finds itself in, and they now also have another 20 farang clients across the province banging on their door for completion of their house and pools. Their pools are a particluar issue because the ones that are complete and in use already, were built by completely ignorant builders hired by the Swedish company, and now have to be drained and completely rebuilt....
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Re: Building a little boutique resort in Thailand

Postby MGV12 » Fri Mar 22, 2013 10:01 am

The OP hasn't even logged in for a few days now ... hopefully he has not been put off by the outpouring of opinion and cautionary tales as it would be interesting to see where this goes.

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Re: Building a little boutique resort in Thailand

Postby jazzman » Fri Mar 22, 2013 10:28 am

I only post sporadically on CTH these days, so it may be worth keeping the URL of my post up your sleeve in case someone else comes up with a similar pie-in-the-sky idea.
I've actually advised on quite a few swimming pools for 'little boutique resorts in Thailand' and their projects, especially on islands, so as long as my own info is up to date, it could be useful. Most of those resort projects sadly never came to anything for the reasons I stated - and before anyone misunderstands, I didn't take a fee for the advice.

I don't think the OP will be put off, I don't think he's that kind of guy, but I'm sure that if he has continued to read, he would have taken notice of the caveats and may come back for more advice. Our advice here is worth its weight in gold and is of course free :D
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Re: Building a little boutique resort in Thailand

Postby Mike Judd » Fri Mar 22, 2013 12:01 pm

Come on Guys ! I repeat, why would anyone in their right minds , come to Thailand cold , Samui especially, and try to start a business from scratch, buy land , develop it , build a resort ,all with some one else's money. ? It's just not viable unless you have access to unlimited funds and are not concerned about how long before there is any return on capital. As mentioned a more sensible option would be to buy a resort ( what ever size he can afford ) that's already established that he can evaluate as to it's potential. That way he would cut out most of the variables and maybe avoid the pitfalls that he would other wise encounter.
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Re: Building a little boutique resort in Thailand

Postby MGV12 » Fri Mar 22, 2013 12:13 pm

jazzman wrote:I only post sporadically on CTH these days, so it may be worth keeping the URL of my post up your sleeve in case someone else comes up with a similar pie-in-the-sky idea.
I've actually advised on quite a few swimming pools for 'little boutique resorts in Thailand' and their projects, especially on islands, so as long as my own info is up to date, it could be useful. Most of those resort projects sadly never came to anything for the reasons I stated - and before anyone misunderstands, I didn't take a fee for the advice.

I don't think the OP will be put off, I don't think he's that kind of guy, but I'm sure that if he has continued to read, he would have taken notice of the caveats and may come back for more advice. Our advice here is worth its weight in gold and is of course free :D


Just to be clear Jazzman ... it was merely coincidence that my post immediately followed yours.

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Re: Building a little boutique resort in Thailand

Postby jazzman » Fri Mar 22, 2013 12:19 pm

Absolutely, Mike. But hardly anyone is going to put a well running resort up for sale in a hurry unless they have made enough money out of it and are still young enough to move on to a paradise that is even better than Thailand!

Also, investors such as in the OP's project, would need some reassurance that the project owner not only has made a wise choice of business to venture into to, but will also be competent to run it. With a pub for a few years in in Germany, a gite in the Provence (now let to a couple on a long lease), and having managed a guesthouse in Nong Khai and a very large luxury resort in Khon Kaen, I could write a book about the hospitality industry in Thailand. It's not something one wants to go into without ever having had any experience. To do so would almost guarantee that it would degenerate into a Fawlty Towers - and there's one of those in Thailand I could name too!

They might offer it on a long-term commercial lease though. There would be some initial key money for the good will, and it would be an existence for those would would like to run it, and there would be no outright purchase cost and no need for all those investors.

On another note, if such a resort were up for sale, chances are I would know about it :mrgreen:
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Re: Building a little boutique resort in Thailand

Postby jazzman » Fri Mar 22, 2013 12:32 pm

MGV12 wrote:Just to be clear Jazzman ... it was merely coincidence that my post immediately followed yours.
No worries there. I hope what I posted didn't all sound doom and gloom, but I've seen too many nice people (and a few fools) go down the drain after betting all their life savings on a lost cause here in LOS.

I met a Brit around 7 years ago (roughly the time I started posting on CTH) who had just bought a piece of land and was going to build a huge luxury gym with cafeteria and swimming pool. In his late 60's he invested his life savings (22 mio baht) in the project. I helped for free on the deign of the pool and even supplied the equipment at cost price. What the guy refused to understand was that without any advertising, a proper website, some SEO, a sign visible from the road, and some banners on farang forums, nobody would simply turn up and buy a membership of the gym. A few did, but at a gross turnover of around 20k baht a month, the whole thing was a net loss from start to finish. Last week, he finally put a chain around the elaborate main gate, and switched the lights off. If any one is interested in any superb gym equipement, 7 years old but virtually unused, there are around 200 various machines and weights up for sale - send me a PM.
How to build a $20,000 / £14,000 house and a $???? MOTEL Updated 21 March 09 - with BOQ and costs
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Re: Building a little boutique resort in Thailand

Postby Roger Ramjet » Fri Mar 22, 2013 12:54 pm

A few people are missing some of the details of the poster: Firstly he is working and secondly he posts when he has either time or an update on the situation.
I think he is carefully considering what has been said; which will probably reflect in his business plan to potential investors, but he's not going to be put-off no matter what.
The thing that has not been mentioned is the EIS (Environmental Impact Study) especially for where he plans to build a new resort. In two recent rulings at the Administrative Court two resorts on islands were halted for lack of such.....both were owned by Thais. Imagine the ruling with farang involvement.... "You, of all people, should have known"!
The one thing I've found is the EIS and rulings from the Administrative Court are both equally fair. The Administrative Court even had the audacity to stop the RPB, RHB, Siam Cement and another majority owned Thai company dead in their tracks and have never buckled to Puyai/Puyang/Elite pressure. For those who don't understand the abbreviations, just add royal and bureau.
And remember Dr. Martin Luther King in one of his famous speeches said "I have a dream", which is what this 30 year old whipper snapper has... and he won't be put off. Give him time to line his ducks up. He'll be back, probably on a Sunday night. I know I would.
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Re: Building a little boutique resort in Thailand

Postby jazzman » Fri Mar 22, 2013 1:06 pm

The main thing, and one which I am not missing, is that such a project is possibly far to small to be a viable investment for a group of professional investors. He is calling it a 'boutique' and appears to have the intention of running it himself, but until we know the actual scope of the project and the targeted room rates and expected occupancy levels, and peripheral services, it is difficult to be objective about giving advice.
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Re: Building a little boutique resort in Thailand

Postby pipoz » Fri Mar 22, 2013 2:09 pm

jazzman wrote:<edited for clarity - mod> If any one is interested in any superb gym equipement, 7 years old but virtually unused, there are around 200 various machines and weights up for sale - send me a PM.


Sounds inviting, but the crowd I know dont come to Thailand to get healthy, although some of them do exercise, when not sitting in the deck chairs on the beach.

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Re: Building a little boutique resort in Thailand

Postby Nawty » Mon Mar 25, 2013 8:24 pm

BKKBILL wrote:
Do scrutinize carefully anyone who would want to join our clique as there must be something wrong with them. :mrgreen:


Yeah....any clique that would have me I would not want to be a member of...

Mind you...he contacted me by PM.....think he feels left out.
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Re: Building a little boutique resort in Thailand

Postby BKKBILL » Mon Mar 25, 2013 11:24 pm

Nawty wrote:
Yeah....any clique that would have me I would not want to be a member of...

Mind you...he contacted me by PM.....think he feels left out.

Well OK but just this once.
Oh and to not upset the on topic constable.

Little boutiques is Thailand can be costly.
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Re: Building a little boutique resort in Thailand

Postby jazzman » Tue Mar 26, 2013 5:22 am

BKKBILL wrote: Little boutiques is Thailand can be costly.


So can swimming pools (most resorts have one) if they are built by the wrong people, especially when the problems arrive later after the constructor has conveniently vaporized himself.
How to build a $20,000 / £14,000 house and a $???? MOTEL Updated 21 March 09 - with BOQ and costs
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