Today’s export figures should increase the momentum. They show that the strong currency hasn’t hit exports – in fact, exports rose sharply in August, led by cars and electronics, and July’s trade deficit flipped into a surplus. Now the central bank must respond.

Thai exports were up 24.9 per cent in August compared to the previous year, driven by demand in the US and Japan. Exports to Europe remains a relative laggard – with growth of 20 per cent in August, and 16 per cent in July. Compared the previous month, export growth was 3.3 per cent, after falling 13.3 per cent in July.

Such data makes an interest rate rise more complicated. Yet the central bank is keen to lift its reference rate by another 25 basis points when the monetary policy committee meets meet next month. And the consensus among analysts is that the bank will go ahead anyway.

According to HSBC:

We expect only a drizzle for Thailand in second half and since the overall outlook remains fairly upbeat – i.e. no pit stop for the [central bank] yet. One more rate hike, in October.

At the same time, the central bank is about to announce new regulations to encourage Thais to take money out of the baht to mitigate some of the upward pressure. They are due to relax limits on foreign exchange holdings for exporters, and ease the rules on buying foreign property. The assistant governor said on Monday: “The measures will not address the baht’s strength directly but will help facilitate offshore investment.”

The commerce ministry said the country had a cumulative trade surplus of $6.1bn during the first eight months of the year, begging the question of why foreign reserves have grown by $15.6bn over the same period. The Bank of Thailand says it only intervenes in the foreign exchange markets to dampen volatility, but is coming under increasing pressure from exporters to hold down the value of the baht. Volumes may not be suffering yet, but margins presumably are.

September 20, 2010 by Tim Johnston

http://blogs.ft.com/beyond-brics/2010/09/20/trade-surplus-adds-to-thailands-currency-pressures/

The company is investing 300 to 400 million baht to develop the 85-room Thana Boutique Hotel on a two-rai site on Chaweng beach.

“We decided to diversify into the hotel business in order to foster our existing services business,” he said.

Fuji Group also plans to add eight more Fuji restaurants this year, in addition to 62 currently. Each restaurant will cost about 20 million baht.

“We aim to add 8-10 branches annually in both Bangkok and upcountry areas,” Mr Amnaj said.

The 30-year-old company recorded sales last year of 3 billion baht, with 5% same-store sales forecast this year.

Fuji Group also operates eight branches of CoCoIchibanya, a Japanese curry restaurant. It plans to add four more branches this year, with a total budget of 48 million baht.

Daisaku Tanaka, managing director of Fuji Group, said the company also aimed to enter international markets within the next two years. It has been contacted by investors from Singapore, Malaysia, Vietnam, and Hong Kong.

The company yesterday introduced the Fuji Smart Life Privileges card, aiming to increase customer loyalty. It currently has 200,000 members, 70% of them active. It expects the new card will bring 25% growth in membership annually.

http://www.bangkokpost.com/business/economics/191584/fuji-group-diversifies-with-samui-hotel

The controversy over oil exploration off the coast of Koh Samui does not seem to have dented tourism on the island. The number of visitors increased by 19% in the first half of 2010 compared with last year, which admittedly was a low tide for Samui, said Bill Barnett, managing director of C9 Hotelworks.

While the uplift is encouraging, it must be emphasised that Samui was probably the local resort market most affected by the global financial crisis.

“There was a pretty sharp decline two years ago and this year we saw a high recovery, but it started from a low base,” said Mr Barnett.

Research by C9 Hotelworks shows that total tourist arrivals in the first half of this year were 8% higher than in the same period of 2009, with the recovery in overseas visitors reflecting a 21% increase in international flights from a year earlier.

Aside from Bangkok Airways, which owns Samui Airport, two other airlines, Berjaya Air and Firefly of Malaysia, now fly to the island.

“Certainly people are coming from Malaysia, people are coming from Indonesia _ we are seeing a sharp increase in regional travellers over the past two years so that is a strong fundamental,” said Mr Barnett.

He noted that the recovery in Samui tourism has begun despite the political events in Bangkok in April and May. Overseas tourists seem happy to come to Thailand as long as they don’t see Bangkok on the boarding pass.

C9 Hotelworks’ research also shows that hotel performance on the island in the first half of this year saw surges in occupancy, rates and revenue per available room night (RevPAR) of 3%, 13% and 24%, respectively, when compared to the figures from last year.

While the existing room supply shrank by 11%, to 14,261, due to the closure of a number of small properties over the past year, the luxury tier is set to grow by 109% in the second half of the year. This will add 205 rooms to the supply. Key new hotels opening this year and next are:

- W Retreat Koh Samui (75 rooms, November 2010);

- Infinity Residences & Resort (65 rooms, December 2010)

- Conrad Koh Samui Resort & Spa (65 rooms, Q1 2011);

- All Seasons Samui Chaweng (153 rooms, Q1 2011);

- Vana Belle Samui Resort & Spa (Starwood Luxury Collection), 180 rooms, August 2011.

Mr Barnett sees two projects on the island as being particularly interesting, describing them as “green shoots”. The first is  the Conrad which has been very aggressive in its marketing and is offering 7% guaranteed return for the first five years.

“They got a model unit opened very early in the game, so that is driving sales _ we are seeing sales momentum in the Conrad.”

The other project is Beach Republic, which surprisingly is offering fractional ownership  by cashing in on its name as an entertainment venue.

“It’s a beach club in Lamai but they have also gone and opened a resort, and with it they are doing fractional sales. People like the brand, they like the concept, they feel at home and they are buying into it.”

Fractional ownership is also taking hold elsewhere on the island, for example at X2 Resort.

Mr Barnett said there is a good spread of people buying property and trying fractional ownership in Samui and they comprise both long- and short-haul travellers.

“One thing about Samui is that it doesn’t have much domestic content. I think a lot of that can be attributed to really expensive airfares, going back to Bangkok Airways.”

Another interesting thing about Samui is that there are no transactions in the $3-5 million (95-126 million baht) range as occurs in Phuket.

“But certainly the sweet spot of the upscale real estate is between one and two million dollars. We are seeing Conrad selling for about 40 to 45 million baht, but by the time you add in the guaranteed return of 7% over five years, that effectively is coming in at 30 million baht.” He added that Conrad’s pricing point was considerably less for this type of product than it would be in Phuket.

The opening of several big international hotel chains in Samui has also whet the appetite of other investors, with Park Hyatt also poised to restart this year, according to Mr Barnett.

“There are a couple of other international brands looking to come into the market as well. The emergence of new brands indicates that there is positive investor sentiment on the island.”

Mr Barnett said when Samui is mentioned in the media these days, the hot issues are pollution on the island, the roadway and especially the demonstrations about oil exploration.

“Samui needs more demand generators,” he said.” We always talk about golf courses and marinas but we are seeing some green shoots, so that is a good thing.”

Mr Barnett sees an interesting change in Samui in that it seems to be evolving in the development cycle and is no longer a backpackers’ destination. The closure of 1,808 guesthouse rooms in the past year clearly shows that this type of accommodation is no longer feasible.

“What we are seeing is backpackers are moving to other islands _ Koh Phangan and Koh Tao. Samui is edging higher, very similar to what Phuket saw 15 to 20 years ago.”

However this does not mean Samui is moving ahead of Phuket, as the two islands are entirely different markets.

“There is really not a lot to compare. Samui is purely a destination and Phuket is a destination resort but it’s also used as a transit point to greater Phuket _ to Krabi, to Phangnga, to the Similan islands, for boating. It’s a different kind of destination so I don’t think it’s fair to draw comparisons.”

Even so, improvements are needed on the island, and one necessity is a bigger airport. Mr Barnett remarked that the authorities should not look at whether the current facility can handle the capacity for the next two years, but for the next 20 years.

http://www.bangkokpost.com/business/tourism/193479/samui-taking-flight-again

C9 Hotelworks’ Managing Director, Bill Barnett, said rates and occupancies grew through a marked increase in visitors.

“The first half of 2010 suggests that a sustainable recovery for Samui tourism has begun despite the Bangkok political events in the final months of the period,” Mr Barnett added.

C9′s research showed a recovery in international visitors was fuelled by international flight capacity rising 67% from 2009. Tourist arrivals increased 8% during the same period since 2008. Wholesale gains made from 2009 were due in part to weak demand in the early part that year.

Key indicator — revenue per available room — soared 24 per cent over the same period last year, driven by a moderate occupancy increment of 5 per cent and a substantial increase in room rates of 13 per cent.

“Growth from regional markets signaled potential change in the island’s tourism profile with a strong Thai baht coupled with weak British pound and euro slowing the rebound for the traditionally strong long-haul visitor sector,” Mr Barnett added.

Looking to the future, Mr Barnett commented: “Clearly luxury loves company as the tier is set see room inventory grow 109 per cent in second half of the year, adding 205 rooms to supply.

“Globally recognised brands such as W and Conrad along with recent entries such as Banyan Tree are poised to drive new interest in the destination.”

http://www.tatnews.org/tourism_news/detail.asp?id=4990

Based in Bangkok, Thai Tiger will operate international and domestic flights out of Suvarnabhumi International Airport offering short-haul, point-to-point services within a 5- hour flying radius. The route network and further information on the corporate structure will be announced in due course.

Mr Piyasvasti Amranand, THAI President, said, “We are pleased to partner with Tiger Airways in establishing Thailand’s newest airline, Thai Tiger. With its disciplined approach to the low-cost model, Tiger Airways has proven that it has the right approach to competing effectively in the growing low fare travel market in Asia. For people in Thailand and the region, our launching Thai Tiger will mean that in addition to the global network of premium services operated by THAI, more people will have access to new low fare, point to point services, giving a big boost to tourism and employment. THAI and a Thai entity will collectively hold 51% while Tiger Airways will hold 49%. The Thai Tiger Board will consist of three nominees from THAI and two nominees from Tiger Airways, with the Chairmanship being held by THAI.

“We believe that this move will provide revenue opportunities for THAI and allow THAI to be more competitive in the region with the anticipated growth in the low cost market as a result of continued ASEAN air liberalization policies by 2015 which we expect will lead to growth in air travel in the Asian market. Thai Tiger will offer an entirely different line of products to that offered by THAI.”

Mr Tony Davis, Tiger Airways Group President and CEO, said, “Thai Tiger will be well positioned to offer low fares to even more parts of the Asia-Pacific region from its base in Asia’s tourism leader, Thailand. Bangkok is a key gateway to the whole of South East Asia and from its base at Suvarnabhumi Airport, Thai Tiger will be well positioned to also serve destinations in North Asia and the Indian sub-continent. Spreading our pawprint means greater economies of scale for Tiger Airways, which in turn enables us to lower costs and fares even further.”

Tony Davis and Ryanasia principal Declan Ryan will sit on the Board of Thai Tiger as nominees for Tiger Airways. Declan Ryan was one of the founding shareholders of both Tiger Airways and Ryanair.

Thai Tiger will operate a consistent Airbus A320 aircraft fleet in line with other airlines in the Tiger Airways Group.

About Thai Airways International Public Company Limited
Thai Airways International Public Company Limited is the national carrier of the Kingdom
of Thailand. Founded in 1960, it operates domestic, regional and intercontinental flights.
THAI flies to 69 destinations in 34 countries around the world. The company is 51.03%
owned by the Royal Thai Government through the Ministry of Finance. THAI has over
27,285 employees and a total of 91 aircraft in its fleet. THAI’s vision is First Choice
Carrier with Touches of Thai.

About Tiger Airways Holdings Limited¹
(Company Registration Number: 200701866W)
(incorporated with limited liability in the Republic of Singapore on 1 February 2007)
Established in September 2004, Tiger Airways now operates a fleet of 19 Airbus A320-
family aircraft and is committed to increasing its fleet size to 68 by December 2015. The
airline currently operates flights to 37 destinations in 11 countries and territories across
Asia and Australia. For more information, please visit http://www.tigerairways.com

¹The initial public offering of Tiger Airways Holdings Limited was sponsored by Citigroup Global Markets Singapore Pte. Ltd. and Morgan Stanley Asia (Singapore) Pte. (the ‘Joint Issue Managers’).

Head Office:
Thai Airways International Public Company Limited
89, Vibhavadi Rangsit Road,
Bangkok 10900, Thailand
Tel: (66) (0) 2545-1000, (66) (0) 2595-1000
Fax: (66) (0) 2513-0203
Web site: www.thaiairways.com
E-mail: public.relations@thaiairways.com

Source: Thai Airways International Public Company Limited release dated August 2, 2010

http://www.tatnews.org/tourism_news/detail.asp?id=4991

Figures tabulated by the Ministry of Tourism and Sports in January-June 2010, showed total arrivals by nationality of 7,515,025 up from 6,609,313 or up 13.70% over the same period of 2009.

This is because arrivals in the first half of 2009 had been hit by the impact of the global financial and economic crisis prevailing at the time, making this year’s rate of increase relatively high over a low base figure. It also reflects the fact that while arrivals to Bangkok were significantly affected, arrivals to Phuket remained relatively buoyant.

As the arrivals in June and July 2010 have picked up significantly, thanks to the launch of recovery programmes and a broad range of promotional packages, the Tourism Authority of Thailand officials are optimistic that it will still be possible to meet the year’s total arrivals target of 14.5 million arrivals.

On each of the markets, the following performance analysis, based on the figures tabulated so far:

EAST ASIA: East Asian visitor arrivals to Thailand comprise the biggest market share of all visitors. Of the 7.5 million arrivals in January-June 2010, a total of 3.67 million were from the East Asia region. Malaysia topped the list with 930,660 arrivals, followed by Japan 475,386, China 471,462, and Korea 382,394.

EUROPE: The January-June period saw a good growth rate of 15.86% to 2.27 million. The United Kingdom is the largest source market out of Europe, with arrivals of 412,035, up 2.28%. Germany is Thailand’s second highest source market from Europe with a total of 320,368 arrivals, up 15.89% over the January-June 2009.

Visitors from Russia to Thailand have been growing steadily over the past few years. In the early days, Russian visitors began flocking on charters to Pattaya to escape the harsh winters. Today, they have become mainstream travellers. In January – June 2010, Russian visitors to Thailand totalled 305,415, up 102.28% over the same period of 2009.

THE AMERICAS: Arrivals in January-June 2010 saw an increase of 3.64% to 431,381. The main market, the US, increased by 1.95% to 310,454. Arrivals from both Brazil and Canada showed positive growth of 17.29% and 3.88%. Thailand’s image of good value for money remains a powerful magnet that continues to attract tourists.

SOUTH ASIA: Arrivals in January-June 2010 grew by a strong 15.99% to 446,935 with all markets doing well. India has become a primary market with arrivals up by 18.39% to 344,063, making it the region’s fastest growing market. Thailand is enjoying huge popularity among Indian niche markets; such as, weddings and honeymooners.

OCEANIA: Arrivals in January-June 2010 grew by 11.87% to 367,540 visitors. Australian visitors were up 13.00% to 326,084 and New Zealand +3.00% to 40,255. This is largely due to the influx of low-cost airlines like Jetstar into Phuket.

MIDDLE EAST: Arrivals in January-June 2010 grew by a strong 22.20% to 261,657 with all markets showing a positive growth. One of the most promising is Iran with arrival only at Suvarnnabhumi airport up by 51.86%.

AFRICA: Arrivals in January-June 2010 were up by 21.71% to 56,908. South Africa is a major market and has showed significant growth of 39.09% to 23,434. It is expected to perform strongly in the year ahead in the wake of relaunch of Thai Airways’ flights to Johannesburg.

Source: Ministry of Tourism and Sports

According to the TAT Governor Suraphon Svetsreni, the strong market recovery efforts being exerted by the Thai tourism private sector, Thai Airways International, as well as the high-profile promotions such as the “Thailand Today” mega-fam trip should make it possible to make up lost ground in the second half of this year.

Asian economies have showed steady economic improvements and the short-haul markets such as India, China and Indonesia are showing great promise. At the same time, the airline industry is adding more flights from key markets; such as, Australia, Japan, and Singapore. Many countries are also relaxing or withdrawing their travel warnings to Thailand, and new markets such as China, Russia and India are showing significant growth, Mr Suraphon noted.

Contact information:
International Public Relations Division
Tourism Authority of Thailand
Tel: +66 (0) 2250 5500 ext. 4545-48
Fax: +66 (0) 2253 7419
E-mail: prdiv3@tat.or.th
Web site: www.tatnews.org

http://www.tatnews.org/tat_release/detail.asp?id=4983

http://www.nationmultimedia.com/home/Bt63-billion-expansion-of-Suvarnabhumi-Airport-app-30136504.html

BANGKOK, 3 August 2010 (NNT)

http://thainews.prd.go.th/en/news.php?id=255308030010

Are their economies in good shape?
Though conditions differ from region to region, on balance the answer is yes. For example, in holdings of foreign reserves, emerging markets have surpassed developed countries. Actually, that began in 2005 and the spread in foreign reserve holdings has just widened.

Also, the Debt-to-GDP ratio for emerging markets is much less than that of developed countries. (See the best business deals of 2009.)

Where do things look better than investors think?
Russia is the place to start, because that’s where we are finding better values. The biggest challenge facing Russian companies is that many are very leveraged. But that said, Russian banks are flush with cash so I’m hopeful they will extend loans to help these companies restructure. A related bit of good news in this regard, and this holds for many emerging markets, is that interest rates have come down quite a bit, which makes it easier for companies to restructure. While it’s difficult to make specific predictions, we would expect an appreciation of the Russian Ruble in single digit terms [over the next year] and an appreciation of the equity market in double- digit terms. (Comment on this story.)

Isn’t Russia basically an energy play?
Energy is key because it provides a large part of the government’s tax revenue. But Russia has also been aggressively diversifying; they’re even looking at developing high tech. Russia is quite ready for this kind of expansion because they are rich in many minerals.

Within Russia we are looking at both oil and heavy manufacturing companies. And then further down the pike we would be looking at consumer goods because per capita income in Russia is higher than, say, China and India. Of course, longer term the bigger potential for consumer products remains India and China, but near term Russia looks very interesting. Russia has many opportunities in the consumer area. For example in cosmetics, Oriflame, the European company, has a large and growing market in Russia. (See 10 things to do in Moscow.)

Moving to Asia, with world growth sluggish are those emerging economies at risk?
China is now the biggest destination for exports from Asia, whether it be Japan, Taiwan, Korea, etc.. With China’s growth of 8% to 10%, these countries will tag along. For example, we have major holdings in Thailand, and people say, ‘Thailand, what are you thinking’ given its political troubles?’ But Thailand has been one of the best performing markets this year.

After a big run up, are emerging markets getting richly priced?
Indeed if you look historical valuations, today’s numbers are quite high. Looking forward we’re more or less in the middle of the valuation range. During the last 25 years the high point for emerging market companies was about 3 times book value, and the low point was about 1 times; we are now at roughly 2 times, so we are in the middle. That’s why investors need to be careful.

Africa just had a successful World Cup tournament. What’s the investment outlook for that continent?
Africa is going to be a ‘frontier’ market for quite a while — that’s one tier less developed than emerging markets. I think ten years is about right in terms of getting it developed. It’s going to take a lot of time because you need to get infrastructure in place. Even South Africa, which has a pretty good infrastructure, is having a lot of difficulty organizing housing and other parts of the economy to meet the expectations of the population. It’s going to be a big challenge.

The good news is that countries like China, in particular, but also India and other emerging market countries are finding their way to Africa in search of raw materials, in search of markets. So we’re seeing a lot more investment in those countries, which all looks very well for their growth going forward. For Africa as a whole, we are most bullish on Nigeria and Egypt. (See the top 10 financial collapses of 2008.)

Tell me about Eastern Europe. Is the general European slowdown hurting that region much?
Eastern Europe in particular has got lots of pluses. You’ve got a well-educated population, well-trained population, labor rates are low etc. But they’re now suffering a lot of issues of their own making, because their banks were lending mortgages in Yen and Swiss Francs, trying to chase low interest rates without looking at the possibility that their currency would go crashing and their clients would be in big trouble. So they have all these issues to deal with and it’s going to take time to work it out. But, again, we’re talking maybe 2-3 years. In the meantime there will be selectively, some opportunities in the markets. But it’s still a little early for that. (See pictures of the global financial crisis.)

Which Eastern European markets look most interesting now?
Number one is Russia, but then looking at East European countries, Turkey would be first, then Poland, then Romania, in that order.

If we just take a 10-year horizon, what kind of return is reasonable to expect from emerging markets?
There’s no way for us to predict what the returns are going to be from a diversified portfolio of stocks. For emerging markets, it’s generally been roughly 9%, that’s been the average over the many, many years. Of course, there have been years like last year when you could make 60%, but I’m talking about the ups and downs over a long period of time.

And then you compare that 9% average return to what you would expect from developed markets, say 3% or 4%.

So it’s a pretty good dollop of extra return
Yeah, there’s a pretty good spread. There’s no question of that because there’s a big spread in economic growth. We’re expecting maybe 2% or 3% growth for the developed countries this year and with emerging markets the average is going to be over 5%, so you’ve already got double the rate of growth in the emerging countries.

By John Curran 27th July 2010