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Thailand - November 2007
Defining privileges in the Thai long stay market

Property Report Thailand

 

Thailand's exotic, friendly charm attracts tens of millions of visitors each year, with more and more tourists opting for a longer stay, either in retirement, for business purposes or simply as a lifestyle choice.

Over the last decade, the Royal Thai Government has endorsed certain 'foreigner privilege schemes' in order to attract high spending tourists by offering greater ease of travel and business opportunities, but how useful are these schemes and what do they actually offer members?

In 2001 the government initiated the Longstay Tourism Development and Promotion Project, and with that the Thai Longstay Management Company was established in December 2001. This private company was set up in order to facilitate longstay for tourists over the age of 50. With a 30% stake belonging to the Tourism Authority of Thailand, it was a joint venture between the private and public sector, a unique privilege and service provider for retirement tourists, providing a obe year multiple re-entry visa, fast immigration, accident insurance and many privileged discounts ranging from hotels and resorts and spa's and over 2,000 shops around Thailand. Yearly memberships were available from 12,000 Thai Baht without the visa, up to 72,000 Thai Baht for the most complete package.

Despite some success, Thai Longstay Management was troubled by management issues and had to reshuffle its internal structure several times. Just last year, having firmed up a strong and dedicated team, the programme reached 300 members. Then in March 2007, TLM launched a new service called "Thailand Second Home Longstay Project", which was presided over by his Royal Highness Maha Vajiralongkorn and Her Royal Highness Princess Consort Srirasmi. This claimed to allow foreigners to purchase a property in Thailand on a 30-year renewable lease, with carefully established legal assurances included in the deal to gain investors' trust.

Despite political and legal uncertainties, the Thai Longstay Programme remains active and has continually tried to re-evaluate and improve its services wherever possible to match the market conditions. Those behind the scheme say the main aim is not to maximise profits, but rather to help develop a sustainable long stay business in Thailand.

Thailand Second Home, however, is a different matter. According to Managing Director Khun Chaiyakarn Sudampanthorn TLM has decided to put the programme on hold until the general election has been held and a new government is in office. The company was forced to take an honest and transparent approach with members, in order to make sure that they do not make any promises they later cannot keep. "Generally speaking, any party that comes into government will support long stay tourism in Thailand," said Khun Chaiyakarn, "so we'd rather await for a more secure and stable environment and re-endorse the program for our future members, giving them the confidence to trust in us completely."

A few years after the Longstay Programme was initiated, the Thailand Privilege Card Company was established and in November 2003 launched its own Thailand Elite membership service, aiming to create a country club for Thailand's richest business tourists. Once again involving the Tourism Authority of Thailand (TAT), the programme was launched with a huge fanfare amid promises of exclusive benefits such as discounts on spas, fast-track immigration checks at airports and business introductions for "VIP foreigners who have high purchasing power" to buy into what promotional materials called the world's first 'countrywide country-club'.

Confidently backed by Thaksin Shinawatra, who was sure he could instigate a change in the strict Thai foreign ownership laws for these economically boosting members, the progamme carried high hopes and expectations. However, these soon faded when legal changes for foreigners never manifested and the card was instead marketed for its visa and luxury privileges. For one million baht, investors can now purchase a lifetime membership and gain a five-year multiple entry visa for life. Although this means members will not have to leave the country every ninety days as other foreigners do, they still have to register at the immigration office and pay a 1,900 Thai baht fee. This visa privilege has become the card's biggest selling point, alongside its elite country club image, which provides a city base in Bangkok where members can entertain clients for meetings or simply use the available facilities. Two million Thai baht insurance coverage, as well as free and discounted access to some of Thailand's top class golf courses, spa's and other facilities adds to the appeal.

Expecting to draw high membership numbers by 2008, the programme has instead run into major debt, with just 2500 members to date. According to a Bangkok Post article on the 9th of July 2007, "Thailand Privilege Card Co. Ltd has made hundreds of millions of baht in losses...the company retained a research centre run by Thammasat University in order to study ways of improving its viability." The report proposed that Thailand Privilege Card (TPC) increase its membership fees, cut incentives and improve management, which would allow them to reduce losses to around 145 million baht by 2009.

The Marketing Department at Elite International Asia, Thailand Privilege Card's marketing company, recently announced that the company was fully endorsed by the current Thai government, who had taken a deep look at the programme, based on the Thammasat University study. This, they said, assured the government that the programme should be fully supported and it will therefore continue on track. Thailand Elite has already reduced unlimited access to golf courses and spas to 24 times per calendar year as of October 2007, and membership fees will increase from one million to one and a half million Baht as of 2008.

As a result of recent changes, many foreigners now seem to be wondering what the point is of joining either of these schemes. This is a question that requires a great deal of thought and consideration. Business visa's in Thailand are generally restricted to a maximum of ninety days and require a visit to a Thai Embassy abroad. Both programmes provide welcome visa assistance and fast tracking through immigration. Despite offering a longer five-year multiple re-entry visa, Thailand Elite still requires members to visit the local immigration office every 90 days, whereas Thai Longstay offers a one-year multiple re-entry visa with no further stamps required. Thai Longstay could also be considered a lot cheaper, depending on the amount of time required. Thirteen years of TLM's most comprehensive program costs the equivalent of a lifetime membership fee with Thailand Elite, but the privilages may outweigh the longevity.

Thai Longstay's plans for the future include a word of mouth strategy to recruit more members and also a "TLM Family Campaign", which entitles an existing member who has recommended another member to a 2% discount on the next year's membership fee. Whilst Thailand Elite plans to establish more of a community amongst its members, creating networking and business opportunities as well as attempting to improve services wherever they can.

Thailand Second Home may still be worth waiting for, it seems, as this programme means you can purchase a lifetime membership for 500,000 Thai Baht and then securely purchase a home to use as you wish for the rest of your life. It also includes benefits such as discounted TLM membership rates and opportunities to realise an income through the management of Thailand Second Home.

Post election confidence may lead to the creation of yet more privilage schemes in Thailand, or add to the benefits that already exist. As is the case with many private investors, a common strategy seems to be "wait and see".
 

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