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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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