New hotels as well as smaller housing developments are in evidence in anticipation of a steady rise in tourism. Fewer than three years after the tsunami reduced much of Khao Lak to rubble, an encouraging revival has taken firm hold with several hotels rebuilt and operating plus a smattering of other property development taking place. Anupong Sa-nguannam, the managing director of Ramada Khao Lak Srithanawut Company, which owns the hotel of same name, said that some groups of people were undertaking small-scale development in this idyllic coastal resort just an hour’s drive from Phuket airport.

Among them are Thais married to Swedes, and other Scandinavians who already have clients in hand. The Scandinavian projects are up on the hills where land is cheaper, similar to developments undertaken by their peers in Hua Hin. A larger-scale development is being undertaken by Thai Privilege Marina Resort & Spa Company owned by Surangrat Chirathivat. Her company intends to spend 1.4 billion baht developing Khao Lak Riverine, a boutique villa and spa with units of 114 to 146 square metres and prices ranging from 5.9 million to 7.9 million baht.

Ramada Khao Lak is also considering suitable housing types to be developed on vacant land behind the hotel. “I am certain everyone is looking in the same direction and once we reach a certain point property development will grow,” says Mr Anupong. The good point about Khao Lak is that land prices are not as steep as in Phuket. Seaside land ranges from 16 to 18 million baht a rai, decreasing in price as one goes farther north. Mr Anupong notes that Khao Lak’s beach is long which means that development is unlikely to be clustered in one area. “So there would not be too much commotion for visitors and retirees, it would still be charming for them.”

However, even after the deadly impact of the December 2004 tsunami land prices did not drop because everyone here has a fighting spirit and wanted to battle on. Though there is hardly any trace of the tsunami’s destruction left, with up to 85% of the hotels having been rebuilt _ more than 4,000 rooms will be available at the end of this year _ assistance from the authorities has dropped off. “When the disaster struck help came very fast but lately, over the past one year, no infrastructure has been developed here at all,” says Mr Anupong.

The budget for the rehabilitation of the six Andaman provinces totalled 1.316 billion baht but Phangnga, where Khao Lak is located, obtained only 45 million, mainly for safety, environmental improvement and community economic development, he said.
Phuket and Krabi received funds for garbage and sewage treatment plants, something Khao Lak does not have, Mr Anupong pointed out. Although hotel operators have installed the necessary facilities, small businesses such as restaurants certainly feel their lack. “Actually the government could give more than this considering that of the six provinces the one that suffered the most was Khao Lak (in Phangnga).”

Doeke Bonga, general manager of the Ramada Khao Lak, said that hoteliers were now facing another challenge in the form of a 2% provincial tax, the maximum level that provincial authorities can impose, and they are opposing the move. “This will be counterproductive especially as most hotels are in a critical phase right now. They have been funded with loans and this is the first year they start repaying their loans. If we get hit with additional 2% tax it has a detrimental effect,” Mr Bonga said.

Mr Anupong suggested a compromise in which authorities could start by collecting a nominal sum, say 0.25% or 0.5%, and gradually scale it up as business improves. Mr Bonga also chided the Tourism Authority of Thailand and the government for mainly focusing their promotional activities on Phuket and Krabi. “From the Phuket perspective I understand – there are so many jobs at stake the Phuket market is so competitive – but Khao Lak is a different market and requires different promotions and tactics.”

Ordinary people can help Khao Lak by holidaying here but it seems Asians are still a bit reluctant to do so being afraid of ghosts. “In terms of consumer confidence, I think it will take some time because the media have such an effect on the image of the area, especially in Asia, much more than in Europe,” Mr Bonga said. “I spoke to some Malaysian guests the other day and one said that when he told his friends he was coming here his friends said, ‘Are you crazy? There’s nothing there, Khao Lak is completely destroyed.’ “And Japanese and Koreans are concerned about ghosts while Europeans don’t have that issue. Europeans also have a different mindset in the sense that they are happy to contribute to the reconstruction.”

However he is optimistic about Khao Lak’s future, foreseeing that the resort will develop rapidly and in five years’ time it will definitely be one of Thailand’s main tourist destinations. “Also because Phuket is starting to be overbuilt, whereas Khao Lak is very natural, very low-key, very untouristy in a sense, so it still has local charm. “Also because the majority of the people who are here are people who have southern friendliness, we don’t have many imports or immigrants as they do in Phuket so the atmosphere is different.”

Just a day in Khao Lak is enough to make some urbanites toy with the idea of giving up their jobs and settling here for good, earning income by operating a small business. In Mr Anupong’s opinion those who don’t need to borrow to start a small business might make it but they should realise that Khao Lak is still a highly seasonal market. “This is only the second high season [since the tsunami] for some hotels, and could be the first for others, so everyone is hoping that occupancy will be good, but what happens remains to be seen. “My advice to new investors is to wait and see how this season fares.”

Mr Bonga is all for private individuals investing in small properties here. “Let me put it this way, if I had the money now I would buy in Khao Lak because I feel Khao Lak today is like Phuket 15 years ago, it’s at the beginning.”

Written by: Nina Suebsukcharoen
Published on: Bangkok Post