Phuket risks losing investment over the next few years to emerging countries such as Vietnam and possibly Myanmar, officials were warned yesterday.
In a meeting chaired by Vice-Governor Dr. Sommai Preechasin to discuss the impact of the THB 300 minimum day wage, the former President of the Phuket Human Resources Management Club, Prasert Monprasit, said that especially in hospitality and property fields, the east coast of Vietnam will increasingly be a target for investment, both Thai and foreign.
He cited as an example the recent sale by the Banyan Tree Group of two hotels in the Laguna Phuket complex – the Dusit Thani and the Laguna Beach Resort – and Banyan Tree’s investment of US$ 900 million (THBB 27 billion) in its luxury resorts and property project in the central Vietnamese town of Hue, the first phase of which is due to open this year.
“It’s likely that investment flows into Thailand will slow down until 2015, when the Asian Economic Community comes into being,” Prasert said.
“The main reason is that Thai business conditions don’t help investors to make adequate profits.” Among the difficulties for investors he cited Thai laws, including regulations on Phuket controlling development, and limiting land use and building capacity.
Prasert said he believed, too, that labour is another obstacle to investment, as many staff, particularly in Phuket’s hospitality industry, are over 30 years old. Because of their age, they are resistant to raising their standards, and avoid skills training programmes.
In addition, the cost of doing business is high in Phuket, where almost zero unemployment means that employers who want to retain staff must offer them more “welfare” perks such as housing and meals.
On top of that are concerns about Thailand’s current political stability and security in general.
“For example, the report of [the murder of Australian travel agent Michelle Smith last week] will definitely affect the image of Phuket among investors, possibly shaking Phuket’s investment credit,” said Prasert.
The THB 300 minimum wage policy has yet to have a discernible effect in Phuket, he said. “But it could make investors step back and consider whether this is a profitable place to invest.”
Source: The Phuket News
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