One of the complaints that have cropped up continuously has been that Pattaya is becoming “too expensive”. While some of these complaints are unfounded and point to people remembering “the good old days” that perhaps never existed quite as they remember; in some cases, it may be true. A common criticism, especially since the opening of Terminal 21, is that the price of many western meals in now more expensive than London. The argument that products are imported only goes so far and in reality, is only a partial justification.
So will prices start to come down now that normality is returning?
It shouldn’t be overlooked that one of the main costs of a holiday to Pattaya is the cost of the flight and this certainly needs factoring into the equation. The consensus is that flights are likely to be more expensive after the Covid-19 epidemic due to airlines only being able to operate at a limited capacity. However, conversely, there is the argument that demand will be down due to restrictions in place in other countries and the fact that people’s income has been adversely affected.
The chances are that in 12-18 months, prices will be on a parity with what they were at the end of 2019 and beginning of 2020 when the virus appeared to be confined to China.
Hotels in Pattaya had been experiencing under-occupancy in the low season before coronavirus with many already offering discounts. The only ones that were reported to be fully booked were those welcoming Chinese tour parties. With many having been forced to close temporarily, it would appear inevitable that they are going to need to offer some incentives to entice people to return. In reality, these lower prices will probably need to remain in place for some time which will benefit the city overall although not perhaps the hotels themselves!
Bars & Restaurants
Restaurants, in particular, were previously criticised for their prices and while some can justify their charges, the majority can’t. With competition likely to be intense, prices could well be a factor when it comes to survival. Many businesses aimed at the western market will be relying on expats in the short-term. While retirees are probably unaffected, those who are working are likely to have been hit hard and even those that haven’t, may not have the job security that they previously enjoyed.
It is likely that peoples spending in bars and restaurants, even taking social distancing out of the equation, is expected to be significantly lower. More reasonable pricing could be something that stays in this sector which, long-term, again is likely to benefit everyone.
One area that is likely to remain unaffected is supermarkets. The vast majority of produce is grown or manufactured locally with little scope for any significant price reductions. While the cost of imported products may come down with airlines looking to increase air-freight to subsidise some of their expenses, this is once again, a “wait and see” situation. At this stage, it is unclear whether any changes would be short, medium, or long term.
Vehicles and especially cars in Thailand have long been thought of as over-priced with this being particularly the case with the second-hand car market. We have seen in the past that the Thai government has tried and failed to bolster the market by offering deals to Thai nationals to support the car manufacturers, many of whom have plants in Thailand. It would seem unlikely that any such scheme would be introduced again. However, most predict that demand will fall with the majority of people, either seeing their income fall significantly or now have less job security.
Something that many happen is that the manufacturers and dealerships try to make their vehicles more attractive. It may be by reducing the prices to try and spark demand or offering enticing credit deals. It would appear that any offers which are made would target both the Thai and the expat market. It has been mentioned on some forums that second-hand vehicles may become more affordable with individuals needing to raise money quickly. However, there is little evidence to support this theory.
As always, there has been significant speculation about the Thai property market with pretty much every possible scenario being suggested. One idea does appear to be most likely, in the short-term at least, is that there will be an increase in the number of “fire sale” properties. These are properties that people are often looking to sell quickly for a variety of reasons. It should NOT be assumed that the seller is always desperate to sell and indeed, often the seller still walks away with a handsome profit. These kinds of sale can be a win-win for all parties.
Demand for budget properties is likely to fall, again in the short-term at least due to travel restrictions and the fact that many people around the world have a lower disposable income. Several properties in this bracket are also likely to be put onto the resale market with increased supply causing prices to stagnate or fall. It would appear likely that this is the area of the property market that will suffer most, certainly initially, but will bounce back after 18 months or so.
Luxury properties, as always, will be mostly unaffected by Covid-19. The prices and demand for quality usually remain consistent regardless of the economic climate, and this is anticipated to be the case again. Those looking to grab a bargain during this time may be disappointed!
Rental prices will be affected similarly to hotels with demand and prices expected to fall significantly to encourage greater occupancy. How long this lasts will be very much dependent on global market conditions in the prevailing months after the pandemic.
Pattaya, like everywhere in the world, will have to be accustomed to that common phrase “the new normal”. There will inevitably be winners and losers from this whole affair. Pattaya is likely to become more affordable again in many aspects or at least be reined in with some prices rising to inexcusable levels before the pandemic. How long these changes will last is very much open to debate.