Tourist destinations in Thailand go through a pattern of development that varies very little from place to place. It can be instructive to be aware of this pattern if you are an investor so as to spot a possible opportunity for being there at the beginning of a new lucrative trend. For the tourist it can be useful to know all the options available so the right one can be chosen.
Generally, a tourist destination in Thailand starts off attracting the lower end of clients. This is backpackers and independent travelers. The facilities and amenities are basic. Often power is supplied by a generator. If there is internet it is very slow, and there are few choices about where to eat and stay. At this stage of development tourists stay in simple wooden bungalows with fans and mosquito nets.
As a place becomes more popular the accommodation starts to improve along with the infrastructure. Concrete bungalows with air-con and hot water become available. The influx of more money to an area often improves the roads and mains electricity becomes more common.
At the same time tourists with more money appear. They have heard about the exciting new destination and unspoiled nature and they want to see what all the fuss is about. These people have more money to spend on their holiday. As a result more bars and restaurants spring up offering better and more expensive wining and dining options.
Once a tourist destination in Thailand becomes a ‘hit’ developers with an eye for a bargain often appear on the scene. They build luxury resorts with swimming pools, charge high prices for food and drink and use a network of overseas travel agents to pull in the customers.
What was once a travelers’ secret becomes common knowledge. Not just Europeans start holidaying in the place but also Russians, Chinese and Japanese. The place assumes a gloss of desirability and people start to buy land in the area for private residences.
The island of Koh Phangan hit this point in 2007. Land prices started going up every year as people realized that the island was far more beautiful and unspoiled than the neighboring island of Koh Samui. Especially the Thong Nai Pan area in the north-east attracted a lot of attention from those looking to invest in land.
In 2008 the land price bubble burst but all is not bad news for the area. Several private villas have been built in Koh Phangan. In the hills around Thong Nai Pan there are a few luxury villas for rent. The price to stay in a hotel in Thong Nai Pan has soared to over $1,000 a night. It is at this point private villa rental in Thong Nai Pan becomes not only a viable business but a good budget option for tourists.
Places such as Sunrise Villa in Thong Nai Pan Noi can be rented for as little as $200 a night. For that renters get 3 bedrooms, not one. They also get a fully equipped kitchen, TV, hot water, air-con and all the amenities offered by the hotels but at a fraction of the cost.
For those put off by the high prices now being charged to stay in Koh Phangan it is worth checking out villa hire. The island has reached that stage in its development where there is enough demand for better value accommodation to make building luxury villas viable despite the current world house price downturn.