Stickman's Weekly Column February 22nd, 2015

Gogo Bar For Sale, The Devil Is In The Details



In a city once best known for its red light bar areas, these days business listings in Bangkok cover industries as diverse as renewable energy, precision engineering and facilities management. The days of business broker listings being dominated by opportunities in the nightlife industry are the distant past. Bar for sale listings are interesting not so much to know which bars are for sale, but because sometimes listings slip through which reveal more about the bar and the wider industry than a conversation with even the most gregarious bar boss who has had too much to drink.





Business108.com has a listing titled Large Go Go Bar with Outside Bar and Pool Tables in Nana Plaza with a 441-word description and 6 low-quality photos of the bar. This listing gives an awful lot away about not just about the bar offered for sale, but the bar area in which it is located, Nana Plaza.

First, to identify the bar. The description states "This ground level bar is 3 shop-houses in size and is in arguably one of the busiest night-time venues in Thailand. Inside is over 300m2".

3 shophouses in size on the ground floor and pool tables means it could only be one bar, Underground. This is confirmed by the crude and ineffective blurring of the signs inside the bar copied from the London underground train system.

The lengthy description describes the bar with the sort of enthusiasm only real estate agents, business brokers and salesmen are capable of.

"Rent is 660,000 baht" confirms what I have been saying for the last 2.5 years – that rents are going to kill Nana Plaza.

"Security is 45,000 baht a month" is a princely sum for security guards who are usually paid 20 or 25 baht per hour. The entrance of the plaza has a handful of security guards and their total combined salaries is almost certainly less than 45,000 baht…but they're nothing to do with Underground. Ahhh….security….I get it! I can't say I have ever heard it called that before but given that other bars also pay around that amount for security, it makes sense.

"Asking price for this business is 9.5 million baht" strikes me as keenly optimistic, especially when you factor in "each contract renewal, key money of 3.5 million baht is required to be paid to the landlord." Renewals are every 3 years so averaged out that's essentially another 100,000 baht a month on top of the rent – but it must be paid in a lump sum in advance.

There is also "a refundable security deposit of 2 million baht that must be paid to the landlord upon taking out the initial lease agreement". The security deposit would appear to be calculated as the monthly rent x 3.

It should be noted that I am aware of a clause in the contracts of all bars within the plaza which states that there is a 500,000 baht transfer fee if the owner wishes to transfer the lease to a new leaseholder / or in other words, wishes to sell the bar.

The listing features some classic lines, my favourite being "The bar only re-opened in November 2014 after a 3 month refurbishment period so sales data is not available." My initial thought was this is just plain wrong, but checking the date the ad was posted – Christmas Day – the bar had only been open for a weeks after the basic refurbishment so any turnover listed may not have been representative of what the bar could do.

Doing the numbers, if you wanted to buy this bar, this is what I calculate you would have paid come July, factoring in the purchase price, the key money due in July and the 4 months' rent to be paid before the lease renewal:



Asking price 9.5 million
Key money 3.5 million
Refundable security deposit 2 million
4 months rent (March – June inclusive) @ 4 x 660,000 2.64 million
Nana Plaza bar transfer fee 500,000
TOTAL 18.14 million baht



18.14 million baht is, at current exchange rates, about $557,000…a significant chunk of change. 2 million baht of that is refundable (assuming you see the lease through to the end), but you're still looking at around half a million dollars to enter an industry in serious decline, an industry drawing fewer of its traditional visitors, an industry in which the average spend per customer has plummeted, an industry in which most businesses are struggling to find staff and an industry which operates in a grey area and as unlikely as it may seem, an industry that the current nationalistic ultra conservative government could crack down on further or even outlaw at any time.

The ad states that, "A sister bar close by and similar to this one, sells (on average) around 1.2 million baht monthly." The sister bar is, of course, London Calling, which is run by the same people. With the fixed costs in Underground so high, 1.2 million baht monthly income wouldn't come close to breaking even, let alone recovering the original investment.

Underground was long known as Voodoo and since the name change the bar has changed format multiple times. When Voodoo closed the lineup was exclusively post-op ladyboys. After the name change, Underground opened with ladies and coyotes with not a ladyboy to be seen. That didn't work so the coyotes were dropped. It then closed for a couple of weeks because there weren't enough dancers. It reopened with coyotes and now it seems to be a mix of ladyboys and coyotes – the two things most punters are put off by! The bar had a disastrous 2014 and was one of the worst performers in the plaza.

It's not that long ago – only a few years – that big name Nana Plaza gogo bars changed hands for serious money. A couple of Nana bars were priced well north of, and reportedly sold for around 40 million baht. With the state of the industry and the level of uncertainty, those days are over.

The listing for Underground provides proof of a number of points touched on in this column over the past year. Unless the rents are reduced and visitor numbers surge – and I don't know anyone who thinks either will happen – the future of Nana Plaza, at least in its current form, has to be questioned.








Where was this photo taken?

Bangkok


Last week's photo was taken of a drinks van on Soi Rambuttri, near Khao San Road. It was not Sukhumvit soi 11 as many thought (such vans are no longer allowed on that soi).


FROM STICK'S INBOX (These are emails from readers and what is written here was not written by Stick.) Preference may be given to emails which refer to the previous week's column.

EMAIL OF THE WEEK – It's a generation thing.

Are the bargirls today more attractive than the bargirls of yesteryear? I'm 36 years old and the first time I was in Thailand was 7 years ago. Were they prettier when I first went there compared to now? I would say they are the same. I believe the reason we find women attractive is because of the generation we are in. For example, the tattoos, make-up, braces being back in fashion, not to mention "Brazilians" appeal to men today – why? Because that's what the fashion is! Do I think it's attractive? Yes, I do! I don't have tattoos myself as I think they are frowned upon in general society. I personally wouldn't get one myself but for some reason I find them attractive on Thai women – perhaps it's the rebellious thing? The girls are attractive now because they wear and have the fashion which is in right now. Hence we are attracted to them. Back in the '70s I bet guys would think that the girls were gorgeous. Apart from being natural, yes, the cute natural look is definitely attractive, there's also the fashion. What's the bet that the clothes the girls wore back then were very attractive and was all in fashion and guys at the time found it appealing. You showed a picture of a girl back in 2004 who wore jeans and a T-shirt. Apart from the outfit looking good and, excuse the expression, "not being dressed like a prostitute", the fact is that back in 2004 that's what the girls wore in nightclubs all over Melbourne, and me being 26 – hell yes, I found the clothing worn by women such as this at the time very sexy! I think it's different for every generation. The last generation thought theirs was better and sexier than this generation and vice-versa. Of course people will think that. There's a biological theory going around that says it depends on when are hormones were at our peak. This relates to women, and more interestingly, music! Do you ever wonder why people say that songs like "Smoke On The Water" and bands like Pink Floyd and Jimmy Hendrix were extremely popular? I've listened to those bands and can't figure out what the appeal is. But I bet any money that the reason they were popular was because of the age group (16 – 25 year olds) which found the music extremely appealing because of their hormonal peak which made them popular. I can confirm this theory as when people ask me what music I like best, I always say the 90's by far. This was pretty much when I was in my mid teens to early twenties. Then by the time I hit 28, I found the music going downhill rapidly. Now I can't stand listening to the radio! I could say the same for the girls I was dating…

Modifications and markings welcome.

I never noticed the changing of the girls over the years. I'm the opposite of you – I love tattoos, straight noses and fake boobs. I think the girls today look so much better than the ones in your pictures (but at the time, I thought they were fine).

Hard work, hard body.

I think what used to happen back in the day (a bit before 2004), was that the girls had minimal schooling and worked in the rice fields from an early age. The effect on their bodies was rather like sending a kid to the gym for a decade rather than school, all lean muscle under velvet skin and a certain heat to their bodies that is entirely lacking in today's babes. For Westerners meeting these girls for the first time it was a rather electric shock of pure lust that addicted them. Nowadays, as well as getting a reasonable education, they are well fed and get little exercise. Of course if you have not experienced the old type of neon girl you have nothing to compare it with and therefore feel no loss. There is no way Thais are going back to the old life so there's not much chance of finding those kinds of girls in country. Like many, the current crop is not to my taste at all.

The dream is over.

I've just recently come to the realisation that I'm going to have to move on with my life and stop the incessant trips 3 or 4 times a year. It's never been the bargirls for me at all but more the sanuk with other expats. I guess I've always been searching for a repeat of my first time when it was all exciting and new and exotic. Things have definitely changed but then again so have I. I suspect I'm never going to experience Thailand again the way I did in the late 90's and early 2000's. So maybe it's time to move on and keep the memories of the Bangkok that I love as they are.





Are the Thai places really better?

I was taken to a karaoke place by a Thai guy this week off Rama 2, in the middle of nowhere really. He has 4 wives and 11 kids, one phone for giks and another for his wives. He knows what is what. This place was about the best he said around there, northern girls and suay mark. They were all fat and the price was 2.5K for short time. I'd rather give that to the Mrs. to shut her up!

The farang fuzz.

Here in Pattaya on Sukhumvit today there were 2 farangs dressed in Thai cop uniforms waving farangs over. I ate at Foodland, walked back to get a photo of them but they were gone. I walked the whole way down to Soi Batman and had 3 soda waters in the VFW and swapped some stories. These 2 farang cops have been handing out tickets on the Arab soi behind Walking Street that takes you on to 2nd road. I quit going that way because of them. Of course they only single out farangs. I'm zagging and zagging all around town trying my best to avoid them! Even back roads like in front of the Full Love Inn off 3rd behind the Buffalo Bar, on Soi Kao Pai etc plus all the main roads there are checkpoints every day.

Farang fatigue.

Thailand changed for the better for quite some time, but at some point any country where corruption is so widespread, things sadly have to take a turn for the worse. But I do wonder if the real turning point for expats was when farang-fatigue set in. Suddenly, Thais (using a broad brush here, I know) at least in destinations such as Bangkok, Pattaya and Phuket, stopped being customer friendly. When I say suddenly, I mean that when I noticed a big change was when I had a full year between trips 4 – 5 years ago. The level of service and genuine politeness evaporated somehow. Thais smile to hide their true feelings. The smiles are still there, but you can feel they are often less genuine. I will however say one thing. When In Thailand I do spend more and more time off the beaten path. Especially the Phang Nga area. I must say that the Thais in those areas are nice and the smiles still have a warmth to them. I guess the guys who spend so much time (or all their time) in the gogos should take a trip there to reboot. I was once at a local village party when the ice-cream guy came driving by. I think I pretty much emptied his freezer handing out ice-creams to all the kids. They had big smiles (ok, those were technically paid for) but all of a sudden everyone wanted to buy me drinks and have a chat. Perhaps to decide if I was jai-dee or ting-tong, who knows, but it was a great night anyway. Good times can still be had.



Girl of the week
Stella, escort
exclusive with PureBangkokEscorts.com,
at 19 years old she is one of the youngest escorts in Bangkok

Pictured with last week's girl of the week, Daisy. Yes, you can take 2.



Pure Bangkok Escorts



Mandarin in Nana Plaza has had an injection of new girls and is one of the better bars in the plaza at this time. I'd say Mandarin, Erotica, Suckers and Rainbows 1, 2 and 4, are probably the pick of the bars in the plaza. The Japanese flock to the Rainbow bars which consistently have the prettiest ladies so be aware that some Rainbow girls have little interest in white guys. You should also note that Suckers is one of half a dozen bars in the plaza that has a mix of ladies and ladyboys – and it's not always clear who is who.

A pool tournament held on the ground floor of Nana Plaza on Tuesday night didn't go down well with some bar owners as tables and promotional material blocked the entrance to some ground floor gogo bars on the left-hand side giving bar bosses something new to grumble about.

It really wasn't a good week in the bars and I am reliably informed that this past Friday was the quietest of the year so far with two bar bosses solemn at how few customers were about.

Candy Land 1 in Nana Plaza is worth visiting on Fridays and Saturdays when it gets an extra bunch of girls in, including two twins who play in the Jacuzzi. From Sunday through to Thursday Candy Land, like a lot of the bars in the plaza, can be quiet.

Last week's column was full of news items about the joint crackdown being carried out by the military and the licensing authorities on bars in Pattaya operating bonking booths, with a particular emphasis on Soi 6. The crackdown continued this week with bars in soi 6's sister soi, Soi Chaiyapoon, visited. The saucy soi which runs up from Soi Buakhao is full of massage houses with ladies who have no idea how to give a proper massage. On the premises action in Pattaya is now a no go. While some are saying it will be months until things revert to normal, I'd be surprised if it lasts more than another a week or two.

There were similar raids in Bangkok on massage houses in Sukhumvit soi 22 a couple of months back – and it was business as usual the very next day. The difference is that in downtown Bangkok many customers are mainstream visitors who actually want a real massage and have zero interest in any hanky panky. In the likes of Soi Chaiyapoon it's obvious from the way the ladies dress and their demeanour that massage isn't on their mind.

Even in notorious soi 6 there is officially no action on the premises, nor is there in any of the bars with rooms on Pattaya's darkside – that is the other i.e. in-land side of Sukhumvit Road, an area favoured by some expats. The odd naughty boy has reported getting his end away on soi 6 this week, but bars allowing nonsense on the premises are taking a risk.

When the authorities raid premises they aren't just looking for folks in the act, but for evidence that trysts may have taken place. They are even going through the rubbish looking for used condoms!

Club 4, one of the bars busted last week in Pattaya for allowing customers to take bar employees to private rooms on the premises, has been slapped with a 30-day closure order.

And it's not just bars with rooms on the premises that are getting grief in Sin City. Gogo bars on Soi LK Metro are strictly not allowed to open before 6 PM. The unfortunate effect is that LK Metro has becomes less of a day-time destination and the other bars in the soi i.e. the regular open air beer bars are suffering too as folks go elsewhere for afternoon drinks.

Fun House, on the corner of LK Metro and Soi Buakhao, has been sold and word is it's going to become a wine bar. What a strange location for a wine bar! Soi Buakhao has long been known as a cheap Charlie area and wine bars are supposed to be kind of sophisticated, right? It really doesn't make sense.

6 new girls started last night in popular Soi LK Metro gogo bar, Malibu, and the manager is hopeful more will follow this week. Malibu is one of the bright spots amongst all of the doom and gloom in Pattaya and is worth checking out.

In soi 15 off Walking Street, I am hearing good things about the current lineup at Sapphire. This is not from my eyes but those of friends.

Still in Pattaya, there will be a party this coming Thursday, February 26th, for Paul, the former manager of Misty's who is now on the Secrets technical team. The 80s-themed party will feature a free buffet all night long.





A sign of the times, word is that a small and very secret Nanapong-sanctioned dance contest was held Sunday last week – and those in the know actually stayed tight-lipped about it. Has bar boss paranoia reached a point that such events have become invitation-only, lest word get out and the authorities turn up?

The renewal of bar lease agreements in Nana Plaza may still be 4 months away but it's already a major talking point as foreign bar managers get nervous about what the future may – or may not – hold for them. Bar bosses might be able to absorb a small increase in rent, but the crazy numbers being talked about in key money could be the end of some. For bar managers who have worked in the industry a long time and don't really know a whole lot else, these are very stressful times.

I was enthusiastic about The Den, the newest freelancer venue in downtown Bangkok, located in Suhkumvit soi 12, which I checked out a few days before grand opening. I always think it's fair to give a new bar time to settle down, to work through staffing issues and what not before going back for a look and commenting. Sufficient time has passed so this week I popped by The Den. I stand my initial impressions – the venue is beautifully done out. However, just as with everywhere else, it seems to be struggling and isn't drawing the crowds. The question that has to be asked is whether few customers means few girls or few girls means few customers. There are few of either. The concept is good and the venue itself is great, but the marketing department needs to do much, much better.

Up in Udon bars in the small farang bar area have been raided after they were warned not to stay open after midnight. Some just could not help themselves. Cashiers have been taken away and the owners have had to come and bail them out and pay a fine.






What's Up in Pattaya was a bar I never liked. I didn't like the colour scheme – I've never thought white worked in a gogo bar – and some of the service staff could be quite aggressive. But what really got me was that it was kind of hardcore at times, and some of the antics on stage between girls and customers are the sort of thing I find distasteful. The two floors above What's Up have been opened up and the format is now more cabaret than gogo. Access to Imagine used to be via What's Up, but that's been sealed off and now they are two separate bars (although signs say 'Imagine by What's Up Bar). The owners ought to be congratulated for trying something new and I am of the belief that with the right promotion, the classy shows performed in fantastic costumes will have a much wider appeal than the degrading shows performed in some nameless bars on the same soi. It's great to see something new, but at the same time I wonder if this concept would work better in Bangkok. Will the Pattaya crowd appreciate this concept? Time and time again bars have failed because the product didn't fit with the local market. What works in Bangkok may not work in Pattaya, and vice versa. What I find interesting is that the venue has not rated a mention on Pattaya's naughty boy forums – and that just confirms my thinking about its suitability.

I sit on the sidelines and chuckle when folks argue about whether escorts represent good value or not. Escort services are increasingly popular, especially with those who don't really care for the bar environment and those with little time on their hands. And it seems to me it is largely those with little or no money who feel threatened by increasing prices who tend to rant about the perceived value of escorts. If you use or are interested in using escort services in Bangkok, GodsOfThailand offers a VIP package with discounts for the top Bangkok escort agencies. Check out the Bangkok escort VIP package here.

Following on from the story in this column from a couple of months ago about how the Rex Hotel had closed and the uncertainty of whether it was going to be refurbished or torn down, it can now be confirmed that it is the latter. The Rex won't be going the way of the Crown Hotel at Sukhumvit soi 29, another Vietnam era hotel that was given a new lease of life when it was renovated and renamed a few months back. The wreckers knocked down one wing of the Rex earlier this week and by the time this column is published what was once the Rex Hotel will be probably be but a pile of rubble.



What is it with all of these foreign insurance agents offering compulsory health insurance and compulsory business insurance to their fellow foreigners? The number of foreigners soliciting contributions from their fellow foreigners to ensure they stay healthy and that they don't experience any business interruptions is on the rise. I wonder what the brown-uniformed insurance agents make of it.

It's coming up to the busiest time of year for the visa sections of embassies in Thailand meaning the time to process visas can blow out. Songkran isn't far away and neither is the long summer school break – when Thai families tend to travel abroad. So if you are about to apply for a visa for your beloved to visit or move to your homeland, don't be surprised if it takes longer than you thought. And if all of the paperwork looks like one big headache, here are a few visa agent recommendations. For visas for the UK, contact Iain at MyThai-Visa.com. For visas for Australia, the owner of Bridge Migration is a true professional and has helped many who have had difficult and complicated cases. And for visas for New Zealand, JLMigration is the only New Zealand licensed immigration adviser in Bangkok.

The cricket world cup is underway but the matches are not shown on the major cable TV provider. We get excellent rugby coverage in Thailand these days, but no cricket. If you're resident in Thailand, you can hook up a cable TV box which has channels broadcasting the matches. Otherwise, cricket fans can watch matches at bars showing matches likes Crossbar (Sukhumvit soi 23, about 200 metres up past Soi Cowboy). The feed comes via the UK's Sky Sports 2 or South African Super Sport 2 so commentary is in English. Crossbar opens at 11 AM so the matches from Australia are covered – but the first few overs might be missed. The matches played in New Zealand are a problem though as they start at either 5:00 AM or 8:00 AM Thai time, when the Crossbar publican is still in the land of Nod.











Quote of the week comes from reader Brad, "This place is turning into North Korea but with nice weather".

Reader's story of the week comes from the irrepressible Steve Rosse, "First Impressions".

Take a walk down memory lane with video from downtown Bangkok 20 – 30 years ago including some in-gogo bar footage.

A Brit hit over the head with a baseball bat in Phuket requires brain surgery, all over a silly bar bill dispute.

An Aussie traveller tells of his holiday nightmare in Thailand after an ankle injury becomes badly infected.

Tourists are baffled by rules being enforced on Phuket where beach chairs are banned from beaches!

Two French tourists are badly hurt kitesurfing in Pattaya.

Headline of the week just has to be Thailand has an aircraft carrier with no aircraft!

Think twice about selling counterfeit football shirts or other contraband online after two Frenchmen were caught.




Ask Sunbelt Asia Legal

Sunbelt Asia's legal department is here to answer your questions relating to legal issues and the law in Thailand. Send any legal questions you may have to me and I will pass them on to Sunbelt Legal and their response will run in a future column. You can contact Sunbelt's legal department directly for all of your legal needs.



Question 1: I understand the difficulties we foreigners have doing business in Thailand, and that companies are generally held in some way in Thai people's names. My question is, how do large companies establish a presence in Thailand and obviously get around this? For example, McDonald's and Starbucks are surely not sitting under a company structure that is 51% owned by a Thai? How can us foreigners create businesses overseas like those companies then legally own 100% of the subsidiary in Thailand?

Sunbelt Asia Legal Advisers responds: Large foreign corporations like the Yum! Group usually set up a representative office to provide information for prospective franchisees and to liaise between the franchisees and the corporate headquarters overseas. Often they sell exclusive franchise rights to a local company to manage the country, region or even continent.

For smaller companies there are a few options. If you are American you can establish a company under the Thai-Amity treaty which would give you controlling rights. Another alternative is to establish a company that falls under the Board of Industry regulations for special promotion incentives which would allow 100% foreign ownership too. Sunbelt Asia Legal Advisors can discuss the kinds of businesses that are eligible for BOI or how to set up an Amity Treaty Company.





Question 2: I have a savings account with a bank in Thailand that pays interest on the credit balance in the account. In any calendar year the first 20K baht interest is paid gross with no tax deduction. Once 20K baht interest has been paid in a calendar year the bank levies a 15% tax deduction to all interest payments in that calendar year, including the interest payments previously paid gross. I am a foreign resident of Thailand on an ED visa and spent over 360 days in Thailand in the calendar year 2014 (the Thai tax definition of resident is over 180 days in a calendar year). I have no other income sources within Thailand in 2014 and have not brought any 2014 foreign earnings into Thailand, although I did transfer money here in 2014 from earnings made outside Thailand several years ago. I have heard that under certain circumstances the tax deductions by the bank can be reclaimed from the Thai tax authorities. The bank has given me an official tax letter to evidence these deductions to help facilitate this. I believe the money can be reclaimed based on the tax rate for the first 150K baht of taxable income in a calendar year being 0% and the fact that there is also a 30K baht personal allowance. Thus the first 180K baht of Thai earnings in a calendar year are income tax exempt. Can you confirm that the tax can be reclaimed, outline any procedure to do this and indicate any time frame that must be met to successfully reclaim the tax withheld by the bank.

Sunbelt Asia Legal Advisers responds: The Thai government has set in options to encourage people to save money by allowing the first 20,000 baht to be tax free. Anything beyond this amount will incur a withholding tax of 15%. All account owners are eligible to reclaim the tax paid on interest from the Revenue Department, if your level of income is below their taxable limitation. You are required to have a Thai Tax ID number and confirmation of your address in Thai. You need to collect all information on taxes paid by the bank and full information on your earnings. You would then need your tax return with the Revenue Department who will check the data and would send a check to you in the mail if you qualify for a tax refund. There is no time frame on how long it takes to process but be aware that if you file early in January or February it is usually quicker than if you file it at the end of the deadline in March.

Sunbelt Asia has an expert team of accountants who can assist you in filing your tax return should you need assistance.





The passion has gone and today everything in the bar areas feels so perfunctory.


Bangkok's expat bar areas have never felt so bland. Bar owners aren't tuned in to what many punters want and turning the volume up and installing bright neon signs does little for the atmosphere. The industry used to be full of characters on both sides of the bar, guys like Boss Hogg, Mehkong Kurt, Crazy Jack and Johnny The Frog. They were all full of personality and brought colour to the industry. These days it feels like there's something missing, everything is so perfunctory and the passion has gone. Even the nightly scene outside Nana Plaza where a gaggle of ladyboys with garish lipstick and stubble breaking through their makeup, some of whom tower above punters isn't enough to liven things up. The industry has gone stale. What happened to the characters and where did the passion go? The industry is crying out for something to happen, someone to come along with new ideas, a new bar area, a new concept…something!



Your Bangkok commentator,

Stick