Survival Strategies
Bars are hurting as a decent opening night is invariably followed by trade quickly falling away to the terrible levels it was in mid-March before all bars were ordered closed. With tourists unable to visit Thailand, the customer base is limited to working expats, retirees and the visa amnesty crowd. Something has to give.
I have tried to maintain a positive tone but the truth is that in the Bangkok bar industry, a few big-name bars aside, things are dire. Some bars might not even make it to the end of this month.
There are really only two strategies to survive – generate more income or reduce expenses.
Increase Prices
Just as bars have less money coming in, so too do many expats. Some are on a reduced salary, others have lost their job and are out of work altogether. Retirees forever complain about the strong baht and one imagines many of the visa amnesty crowd are broke.
When times are tough, the much-maligned approach of Thai business owners is to increase prices. When visitor numbers were increasing year after year, bars put prices up and up until they reached levels that had some regulars up in arms. The days of bars putting up prices as and when they pleased are over.
Reduce Prices
Would reducing prices attract more customers / cause punters to spend more? Some might spend more but it’s debatable if it will attract more customers – there is a very limited customer base at present.
It is said that businesses in Thailand never drop prices but that isn’t true. Bars are dropping their prices. From Soi Cowboy, Suzie Wong and Shark have dropped prices, and rumours came in not long before this column went online Tilac and even Baccara slashed prices this week.
In Pattaya there is a price war with some bars offering 44 baht drinks. Desperate times call for desperate measures.
At the very least, bars which don’t have a happy hour should consider introducing one when the bar is quiet. Ditto, bars which don’t have a reasonably priced draft beer option should consider offering that too. Reducing prices doesn’t necessarily mean putting prices down, but offering a budget option which may not previously have been on the menu.
Temporary Rent Reduction
Rent and salaries are the two big expenses for bars. For some bars, rent can run to hundreds of thousands of baht per month, and in a few cases, it’s over a million. Paying less rent might be the difference between a bar being viable, or not.
It probably makes sense for landlords to offer a rent reduction. The property will continue to generate them an income and the business can continue to trade. And when visitors return and trade improves, landlords can put the rent back up to what it was. In some cases not working with the bar operator to lower rent will see the bar walking away – and the landlord may not be able to find a new tenant for some time.
The question is will reduced rent be enough to save some bars?
On a related note, I cannot shake the idea that high rents are the biggest problem facing the industry. In downtown Bangkok, commercial rents are ridiculously high. In the suburbs, commercial rents are ridiculously low. If entire bar areas could be transplanted in to the suburbs they would be viable. Unfortunately, gogo bar licencing rules mean this is simply not possible.
Salary Reduction
Along with rent, the other big expense for bar operators is salaries. Some bars have halved the salaries of some staff, and some bars have even eliminated girls’ salaries altogether. Effectively, some staff only earn what they can get from lady drink and barfine commissions. This is happening in some smaller, Thai-owned venues.
Staff Reduction
Some bars have drastically reduced the number of staff to lower their salary bill. It is an effective strategy to lower expenses, but it also kills the atmosphere in the bar.
Reduced Opening Hours
With fewer customers about (many regulars are locals who work full-time jobs Monday to Friday), does it make sense for bars to open every night? How about they open just Friday and Saturday? Or maybe Thursday through to Sunday?
Opening just a few nights a week would reduce salaries and electricity costs. Whether the savings would be all that significant, I don’t know.
On this note, beer bars in particular are very quiet during the week before the sun goes down. This was to be expected – by day, Bangkok beer bars are the domain of those on holiday. If I was a beer bar owner I’d consider not opening until around 5:00 PM.
The Best Option?
Plenty of bars have reduced salaries, and some have put the onus on the girls to make money from commissions. This is helpful to the business but it will no doubt force some staff to seek work elsewhere.
Increasing prices won’t fly unless the bar is really special. Even the best bars like Billboard and Butterflies might find a backlash if they tried to increase prices at this time.
Introducing happy hours when it is quiet might help, but I am not sure that it will be that significant in terms of the big picture.
I really believe the way for bars to survive is to renegotiate their rental agreement with their landlord. A large percentage drop of say 50% would be a great help, but what about negotiating some sort of deal whereby the bar pays a percentage of their total take to the landlord of, say, 15% – 20%? That would give bars a fighting chance to survive.
Mystery Photo
Last week’s photo was taken at the south-east corner of the Democracy Monument roundabout, looking in to Sorndaeng, a long-running Thai restaurant popular with the establishment. Only two readers got it right. Another tricky one this week for those of you who complained that the mystery photo had become too easy. This week’s photo was kindly provided by Mr. Blue Skies and the one and only clue is that it’s not some obscure far-flung corner of Bangkok. It is in the zone, so to speak.
Cashless in Thailand, not coming any time soon.
I’m very reluctant to use my card in Thailand due to the bad foreign exchange rates my bank uses for each transaction. The bank adds a flat fee and a percentage. If Thailand adds a bit as well it really stacks up. Paying your hotel bill like this is bad enough but if expected to pay for your beer tab or for items purchased at 7 Eleven it would be prohibitive on small transactions. This would complicate tipping and the giving you change in coins (that hopefully you won’t want) practice so many establishments use. For this reason I see a reluctance in Thailand to embrace cashless transactions. Finally, it could be an issue when your bill comes and the Mrs. sees on your monthly bill a transaction for $120 at Titty Twister.
When will you be welcome?
This sentence in your July 5 column sums up the problem, “All it took was one randy Aussie to have put a possible travel bubble back by months.“ Given that it takes very few people, in this case one, to screw things up, I‘ve become quite pessimistic. In May when I made airline reservations for Asia from California and at that time the virus trajectories looked pretty good. Now, not so good. I‘ve mentally given up on traveling to Asia in November / December.
Pricing pushing punters away.
Regarding drink prices, I‘m willing to pay quite a lot for a cocktail, 400+baht. But it‘s going to be at the very top of the cocktail bar strata and something I can‘t come close to recreating at home. And I’m not a heavy drinker, more a quality over quantity guy. Outside of that , I‘ll go to Sam‘s 2000 at happy hour (thanks for the tip ages ago) on my rare visits to Soi Cowboy or I‘ll find a pub with a decent happy hour. I‘ll definitely check out The Red Lion and I hope it does spark a price war. I‘m so over the outrageous lady drink / barfine / gogo bar prices that I‘m hardly a participant in that segment of Bangkok nightlife anymore. There are other, better, ways to find someone for fun.
Postcard from Sukhumvit.
Things are looking stark for tourism around Sukhumvit. A lot of hotels around Sukhumvit are completely closed or just have one or two floors open. There are a lot of closed down massage shops with for rent signs. Everything is dead in Sukhumvit soi 11, with the Old German Beerhouse being one of few places still open. Even The Australian Bar is closed. Things looked more lively on soi 13. The new Red Lion was full early evening with expats, but was empty at 11 PM. We tried the food in The Red Lion and it was good and very reasonably priced. Incredibly cheap drinks and a good selection. It looks like it will be popular with the expat community.
The cost of keeping Covid-19 out.
The latest incident regarding the Egyptian Air Force officer infected with Covid-19 strolling around Rayong has generated a massive knee jerk reaction. Over 60% of Thais favour keeping foreign visitors out. Although tourism accounts for 15% of the GDP, 85% of the economy is not tourism. At least not directly. Anybody reckoning on a turnaround in policy allowing tourists into Thailand in the next high season is delusional. The outcry would be immense. In Thailand, we have been constantly fed a stream of “how successful Thailand has been and we must not let out guard down”. That foreign virus will simply not be allowed in Thailand. Not one single case. If the cost of keeping Covid-19 out is 15% of the economy, then so be it. I’ve mentally resigned myself to being stuck in Thailand for the next 18 months.
Beware the assassin!
Bar customers are currently limited to retirees, expat workers and the visa amnesty crowd so the near term future for most bars looks pretty bad. Billboard and Butterflies are likely to suck all the air out of the room, so any bar owner who doesn’t have deep pockets is going to have to consider shutting down……forever. The market simply cannot handle so many bars with so few punters. Billboard / Butterflies are to other bars what Amazon is to small retailers and mall shops, an assassin.
What can the girls do?
I made some rounds for research purposes. Soi Cowboy is pretty dead, save for Baccara and Crazy House, and Country Road might be at least covering costs. The women in other venues, who may have known the customer base was going to be small, are now seeing it for real. Reality is shocking them. Many barely got through the 4 months of closure, and now they realize things aren’t going back to normal anytime soon. Frankly I don’t know what they will do, as the overall Bangkok job market is flush with applicants and bereft of jobs. Chat with any woman and you can feel their stress. They’re worried, and rightfully so. One has to feel for them. Even if they wanted to leave the industry, there isn’t any place to go.
The beauties of Billboard, from the archives.
Billboard on the top floor of Nana Plaza reopened this past week. The owners made the most of the downtime and installed new floors & new mirrors in the bar and also redid the bathrooms which have been described as the best in the plaza. The bar resumed where it left off with a great lineup of dancers. Billboard was very busy early on opening night and it was hard to find an empty seat.
Billboard’s sister bar Butterflies also reopened this past Wednesday. Those who stopped by tell me business was good. First impressions were that Billboard was the pick of the two.
There’s a new bar at the top of the stairs on the left in Nana Plaza, next to Straps. It’s unclear if it’s a girly bar, a ladyboy bar or a bar with both girls and ladyboys. It isn’t helped by the bar’s name, Random, which doesn’t strike me as a great name for a bar.
The better bars in Nana Plaza did ok this week while the less popular bars were quiet. Out on the soi, business was described as bleak. Mid-week trade was lousy in the beer bars which should be no surprise given expats with jobs may have to get up early for work the next day. Some beer bars were said to be particularly quiet. The manager of one well-known Soi Nana beer bar commented that opening early in the week doesn’t seem to be working. The idea of limiting opening hours to just a few days a week shouldn’t be dismissed.
Some of the beer bars run by Thais have a lot more staff than beer bars operated by foreigners. What’s that all about? Some Thai-owned beer bars are not paying the girls a salary. Instead, they allow these girls who are what you would technically call former employees of the bar to work from the bar for lady drink and barfine commissions. I would have thought that would be in breach of labour laws, but what would I know? (Note to farang bar owners, I wouldn’t try this!)
But will that approach work given how deathly quiet some bars are? In a report from one of the smaller Nana Plaza bars (and let’s be clear, Nana Plaza is doing better than elsewhere), one girl has told a regular that she not been barfined since the bars reopened. Not once. Some nights she doesn’t get so much as one lady drink. We know some bar maidens can be a little economical with the truth, but for sure many arehurting.
Rainbow 5 had over 100 girls in the bar when it opened on July 1st, and it was the same story at Twister BKK. When I heard these numbers I was surprised, but the source was reliable so I didn’t question it. Now both Rainbow 5 and Twister BKK are quiet and dancer numbers are much lower. What’s that all about? It turns out that these two bars had benefited by borrowing girls from a couple of other bars which had yet to reopen. Now that those other bars have reopened, dancer numbers in Rainbow 5 and Twister BKK are down.
The Nana Hotel – known to some as The Mothership – plans to reopen on August 15th. Outside the Nana Hotel, Hooters – like most of the bars lining Soi Nana – isn’t doing well. Hooters currently opens at 4:00 PM, and not before lunch-time as it did pre-Covid-19.
Apparently some bars in Soi Cowboy have got together and dropped prices. I only heard about this not long before publishing the column and have not had a chance to verify it. I’m told In Tilac it’s 95 baht drinks all night and it’s 90 baht drinks all night at Suzie Wong. Rumour has it that even in Baccara it’s 90 baht beers all night too. Perhaps someone commenting on drinks prices got bars’ attention?
Cops are once again stationed at the Asoke end of Cowboy with a small desk and a couple of officers present this week.
There are plenty of face shields being worn by staff on Soi Cowboy but many are wearing them rested on their head like a welder does when he eats his lunch.
A reader was walking along Patpong 2, bemoaning the loss of Cosmos when he noticed a busy little enclave at the ramshackle street bar just past Paddy Fields. About a dozen ladies were present, perhaps half of whom he recognised from Cosmos. And there in the middle of them all was Vinai, the long-time operator of Cosmos. Could this be Vinai’s new gig?
There’s not a lot of news from Patpong this week. The bar I used to enjoy, The Strip, on soi 2, hasn’t reopened, nor has Safari or any of the big-name gogo bars on soi 1. In fact, on Patpong soi 1 it’s just Super Star that is open (see photo at the end of the column for just how quiet Super Star is).
44 baht beers in Pattaya….and in some bars that price is all night long. Photo supplied by a reader.
Drinks prices are being slashed in some Pattaya bars which are willing to make just 3 baht profit on a bottle of beer. 44 baht is a great deal, especially as this is not some out of the way beer bar that no-one wants to visit, but right on Soi LK Metro. This is getting crazy, especially when you consider this is not happy hour price in some bars – but all night long! Perhaps the idea is to sell at what is basically cost price to get punters in the door in the hope they will buy other drinks, lady drinks, pay a barfine etc.
On Soi LK Metro, Crystal Club’s opening was a huge success – even busier than Christmas Eve or New Year’s. In fact it was so busy they had to turn customers away. Things have settled down to what could best be described as an average low season – which means plenty of drinks are being sold, but not so many ladies are being barfined.
Elsewhere in Pattaya it sounds like a similar story with big-name bars reporting that opening night gets the punters in the door and maybe even fills the bar, but water quickly finds its level and it within a day or two it’s down to lousy low season levels.
There is talk that some ladies who moved back to the family home in the countryside when the bars closed in March returned to Pattaya earlier this month only to discover that it was every bit as quiet in Sin City as it was in their village. With little chance of making money, some were back on the bus a few days later to return to their village.
All of which means there are zero problems for Pattaya bar owners looking for staff with girls turning up in droves. Soi LK Metro bar operators report girls who used to dance in Walking Street bars are looking for a new bar to work in. Some bars have a problem they haven’t had in 15 years – sexy girls are keen to work but there are no jobs to offer them!
Thais enjoying Khao San Road sans farang.
Khao San Road is not that popular with Stickman readers but I have to admit that I quite enjoy stopping by for a visit when I am in town, for a change of scenery as much as anything. A friend who also enjoys wandering through Khao San Road tells me there’s a good vibe there these days as young Thais make up the numbers.
There was the mother of all knee-jerk reactions in Thailand this week after news broke that an Egyptian soldier visiting Thailand tested positive for Covid-19. He and his soldier buddies had been exempt from the 14-day quarantine and visited various places in Rayong province, including a shopping mall. When it was discovered that he had tested positive for the dreaded virus, panic followed. Schools in various provinces were ordered closed, shopping malls in Rayong closed for a deep cleaning, Thais cancelled trips to Rayong and there was widespread outrage that an infected foreigner had been allowed in to the country. While there have been no reports of anyone else being infected, the reaction shows how Thais feel about the idea of foreigners returning, and the impression you get is that in the absence of a vaccine, Thailand’s borders are going to remain closed for a long time to come. Don’t get your hopes up of getting back to Thailand for a casual visit any time soon.
I note that Thai Airways has pushed back the timetable on when it plans to resume international flights. They had previously announced that international flights would resume on a limited timetable in August but that has now been pushed back until September. What do you think the chances are that Thai will be in the air again in September? Flights transporting freight, perhaps….but passenger flights?! September is less than 6 weeks away so I don’t think it’s all that likely.
Quote of the week, “Covid-19 spreads as fast as a bargirl’s legs in a short-time hotel.”
Thailand is getting more bad press for ripping off foreign visitors.
Thailand is offering a grace period on the extension of visas.
Thailand’s efforts to keep Covid-19 out of the country are strangling the economy.
New Thailand civil aviation rules require a Covid-19 medical certificate even before buying an international flight ticket.
Anti-government protestors were out on the streets of Bangkok this week.
Thousands of foreigners in Thailand are waiting for an announcement on the visa amnesty.
A popular downtown Bangkok condo complex refuses entry to a European diplomat.
An injured caddy sues an Italian golfer for half a million baht.
Super Star, Patpong soi 1, Friday night this week……dead. Thanks to a reader for the photo.
So many who work in the tourism industry have been without an income – or have had a greatly reduced income – for a few months now. They are desperate for the borders to reopen so foreigners can return to Thailand and they can start making decent money again. At the same time the incident with the Egyptian who tested positive for Covid-19 and who roamed around Rayong has the Thai public determined that borders remain closed and foreigners who may bring the virus to Thailand stay away. Something has to give.
Your Bangkok commentator,
Stick
Stick can be contacted at : contact@stickmanbangkok.com
