Thailand’s economic meltdown in mid 1997 was the catalyst for the Asian Economic Crisis. It would become known in the Land of Smiles as the Tom Yum Goong Crisis. While Covid is unprecedented in modern times, does the Tom Yum Goong Crisis give us clues about some of the fallout we can expect following Covid?
The first thing that comes to mind from 1997 is what happened to the Thai currency. Previously pegged at 25 to the dollar, within 6 months it had crashed to 56 baht. It would settle in the low 40s against the dollar, a level it stayed around – give or take 10% – for the next decade or so.
There is nothing to suggest the baht will crash this time. The baht has been stubborn and has actually gained in strength, to around 30 to the USD. If not for intervention by the Bank of Thailand, it would be even stronger. Few expect the baht to drop.
The weak baht made a country that was already cheap to visit become ridiculously cheap. Foreigners flocked to Thailand in the years following the Tom Yum Goong Crisis with the tourism industry dominated by Westerners, many of whom visited for the first of what would be many visits. Word spread about the cheap paradise.
A falling baht wasn’t lost on locals and before long some businesses in the tourist trade increased prices to match the drop in the baht against the US dollar. In 1997 many 5-star hotel room rates were around 2,500 baht / night – which was around $US100 / night at the time. You could get a decent standard hotel room in many parts of the country for around 500 baht / night. By early 1998 – around 6 months in to the crisis – many upmarket hotels had increased room prices in baht levels, matching them to the dollar. Some 5-star hotel rooms shot up to 4,000 baht / night, while many standard hotels which had been around 500 baht / night – the equivalent of around $20 at that time – went up to 800 baht / night.
It wasn’t lost on ladies of the night that visitors felt rich. Trink columns from the time report that some ladies in the popular King’s Group bars in Patpong started asking for 5,000 baht when the baht breached 50 to the dollar. Previously they would ask 2,000 – 2,500 baht which was around $80 – $100.
There is nothing to suggest there will be any major change in pricing due to Covid, be it hotel rooms, working girls or any of the other many things visitors spend money on.
As long as I have had an association with Thailand I’ve heard Thais complain เศรษฐกิจไม่ดี – or in English, the economy is no good. Back in 1998 you heard this all the time, especially from taxi drivers but also from street vendors and people in business.
Many street food vendors posted small signs in Thai with three letters conspicuous in the Roman alphabet, “IMF”. Food was offered at “IMF pricing” – which meant at a discount. Many Thais blamed – indeed they truly believed – that the economic crisis was the fault of the IMF. I recall that noodle soup was typically 20 baht / bowl back then while a couple of precooked curry-style dishes served on rice was around 15 baht. You could often find noodle soup for 15 baht and a couple of pre-cooked dishes on rice for just 10 baht. Many Thais were struggling financially and cheap food was a big hit.
I have not heard of street vendors discounting like this, but pop-up kitchens have appeared all over with free food for those who need it. Some people have joined queues hours before the food was served and waited in the hot sun for a free meal.
In 1997 and 1998 a lot of people lost their jobs and unemployment in Thailand reached its highest ever level. Consequently, there was an influx of ladies in to the bar industry who had never previously done that sort of work. Many came from work which paid modestly like factories or farming, but more than a few were university-educated. The latter tended to end up in the freelancer venues while the odd lady found their way in to gogo bars (but didn’t usually last very long).
I remember one night some 20+ years ago in the Thermae with a colleague who met a lady he liked. She was a former office manager and had driven to Thermae in her own car which she parked in soi 8 (which was much less developed back then). It’s quite likely she was looking for money to keep up with her car payments. Such stories were common, of ladies working at night so they would not lose their car / condo / house.
I’ve not heard of any influx of ladies in to the foreigner bar scene due to jobs lost from Covid – and it’s very unlikely to happen. Quite simply, there’s no demand for staff in the bars at the moment with almost zero international visitors.
Thai ladies who lose their job and make the difficult decision to sell their body will head for the Thai scene. These days your average Thai has much more money than they did a generation ago and it’s easier for Thai women to deal with Thai men.
Many large construction projects stalled in 1997 and some abandoned structures are in the same unfinished state today 23 years on, icons of the Asian Economic Crisis.
I doubt whether many construction projects will be abandoned this time around. Plenty of projects will be delayed as migrant labour movement becomes a problem but when the borders reopen and migrant labour floods back in, work will resume. But as for projects being abandoned, I doubt it. There’s much more money in Thailand these days.
Speaking of buildings, apartment and condo rents dropped for mid-range and high-end in the late ‘90s as jobs were lost and people moved out of higher priced accommodation in to cheaper properties.
I signed a one-year contract for a condo in early 1998 at 12,000 baht / month which was below market rate. Construction of the block was complete several months earlier, just before the Asian Economic Crisis started. Occupancy was low and I was the first person to stay in that particular unit. When the contract came up for renewal I negotiated the rate down to 10,000 baht, a level it stayed at until I moved 4 years later.
Today, expat friends in Bangkok whose lease is up have found the property’s owner willing to negotiate. Reports on the forums show some have negotiated a new rate at a significant discount. Now would be a good time to renegotiate your rent. If you plan on staying long-term and like the building you’re in, consider signing a long-term contract and locking in the rate for 2 or 3 years.
Part of the reason for condo rents dropping in the late ‘90s was the departure from Thailand of many expats. Many firms closed. Expats lost their jobs and many left the country. In the years following, expat salaries were less generous and there were fewer expats with full expat packages. The Asian Economic Crisis marked the beginning of the end of generous expat packages which included a large house or downtown condo, international schooling for the kids, and a car & driver.
Business was booming in Thailand in the years leading up to 1997 and many people told me that it didn’t matter what line of work you were in, there was easy money to be made. One friend did computer networking / troubleshooting, charged a 10,000 baht day rate – and had more work than he could handle. 10,000 baht / day was really good money in Thailand back then. By mid-1998, he struggled to charge 1,000 baht for a job as many firms closed up and those that remained had cut expenses to the bone.
Whether expats will see salary reductions is hard to say and depends on the company, the industry and their individual contract. But for sure, a lot of Thais have had their salary slashed. Many have had little choice but to agree to a reduced salary, in some cases 50% or more. Whether those who agreed to a reduced salary see it revert back to what it was post-Covid remains to be seen.
In 1998, the expat community in Bangkok was much smaller than it was today. Expats who had been in Thailand for a while told me that as the economy boomed in the ‘90s and it was easy to make good money, attitudes towards expats deteriorated. Several months of economic pain put paid to that as Thais realised they could benefit from expats and it would be best to be nice to them.
These days I know that some people feel the attitude of Thais towards foreigners has deteriorated. I don’t necessarily buy this comment, at least away from tourist areas. My feeling is that Thais have a neutral attitude towards foreigners these days – if you’re friendly and polite, they’ll reciprocate.
Will there be a change in attitude towards foreigners due to the Covid pandemic? In the tourism industry there might be, but for expats who don’t hang around the tourist areas I am not sure there will be much change.
How much of what happened following the economic crash in 1997 will be repeated, only time will tell. But perhaps this gives an insight in to what might happen and a few clues in to opportunities which might arrive. For some of these there will only be a small window to take advantage of.
Last week’s photo was taken on Soi Nana, in what used to be the Rajah Hotel parking lot, opposite the Nana City Hotel. This week’s photo is of a popular spot known to many readers which is currently undergoing renovations. It probably didn’t look quite like this when you were last there…..so where is it?
Stick’s Inbox – the best emails from the past week.
Woke culture in Thailand.
Woke culture is destroying the West. I hope it doesn’t get a foothold in Thailand. I have come across two young Thais, both western-educated and from very privileged backgrounds, who had absorbed, and had absolutely no problem spouting views about ‘white privilege’. I’m sure they were just repeating the ‘critical race theory’ lines they’d learned from some feminist professor. Both completely failed to identify their own ‘privilege’ in Thailand or give any indication of wanting equality there. Most western countries run rings around Thailand in terms of social mobility, but that didn’t seem to be a problem. It’s a shame, they were both bright but woke culture had essentially brainwashed them.
The refreshing, non-PC honesty found in Thailand.
Forthright talk in Thailand is refreshing compared to the politically correct nonsense in the West. I remember once in Pattaya, I had arrived after a long, delayed flight and I was exhausted but I hit the bars anyway. More than one girl looked at me in distress and said, “Why do you look like shit?”
Bangkok reverts to a normal city.
Without tourists, Bangkok is becoming a normal city i.e. it makes a living from its own inhabitants. Nothing unusual about that for 90% of cities around the world. Thankfully, it is largely able to do so with the victims of Covid mostly limited to those who relied on tourists. I wonder if it is now more like the old Bangkok of the 1960s and 1970s? More grown-up, of course, but essentially a Thai city once again. Another oddity is how well some high-end venues are doing without tourists. I know some resorts are full and booked up for months! I recently joined a motorcycle club and most weekends we ride to cafes and restaurants an hour or two outside Bangkok – and they are jam-packed with Thais buying expensive cakes and high-society family brunches. For those businesses that accept we are living in a “normal city”, money is being made. In Bangkok, this is a poor man’s pandemic only.
A spectator rather than a participant.
I spent some time in Pattaya this week. I saw more farangs than your column contributor saw including a group of regulars who walk Beach Road early morning, and another group who plant themselves in the few remaining beer bars on Beach Road by midday. What I do see with each subsequent visit, however, are more boarded-up shops and more folks living rough. Most any alcove has folks lined up like sardines in a can (not meant to be disrespectful, just choosing an appropriate description) just after dusk, waiting out the night. Contrary to what I might have anticipated, I have not noticed any increase in petty crime and I do not feel unsafe walking around at night anywhere in the city. It’s quite bleak, but still surprisingly safe, which almost makes one feel like a spectator rather than a participant.
Pattaya this holiday weekend.
I’m in Pattaya now for the long weekend. I guess the bar industry is hurting but my hotel on Beach Road is packed with Thai families. The beach is pristine with hardly a farang in sight. A very wholesome environment and it hit me that this is precisely what the government wants Pattaya – if not all of Thailand – to look like; exactly how it looks this weekend. Families everywhere, kids screaming on banana boats….it looks pretty good! There is a nice street food festival and Thai families enjoying a beautiful evening on the beach. The days of the leathery-skinned, tatted up fat farang in Speedos walking along Beach Road with a tatted up hooker are over. Restaurants are humming and there is moderate traffic on Beach Road. I have never seen the water so clear in 18 years! Thailand is far from dead. The transition is in progress. Parts of Pattaya are alive this weekend.
Confident of visiting in July.
This week I bit the bullet and booked our next trip to Thailand for July of next year. The 2 main catalysts were the vaccine news and cheap flights (£385 from UK). I would love to know if the vaccine news has prompted others to do the same. It is of course premature, the borders are still all but closed and the word is many airlines advertise these flights knowing full well they’ll not take place. They use them as a way of drawing in revenue to stay afloat. Despite this, I am positive. Rapid Covid tests are already here and look set to play a vital role in aviation. I envisage the queue for your Covid test becoming another pre-entry chore alongside Immigration – perhaps they will even be combined. The Thai economy can’t withstand another year without international tourists and the pressure will force the government to open the country up. We all need something to work towards and I’ve now got that for the first time in 10 months!
Stickman ahead of the rest!
You were years – decades – ahead of the curve with the black background on your website. It is now a popular option when choosing a background for many sites, including as a Win10 background, for YouTube and for many other sites. It’s said that it is easier on the eyes, especially outside of daylight hours.
Girl Of The Week
Marisa, # 49, Erotica, Nana Plaza
Buxom Marisa is 21 years old, and enjoys drawing
One day, she would like to start her own business
Friendship Bar, the new single-shophouse bar on the main Sukhumvit Road opposite Thermae, isn’t getting rave reviews. Three readers have stopped by, and all three have given it the thumbs down. One reader suggested that the name of the bar and the attitude of staff are a mismatch. Don’t make the mistake of thinking a small pokey bar with a frontage covered in graffiti will be a cheap place to drink. Local beers at 120 baht a bottle isn’t expensive, but there is competition and better deals to be found in many established bars. Lady drinks at 180 baht is taking the piss. What really got up one reader’s nose was toilets without soap (which, quite frankly, should just about be a crime during Covid). The hong-nam is said to be filthy. Needless to say, there’s much room for improvement.
First it was Patpong, then Nana Plaza and now in Soi Cowboy some bars are opening for just a few nights each week. It’s hard to keep up with current opening hours which can change from week to week. If you’re after a good night out with lots of choices of bars to drop by, stick to Thursdays, Fridays and Saturdays.
A bar owner in Soi Cowboy who shall remain nameless has been paying reduced rent over the past few months. The landlord has informed him that this can’t continue and rent will revert back to what it was pre-Covid at the end of the month. Said bar owner has said that if the landlord insists rent must go back to what it was then he will have no choice but to close.
The outside bar at Tilac has closed. Tilac gogo bar proper has been closed since earlier in the year and never reopened after Covid broke out.
Kazy Kozy has closed and the girls who used to dance there can now be found around the corner in Crazy House.
But it’s not all bad news on Soi Cowboy. It can be confirmed that Dollhouse will reopen on December 1st – the date once considered to be the start of the tourist high season. The friendly American manager who is currently stateside hopes to be back in the bar and resume duties some time early in the new year.
Still on Soi Cowboy, Suzie Wong is one bar which is said to be doing ok. I guess that’s what happens when you adapt and try and offer fair value. Suzie Wong has a deal where a beer for a customer and a lady drink is 220 baht. Good stuff, Suzie Wong, perhaps other bars which are struggling could follow your example.
In two popular Soi Cowboy gogo bars under the same ownership, salaries have been done away with and dancers are now on a day rate of 400 baht. To earn the full 400 baht they must get 2 lady drinks. Fail to achieve that and their salary is cut by 100 baht per drink not achieved. Two drinks mightn’t sound like many but it is proving a challenge. In these trying times plenty of ladies opt to stay home and try their luck on Tinder. If these two bars were ships, they’d be sailing in treacherous waters with no warning system to let them know of the rocks ahead. And when the ships crash against the rocks, the sailors who fell in to the water would have to deal with human-eating ocean-dwellers with sharp teeth.
A Thai-owned and run gogo bar in Nana Plaza which for a time pre-Covid was paying dancers a 1,000 baht day rate has also dropped its day rate to 400 baht. At 1,000 baht per day plus drink commissions and tips, some of the ladies made enough money that they would seldom go with customers. One wonders if the reduced day rate has them a little more amenable to liaisons outside the bar?
In Nana Plaza, more bars have joined the likes of Billboard and Butterflies and will open for just a few days each week. Amongst them is Angelwitch which currently opens just 4 days a week – Wednesday through to Saturday.
Erotica in Nana Plaza was closed this past Monday and will be closed Monday tomorrow also. This is not a permanent thing and will be reviewed on a week by week basis. Erotica starts a new happy hour this week every day with all house drinks and local beers just 110 baht from 6:30 – 8:00 PM. Tiger bottles on Thursday, Friday and Saturday nights are 150 baht all night. Tiger draft is 90 for a half pint and 249 for a 1.5 litre pitcher.
I understand that DC 10 in Nana Plaza has closed.
Over in Patpong, some girls from Bada Bing have moved to Glamour where they say they earn more in lady drink commissions.
One wonders whether bars which continue to open every night of the week have seen an uptick in trade on those nights when other bars are closed. My guess is that most likely they have not. Expats tend to gravitate towards certain bars they like / feel comfortable in. If, for example, an expat frequents Butterflies and Billboard but on a night when they are out and about these two bars are closed, that doesn’t necessarily mean he will head to, say, the Rainbow bars instead. Speaking for myself and a few expat friends, there are some gogo bars we haven’t stepped inside in several years because they’re just not to our taste (it could be anything from music, style, atmosphere etc.) Each bar area has a couple of dozen or more bars – but that doesn’t mean that you would like them all.
Daniel Thaiger is to join the ever-growing list of hospitality venues on Sukhumvit soi 11 which have closed. Hopefully most of these closures aren’t permanent and these venues resume at some point in the future.
Over many years, Sunrise Tacos has become known as the go-to place in Bangkok for great turkey. And best of all, turkey at Sunrise Tacos is much cheaper than buying direct from supermarkets. Why pay 4,720 baht for a 16 lb (7.27 kg) frozen turkey in the supermarket when it costs just 2,380 baht from Sunrise? A cooked turkey will set you back 6,000 baht at Villa for a 16 – 18 lb bird. It’s just 3,773 baht at Sunrise. And the same goes for their whole pies. Check out: https://www.sunrisetacos.com/turkey/ Call: 0650950597 or order online, or send a message on Messenger.
For something a little different – and a little bit special – why not check out the roof-top bar at Thailand’s tallest building, Mahanakhon? It’s currently free entry on Fridays and Saturdays – it normally costs 800 baht. Cocktails are reasonably priced given the setting and there are various promotions.
You can get a tourist visa to visit Thailand and you can visit the country. The list of requirements is lengthy, but the financial requirement of 500,000 baht has been removed. I imagine that if you were in the States or Western Europe where Covid is raging out of control, Thailand must be tempting. For those of us in New Zealand and Australia it’s not quite so easy. Aussies have to apply to their lords for permission to leave
prison the country while both Aussies and Kiwis face a mandatory 14 days quarantine on return – for which we must pay $3,000 towards the cost. I don’t anticipate that the loosening up of tourist visa rules will see the floodgates open – and businesses on the ground in Thailand will hardly notice the few people who do make it in – but for those who are desperate to get to Thailand, the good news is that it is possible. Just remember that you still have to do 14 days quarantine on arrival – and I don’t see that changing any time soon.
This Week’s News-Feed / Thailand-Related News Articles
Quote of the week comes from a friend, “I used to bemoan Bangkok Airways’ high prices for flights to Samui, but now I view it as a paradise tax that keeps out the riffraff.”
Reader’s story of the week comes from Tony-UK, “A Clever Tom Cat Meets A Cleverer Kitten“.
You may now be charged for luggage when you take a Bangkok taxi.
A fool is arrested at Phuket Airport after saying something you absolutely should not say at an airport.
Protests in Bangkok this week saw flare-ups with the authorities and some people injured.
Some Brits married to Thais in Pattaya are having trouble extending their yearly visa and are being coerced to pay their wives to help with the paperwork!
An interesting piece in the Bangkok Post this week about vaccines and whether they will end the economic slump had some worrying details about how vaccines don’t travel well.
When Phil met Larry Part 1 is a fun conversation between two well-known Pattaya bar bosses.
Two weeks ago I wrote how I thought the bar industry might look post-Covid. I stand by the premise that when the pandemic is over the bar industry will spring back to life as the world makes up for lost time, people race to jump on a plane and there is a stampede for flights to Bangkok. But I have to say that it looks like there might be a real lull in trade between now and then. More and more bars are opening for just a few days a week. More bars are closing – some permanently, some for good, and I suspect some which plan to open again may not. I maintain that the bar industry will survive Covid, but there’s a lot of pain to be felt before then.
Your Bangkok commentator,
Stick can be contacted at : [email protected]