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					                         NEWSLETTER No 78 – MARCH 2011
If you are receiving this Newsletter for the first time, but do not wish to receive it in the future please simply reply to the email it came
with and let me know. If you know someone who would like to be added to the Mailing List, please let me know at the same email
address.

Last month I discussed how air travel had made the world that much smaller and the impact it has had on Koh Samui.
There is little doubt in my mind that the creation of Samui Airport by Bangkok Airways was the catalyst for the
development that has taken place here over the last ten years in particular. Without the airport it is inconceivable to me
that the plethora of new villas and hotels would have been built.

Now many people dislike the changes that have occurred and would like to see Koh Samui stay as it was 20 years ago.
Whilst there is an attraction in that, is that really fair to the indigenous people of the island? Development has brought its
problems, that cannot be denied, but it has also brought many benefits and indeed wealth to the islanders. For many
reasons the infrastructure has failed to keep up with the pace of development but that is gradually being addressed. People
quickly forget what it was like that long ago and I can only speak for the last ten years here.
    -     We complain about the electric supply but ten years ago we only had for the most part single phase supply and
          blackouts were far more common than they are now. The second under sea cable and new transformer station in
          Maenam are all part of addressing the present issues.
    -     Broadband internet was unheard of. Slow dial-up connections were all you could get if you could get a telephone
          line at all!
    -     Water was from a well. The desalination plant and city water did not exist.
    -     Many roads were sand and gravel including, not too long previously, Chaweng Beach Road. Access to the hills
          was difficult and only possible by 4-wheel drive. Now most of those hillside tracks are concreted roads.
    -     Supermarkets were poorly stocked and many products out of date and more than once I found bread full of mould
          when I got it home. Now we have a choice of supermarkets and convenience stores by the dozen with fresh
          produce available 24 hours a day.

Some people will continue to argue that all these developments are a bad thing and perhaps they have a point in the way
they have expanded in a seemingly uncontrolled way, but there is also an element of selfishness in that view. Why should
the people of Samui be denied these facilities to retain an idealized vision of what Samui once was – or perhaps never was.
It is the “old hands” that complain. People coming to Samui today for the first time see it as it is. It remains a beautiful
island despite the problems common to any developing vacation destination.

Over the last year hotels have seen reduced occupancy and lower room rates. This is for a multitude of reasons not the
least of which has been the political instability and demonstrations in the country. The worldwide economic slump and
devaluation of most currencies against the Thai Baht have made it more expensive to come to Thailand. As you will see
from reports below, Bangkok Airways are also being cited as part of the problem with the high air fares and lack of
capacity. So Bangkok Airways who were the catalyst for the development of Samui are now being held partly responsible
for declining tourism on the island. Once again there is a clamor for a second airport but that is unrealistic. Who is going to
build it? Not the government to be sure (it is hard enough to get funding for essential infrastructure) and why would a
private operator take the risk?

The economics of supply and demand will no doubt sort much of this out. One major international hotel chain has just
announced it is pulling out of Samui after only a short period here. No reason has been given and whether the decision is
based on economics or other factors is not known, but I doubt they will be last. Others though are still coming!

                             My Driving and Parking Consultant passed another milestone in February and in a quaint Thai
                             custom purchased a certain number of eels (it would be unfair to say how many as there was one
                             for each year) which following a visit to the Wat were then released into a lake to swim away and
                             take all the bad luck with them. Let’s hope it works!




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Follow Ko Samui Properties on these Social Media Sites

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A very busy month has gone by and you can see the results below with many new properties coming onto the market and a
number of price reductions. There is no clear direction to the market at the moment but I do not think prices will go any
lower in the immediate future – except those where the asking price is still at historic levels.

See also in particular the following New Listing – CTRL + click to follow the link:

                      NEW LISTING
                      2 Bed Bungalow in Santithani
                      Available at - Baht 2.75 million



                      NEW LISTING
                      New Condominium Project in Plai Laem
                      Available from Baht 728,000 up to Baht 1,872,000



                      NEW LISTING
                      3 Bed Mountain View Villa with pool in Ban Tai–
                      Available at Baht 5.5 million




                      NEW LISTING
                      Residential Investment south of Lamai
                      Available at Baht 18 million




                      NEW LISTING
                      One Bed Bungalow close to beach in Lipa Noi
                      Available at Baht 3.9 million




                      NEW LISTING
                      12 Room Resort in Lamai – Baht 21.8 million
                      Available at Baht 3.9 million




                      NEW LISTING
                      3 Bed house in Bophut
                      Available at Baht 10 million




                                                                                                                Page 2 of 6
                       NEW LISTING
                       2 Bed townhouse in Bophut
                       Available at Baht 4.2 million




                       NEW LISTING
                       1 Bedroom Ocean View Apartment
                       Available at Baht 6.29 million




                       PRICE REDUCTION
                       3 Bedroom ocean view villa in Baan Tai - Baht 10.8 million
                       New Price - Baht 8 million



                       PRICE REDUCTION
                       2-3 Bedroom Sea View Villa with Pool in Chaweng Noi - Baht 15.3 million
                       New Price – Baht 14.2 million



                       PRICE REDUCTION
                       Two 1 Bed Apartments in Chaweng – Baht 2.84 million
                       Now available at Baht 2.3 million each or Baht 4.4 for both.




                         For Festivals around Thailand visit the Tourist Authority of Thailand website.




Samui Express is on line and you can find them here
And you can find The Samui Gazette here - http://theSamuigazette.com/

Airport capacity hits Samui hotel businesses                                        The Nation          7 February 2011
The hotel business in Samui is facing tough times due to inadequate airport capacity and overdevelopment, according to C9
Hotelworks, "Hotels have been added to the island over the past four years, but the boom has undermined supply-demand
fundamentals and strongly impacted last year's operating performance," managing director Bill Barnett said last week.
According to its latest report, "2010 Samui Hotel Market Update", warning signs clearly point out that the lack of clarity over airport
expansion or relocation plans remains the critical unanswered question.
Private sector development has surged ahead of needed transportation infrastructure improvements, which has propelled the market
into a tailspin. A compelling situation has emerged where the island sits within an international flight corridor that requires low-level
landings. Environmental controls in turn have resulted in a restrictive ceiling of 36 flights a day.
Compounding the problem is a limited runway length, which inhibits larger aircraft from using the airport.
"Private operators and hotels say the biggest problem in Samui is airport capacity, which is controlled by a private company," he
said.
Many Hong Kong tourists |want to come to Samui but they cannot get flights, while the cost |of air transport to the southern island is
too expensive even for Thais.
The hotel business in other destinations like Phuket had dropped during the political crisis last year, but they returned fast as many
airlines could put up flights on local international routes as well as charters.


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Samui's international arrivals were neutralised by diminishing European tourists and a drop in the volume of historically strong
repeat guests in the year past.
The decline was registered in occupancy by 7 per cent, average room rates by 15 per cent and revenue per available room or
RevPAR by 26 per cent compared to 2009.
Forward-trading prospects are bolstered with the island earning high marks for a fresh supply of stylish, branded products in the
luxury and upscale tiers.
In the short term, there is an inherent risk of being lost in transition over the next few years.
This uncertainty is highlighted by the ability of the market to absorb 801 rooms scheduled to enter the supply side by next year, or 5-
per-cent growth over the 14,401 rooms at end of last year.
Brands that have newly opened or will soon enter the resort island are W of Starwood, Conrad, Dusit, Banyan Tree and Movenpick,
he added.

Koh Samui Airlift Hits Hotel Performance                                   The Phuket Insider                       10 February 2011
Koh Samui's four-year hotel building boom is threatening to undermine the long-term success of the destination as supply outstrips
an arrivals demand hamstrung by severely limited airlift, according to Samui Hotel Market Update 2010, released today by C9
Hotelworks.
The report (download the full report here) reveals that oversupply heavily impacted last year's operating performance and if there
was no airport expansion or relocation plans that would improve access to the island, the long-term potential of Koh Samui would be
effectively capped.
Koh Samui, Thailand's second-largest island, 700 kilometres south of Bangkok, is located in an international flight corridor requiring
low landing levels. Coupled with environmental restrictions allowing only 36 flights a day at the existing airport and a runway length
unable to handle larger aircraft, it has created a situation that is strangling the popular southern Thailand destination.
The simple problem is that you can't stay there if you can't get there, this is the key restricting growth in Koh Samui. Private sector
development in the hospitality sector has surged well ahead of transportation infrastructure improvements which has caused the
market to go into a tailspin.
According to report data, gains during 2010 in international arrivals were neutralised by diminishing European tourists and a drop in
the volume of historically strong repeat guests. Marked declines were registered in occupancy by 7%, average room rates by 15%
and RevPAR by 26% compared to 2009.
However, forward trading prospects were greatly bolstered by the high quality of much of the new supply with a number of stylish
branded products entering the market in the luxury and upscale tiers.
Short-term there is an inherent risk of being lost in transition over the next few years. This uncertainty is highlighted by the ability of
the market to absorb 801 new rooms scheduled to enter the supply side by 2012, presenting a growth of 5% over the existing 14,401
rooms at the end of 2010.
Speaking to resort owners and hotel managers during the market research process comments to C9 centered on the airlift
conundrum topic. Comparing the emerging destination to the more developed markets of Phuket and Bali, what was clearly missing
in Koh Samui was regional low cost carrier and charter flights.
As new markets are emerging low cost carriers and charter flights are high demand generators. An example of competing regional
destinations is the new international airport in the emerging tourist island of Lombok in Indonesia near to Bali, which looks set to
leapfrog growth with its ability to land Boeing 747 and Airbus wide body aircraft.
Koh Samui's journey from an idyllic Robinson Crusoe-like paradise to a mainstream market has hit the halfway marker.
Expectations for 2011 look to focus on the coming of age debate and whether increasing international brands can induce sustainable
demand.

Softened stand on oil drilling?                                                     Samui Express                 12 February 2011
Municipality seeks new public hearing before project resumes.
In a somewhat softened stance against the postponed oil drilling and exploration project off the shores of Koh Samui, the municipal
mayor said new public hearing should be conducted before oil companies can resume oil drilling here.
Municipal officials, along with environmental groups and tourism stakeholders last year demanded a stop to oil drilling and
exploration near Koh Samui.
In a highly publicized opposition to the project last year, the mayor led municipality officials, Samui residents and tourism
stakeholders in mounting protests and rallies in an effort to stop the project seen as detrimental to the environment and to tourism,
the economic life blood of the island.
The protests forced the national government to temporarily stop the oil exploration.
Protesters, including those from nearby islands Koh Tao and Koh Phangan, demanded the national government withdraw the permit
it granted to oil companies for offshore drilling here fearing it would destroy the environment and the tourism business here.
“The oil companies have to do public hearing again because the people are unhappy with the first public hearing,” Mayor Ramnate
Jaikwang said.
The first public hearing was criticized for not being transparent as the law requires.
Tanongsak Somwong, leader of one of the protesting groups, said the first public hearing had only about 30 people in attendance,
with almost half of them representatives from the government. Those who represented the private sector, he said, were mostly
businessmen. Nobody represented the fishermen and tourism operators.
The second public hearing did not take place because the attendees staged a walkout.
What followed were protests pressuring the government to abandon the oil exploration project.

                                                                                                                                 Page 4 of 6
In October last year, Department of Mineral Fuels director general Kurujit Nakhonthap said NuCoastol Thailand Co. had postponed
for one year its planned drilling for natural gas off Koh Samui due to a couple of factors including public opposition.
“The first pit would have been done within the year, but the start of work was affected by resistance from the affected residents in the
nearby areas including Koh Samui and Koh Phangan,” the official said.
It also revealed that the oil-exploration company had yet to have its environmental impact assessment (EIA) approved.
NuCoastal operates another petroleum exploration block in the Gulf of Thailand, near Songkhla, which produces 11,700 barrels of
crude oil daily.
Kurujit was quoted in the media saying the government may consider giving the company a year to prepare for the drilling because
local residents and tourism operators are gravely afraid of an oil spill similar to what happened in the Gulf of Mexico last year.
Nu Coastal’s oil exploration license would become invalid if its environmental impact assessment (EIA) fails to get approval from the
Science and Technology Ministry by Dec. 18.
Koh Samui residents have held protests against the government's decision to award the London-based affiliate of Houston, Texas-
based Coastal Energy a license to operate 42 kilometer off the southern tourist island.
Kurujit was quoted earlier saying authorities and the company would work harder to provide accurate information on safety and
environmental protection and explain the strict laws on petroleum exploration and production.
"It comes as no surprise that people living near the petroleum block would be scared, as they think the drilling platform might explode
like the accident in the Gulf of Mexico, so we need time to provide correct information," he was quoted saying.
The government has warned that Thailand had oil and gas reserves for use only for the next 11-12 years.
"If no new oil and gas resources are discovered, the country may have to rely on [more] imports of liquefied natural gas," Energy
Minister Wannarat Channukul told the media last year.

New Samui ‘walking street’ up                                                    Samui Express                  12 February 2011
A new “walking street” made its debut recently in Maenam, adding to the number of walking streets now existing on the island, such
as those in Bophut and Nathon.
A walking street, as far as Samui is concerned, is a weekly food and merchandise fair on a road stretch complete with entertainment
and other cultural spectacle. The weekly event has become popular places among tourists and residents alike to meet up with
friends and to hunt for bargains.
Food tasting is by far the most popular activity in these walking streets as many vendors allow free taste of the food and fruits they
sell. Other products available in these weekly flea markets are clothes, footwear, watches, lamps, household items, knickknacks,
among many other things.
These markets usually open from late afternoon into the night. The Maenam walking street is up on Thursdays. During this time, the
streets are closed to traffic and the surrounding shops, bars and restaurants are also open for a sit down snack and drink.

More public works projects lined up                                               Samui Express                 12 February 2011
To boost Samui’s attractiveness as tourism and investment destination, the municipal government has lined up more infrastructure
projects this year, including the rebuilding of the ring road complete with walkways and extensive drainage systems.
Samui Mayor Ramnate Jaikwang said some of these projects had already started while the rest were in the process of getting
contractors.
He revealed that funding for a 40-kilometer road project from Krut to Nathon is already available. This project, scheduled to start this
year, will involve installation of big drainage canals measuring 1.2 meters in diameter and covering the road with asphalt. It also
involves thickening the whole ring road pavement by putting on top of the old pavement another five centimeters of asphalt.
A similar project will be undertaken soon between Nathon and Bophut. Funding for this road program has already been approved.
“We are just in the process of selecting the contractor to undertake the project,” he said.
A new road project extending from the temple to Chaweng is also underway, according to him while the asphalting of the road from
Chaweng Lake to the police station in Bophut and the repair of Chaweng Beach Road will also start soon.
The Soi Reggae road will also undergo repair and street lights will be installed there, the mayor added.
The improvement of the Bon Kai road that started from Bandon Hospital up to the junction by the 7/11 going to Ghost road that was
recently finished will be extended up to Samui airport.
The municipality also plans to build three treatment plants for water going to Chaweng Lake. The project, he said, intends to keep
wastewater from going into the sea.
Ramnate said probably by the end of the year the municipality will initiate more projects for road, drainage, and walkways.
The mayor said all infrastructure projects are expected to be finished by 2012.
“Maybe by 2012 everything is finished,” Ramnate said.

Big Chaweng wave snatches woman from the shore                           Samui Express                 12 February 2011
A big wave snatched a 26-year-old woman sitting on Chaweng beach with friends shortly after noon on Jan. 31, pulling her into the
sea where she drowned to death.
Rescuers found the body of Miss Sukanya Daungnil, of Muang District, Buriram province, half an hour later floating 30 meters away
from the shore.
Miss Apatsara Phujomjit, 18, a friend of the victim, told police that Sukanya was just visiting them. As she and four other friends
working in a Chaweng hotel were off from work, they decided to gather and sit on a scenic side of the beach to chat and relax.
Suddenly, Apatsara said, a big wave about 2-3 meters tall rolled into the shore hitting all of them.


                                                                                                                               Page 5 of 6
They were all toppled by the wave and swamped into the sea by the strong current, she said.All of them, except Sukanya who didn’t
know how to swim, managed to get back to the shore.
She said they all shouted for help when they saw Sukanya far into the sea struggling to stay afloat.
When jet-ski operators came to help, Sukanya was nowhere to be found, she added. The search went on for about 30 minutes
before her body turned up, Apatsara added.
Police said three people died last year from similar incident. They warned residents and tourists alike not to stay too close to the
water while sightseeing.

IHG to Take Over Samui Icon                                   Asia Travel Tips
InterContinental Hotels Group has signed a management agreement with Thai company, Elite Villa Co., Ltd, to launch the
InterContinental Resort brand in Koh Samui, Thailand.
IHG will take over the management of the existing Baan Taling Ngam Resort & Spa, one of the island’s very first luxury resorts.
The popular resort sits atop a cliff amidst coconut plantations and has 300 metres of its own beach frontage along the scenic coast of
Taling Ngam. It also offers one of the best panoramic sea views of the National Marine Park and the neighbouring ‘Five Islands’, an
image that has been on the front cover of numerous top magazines around the world.
The 79-room resort will close its doors to undergo an extensive refurbishment. More than US$15 million will be invested to upgrade
the resort and upon completion. The InterContinental Samui Baan Taling Ngam Resort is projected to open by 1 December 2011.
Vikorn Srivikorn, Managing Director of Elite Villa Co., Ltd, said, “The current property has a great history – it started out as Koh
Samui’s first luxury resort and today remains one of the top resorts in the island. The InterContinental brand also has a long and rich
heritage, and I believe our future guests will have an experience that combines a great location as well as the services and facilities
associated with the InterContinental brand.”
The InterContinental Samui Baan Taling Ngam Resort will be the brand’s second resort in Thailand, joining the very impressive
InterContinental Hua Hin Resort, which opened in 2009.

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