Business

It’s no surprise that millennials now make up the largest share of traveler demographics and are the biggest factor in why independent hoteliers will work to perform better than in previous years. Having a full grasp where and who your business comes from is the first step in building proper revenue management.

Millennials, in general, have remained neutral with their opinions on branded hotels, and prefer seeking out a unique experience to staying loyal to one particular chain. Factors that attract a millennial traveler include urban renewals and adaptive reuse for that one-of-a-kind stay.

Remember that technology also plays an important role in their day-to-day lives, so ensure your Wi-Fi systems have enough bandwidth to meet their demands. This technology is not only required in each guestroom, but also in any large social gathering area that promotes a work/play environment.

Here are some other factors to consider in revenue managing for boutique hotels.

Distribution of rooms
With an established buyer persona, we can now look at your ideal revenue mix.

Direct bookings are by far the most cost-effective business for boutique hotels so it is always the goal to drive business to our own booking channels. Identifying what percent of business you need from group sales, global distribution systems and online travel agencies is important to a successful revenue strategy. Understanding the cost of all of your booking channels allows for you to properly layer in business by evaluating the effective average daily rate and adjusting your available rates accordingly.

Set occupancy thresholds for your hotel as key indicators of when to increase your rates. The further out a guest books a stay, the better deal they should obtain—in most cases. The worst thing you can do is to train your guests to book last minute by reducing rates or making last-minute deals available.

Without the power of a brand sales team and the tools that they provide, your independent hotel’s sales efforts need to ensure that they are utilizing the right channels to be effective.

Identify your hotel’s ideal rooms-to-space ratio to maximize profits on any piece of group business and to ensure your revenue manager and sales team are on the same page.

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Bill Gates makes a point of talking about how optimistic he is, which can seem like madness when you look at the massive and complex problems he and wife Melinda have set out to solve. Through the work of their Gates Foundation, they want to cut carbon emissions to zero, drop childhood deaths in half from their 2015 levels (already sliced in half from 1990 levels), quadruple the access to contraception in the developing world (from 30 million today to 120 million by 2020), bring down the number of women who die in childbirth by 75% and wipe out entire diseases: TB, HIV, Guinea worm, polio, malaria. And while they’re at it, they intend to end malnutrition.

You could forgive them for tempering that optimism a bit lately. Governments at home and abroad have started looking inward, skeptical about the value of the kind of foreign aid that developing countries rely on for those health gains. In the U.S., the Trump administration has committed to cutting environmental protections, cast doubts about vaccines and reinstated Reagan-era “gag” rules that caused contraception availability in Africa to drop.

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A rising number of direct flights from mainland China is helping the Thai island of Koh Samui fill the gaps in its traditionally seasonal tourism sector, a new report has found.

According to the latest Samui Hotel Market Update from C9 Hotelworks, both direct flights to the island and new services to Surat Thani Airport, the closest secondary gateway, have led to a sharp rise in Chinese visitors to Samui. This, according to the report, means that mainland Chinese travellers are now “filling in the gaps of a once highly seasonal destination”.

As a result, island-wide hotel occupancy hit 72% in 2016 and airport arrivals pushed over the 1.2 million threshold.

Much of the momentum can be attributed to Bangkok Airways’ international expansion, which has shifted in focus from Southeast Asia to North Asia. In the second quarter of this year the carrier will increase flights to Samui to Chengdu to a daily service, and it is expected to add Chongqing at a later date. A THB1 billion (US$28 million) upgrade of Samui International Airport is also expected to commence this year.

“Samui’s airlift is no longer a one trick pony with the emergence of nearby Surat Thani as a secondary gateway. Flight arrivals last year to the latter spiked up by 30% and are forecasted to grow further in 2017,” said Bill Barnett of C9 Hotelworks.

“Just as we have seen the twin airport story in Bangkok play out with Suvarnabhumi and Don Mueang, the “plug and play” model for the resort-led market of Samui is benefitting from both strong domestic and international trajectory from Bangkok Airways, but also the low-cost carrier rapid fire expansion in Surat Thani,” he added.

The report added that while the rise of low-cost arrivals has not reduced average hotel rates, there are signs of a shift in the demand. “With the steady growth of airlift to Surat Thani Airport, Samui is expected to attract a broader market of midscale and upscale segments with pipeline hotels weighted toward these types of products,” it stated.

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Britain’s biggest banks are preparing to relocate out of the UK in the first few months of 2017 amid growing fears over the impending Brexit negotiations, while smaller banks are making plans to get out before Christmas.

The dramatic claim is made in the Observer by the chief executive of the British Bankers’ Association, Anthony Browne, who warns “the public and political debate at the moment is taking us in the wrong direction”.

A source close to the Brexit secretary, David Davis, said he and the chancellor,Philip Hammond, had last week sought to offer reassurance that they were determined to secure the status of the City of London.

However, the government’s stated intention to take control of the freedom of movement into the UK is widely recognised among officials to be a hammer blow to any chance of retaining the present terms of trade for banks, particularly given the bellicose rhetoric of major politicians on the continent.

The so-called passporting rights for members of the single market allow UK-based banks to offer financial services to companies and individuals across the EU unimpeded, yet the French president, François Hollande, is among those who have insisted in recent weeks that hard Brexit will mean “hard negotiation” and Britain will need to “pay the price” of leaving.

A hard Brexit would involve the UK leaving both the single market, a central pillar of which is freedom of movement, and the customs union, which could potentially reintroduce tariff and non-tariff restrictions on British imports and exports.

Browne warns that British and European politicians who appear to be pursuing “anti-trade” goals need to recognise that “putting up barriers to the trade in financial services across the Channel will make us all worse off”.

Browne, whose organisation has been in intense negotiations with the government, further warns the EU that banks based in the UK are currently lending £1.1tn, therefore “keeping the continent afloat financially”, and this arrangement is at risk.

Anthony Browne of the British Bankers’ Association says the whole of Europe will suffer if the UK chooses a hard Brexit.

Of Britain’s position, he writes that banking is the country’s biggest export industry by far and the current trajectory threatens not just tariff-free trade, but the legal right of banks to provide services.

“Most international banks now have project teams working out which operations they need to move to ensure they can continue serving customers, the date by which this must happen, and how best to do it,” he says.

“Their hands are quivering over the relocate button. Many smaller banks plan to start relocations before Christmas; bigger banks are expected to start in the first quarter of next year.”

Sources close to Davis dismissed speculation that he believed a solution would be for the City to strike an “equivalence” deal with the EU, under which the regulatory systems are recognised by both parties through a one-off agreement. Browne writes that some Brexiters have made such an argument, but such a deal would not be enough to stop banks deserting Britain.

“On this side of the Channel, some high-profile Brexiters have poured scorn on the idea that we need passporting at all and that other regimes such as ‘third country equivalence’ will do,” he says.

“But the EU’s equivalence regime is a poor shadow of passporting – it only covers a narrow range of services, can be withdrawn at virtually no notice, and will probably mean the UK will have to accept rules it has no influence over. For most banks, equivalence won’t prevent them from relocating their operations.”

It has been reported that Goldman Sachs is among those drawing up plans to transfer around 2,000 of its employees to a rival European city, should the UK lose its passporting rights.

The industry body TheCityUk has claimed that up to 70,000 financial jobs could be lost if Britain leaves the EU without a new, credible relationship in place for the City of London.

Browne says he understands the motivation of those who are seeking to take business from UK shores, but he condemns politicians who appear to be willing to break up the integrated financial market, which “makes it easier and cheaper for French farmers, German manufacturers and Italian fashion designers to secure funding”.

He writes: “It is understandable that other European cities want to attract jobs from London. Delegations from Frankfurt, Paris, Dublin and Madrid are all coming to the UK to pitch to bankers. I am pro-competition, and long may they try to make their labour market and fiscal policy more attractive to international investors.

“That is not the problem. The problem comes when national governments try to use the EU exit negotiations to build walls across the Channel to split Europe’s integrated financial market in two, in order to force jobs from London.”

The scale of the task facing the UK in striking a good Brexit deal with the EU has been put in stark relief by the apparent collapse of the proposed EU-Canada trade pact.

On Saturday, there were frantic diplomatic efforts to salvage a deal after Canada’s international trade minister, Chrystia Freeland, walked out of talks. She described the situation as “impossible” on Friday and cast doubt on the bloc’s ability to operate effectively after the proposals were blocked by a regional administration in Belgium.

The parliament in Wallonia is holding up the deal, although the region’s leader, Paul Magnette, suggested the standoff could be resolved within days. It has concerns the deal will undermine labour, environment and consumer standards, and allow multinationals to crush local firms.

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BOI-efficient tax structuring

The Thailand Board of Investment is the governmental agency to promote foreign direct investments in Thailand. Key benefits of a BOI promotion are (i) the Foreign Business License to do business in Thailand with up to 100% foreign shareholders, (ii) the right to acquire legal ownership in real estate and (iii) tax holidays.

Tax holidays give a BOI promoted project a tax exempted period of up to eight years, followed, as the case may be, by a 50% tax reduction for an additional period of time. Terms and conditions apply.

The foreign investor enjoys tax holidays with a corporate income tax rate of 0%, withholding taxes of 0% and Thai income taxes of 0%. The 50% tax reduction will result in a 10% Thai corporate income taxation – if tax rates remain unchanged in the future. In addition the investor ha his specific tax burden in his country of residence and, if he is part of an international group of companies, certain other tax rates. These different tax rates apparently create the perfect storm for a highly efficient tax structuring.

Tools and modules of the BOI tax planning

Experience shows that many foreign investors are happy enough to successfully apply for a BOI promotion certificate which gives some sort of tax holidays. From the tax advisors point of view it is sad to see that possible tax advantages are generously wasted by ignorance and lack of knowledge. These are the tools and modules of efficient tax planning under a BOI promotion scenario:

The Board of Investment does not promote companies, but projects. Therefore, the project has to be carefully defined taking into consideration the cross-border tax value chain. Profitable elements have to be included, loss-maker have to be carved out. The contractual arrangements have to assure that the benefits of a tax holiday are utilized at the best possible.
It has to be evaluated whether it is possible to split one project into pieces to optimize the structure. Not each BOI promoted project gets tax holidays, and it would be preferable to have the successful projects with and the less profitable projects without tax holiday status.
The methods and modalities to offset losses between BOI promoted projects within the same legal entities had been subject to discussions during the last years. While the BOI traditionally had an investor friendly “each tax exempted project is promoted separately” approach, under the 2017 amendment of the BOI Act, the “one entity taxation” concept has been introduced. This might require the separation of each BOI-projet in a separate corporate entity for an efficient tax structuring.

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London’s financial services industry is already planning to move business overseas due to the uncertainty of the Brexitprocess, the head of the British Bankers’ Association has warned.

Anthony Browne blamed fears that European Union (EU) politicians will want to erect trade barriers in an attempt to weaken the City of London during the Brexit negotiations for the planned moves.

Smaller banks could begin moving some operations overseas within weeks, with larger institutions following in the first few months of 2017, he predicted.

“Their hands are quivering over the relocate button,” he said.

Writing in The Observer, he said: “Banking is probably more affected by Brexit than any other sector of the economy, both in the degree of impact and the scale of the implications.

“It is the UK’s biggest export industry by far and is more internationally mobile than most. But it also gets its rules and legal rights to serve its customers cross-border from the EU.

“For banks, Brexit does not simply mean additional tariffs being imposed on trade – as is likely to be the case with other sectors. It is about whether banks have the legal right to provide services.”

The industry would like to see the continuation of the EU’s “passporting” regime, which allows financial services firms based in the UK to operate throughout Europe without seeking separate authorisation.

He warned that in European capitals and among British Eurosceptics “the rhetoric is hardening” and politics could trump the economic advantages of allowing the present system to remain relatively untouched.

“The problem comes – as seems increasingly likely, judging by the rhetoric – when national governments try to use the EU exit negotiations to build walls across the Channel to split Europe’s integrated financial market in two, in order to force jobs from London.

“From a European perspective, this would be cutting off its nose to spite its face.

“It might lead to a few jobs moving to Paris or Frankfurt but it will make it more expensive for companies in France and Germany to raise money for investment, slowing the wider economy.”

Banks have called for transition arrangements to be put in place after the UK leaves the EU but the uncertainty over the future – with years of negotiations with Brussels ahead – has left them with little option but to take steps to protect their futures.

Mr Browne said: “Banks might hope for the best but have to plan for the worst.

“Most international banks now have project teams working out which operations they need to move to ensure they can continue serving customers, the date by which this must happen and how best to do it.

“Their hands are quivering over the relocate button. Many smaller banks plan to start relocations before Christmas; bigger banks are expected to start in the first quarter of next year.

“London will survive as a global financial centre. Finance is inventive and will find a way through.

“But putting up barriers to the trade in financial services across the Channel will make us all worse off, not just in the UK but in mainland Europe.”

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INDUSTRIES AND MANUFACTURING IN THAILAND

Manufacturing and industry have played a significant role in Thailand’s economic growth. Since most manufactured products are export items they bring tremendous amount of income to the country each year. Major Industries include: tourism, textiles and garments, agricultural processing, beverages, tobacco, cement, light manufacturing such as jewelry and electric appliances, computers and parts, integrated circuits, furniture, plastics, automobiles and automotive parts.

Thailand is presently also a major center of the auto assembling industry in Southeast Asia. The industry creates employment and income for Thailand and the Thai people, and enables further development of the steel production industry. In addition, world’s second-largest tungsten producer and third-largest tin producer

Thailand is Asia’s most developed auto parts market and a hub for the likes of Toyota, Honda and Mercedes-Benz, making cars and car parts the country’s No. 1 export in 2012. The floods in 2011 disrupted more than 100 components makers.

Thailand is the second-largest exporter of computer hard drives and makers other components used in personal computers. Thailand’s electronics industry faces competition from China, Malaysia and Singapore. Important and fast-growing production industries are machinery and electric tools, furniture and wood products, canned food, and plastic products, while production industries that account for major export items are high-technology products such as integrated circuits and parts, hard disc drives, electrical appliances, vehicles, and vehicle parts. [Source: Thailand Foreign Office, The Government Public Relations Department]

In 2006 industry contributed 44.9 percent of gross domestic product (GDP) but employed only 23 percent of the workforce. This relationship is the opposite of the one applying to agriculture. Industry expanded at an average annual rate of 3.4 percent during the 1995–2004 period. The most important subsector of industry is manufacturing, which accounted for 34.5 percent of GDP in 2004. The industrial production growth rate in 2011 was -9.3 percent (2011 est.). country comparison to the world: 165. [Source: Library of Congress, CIA World Factbook]

Over the years Thai manufacturing has been plagued by low production and sloppy work; the manufacturing base was weak; and the component base of industry was foreign owned. Traditional village-level industries: sewing machine operation, blacksmithing, boat building. Brass, pottery and charcoal manufacturing. In Chiang Mai, hundred of highly-skilled women make fishing lures. Most are exported to the United States, which boats a $1-billion-a-year fly-fishing market.

Some companies that had factories in Thailand have switched their operations to China. Thailand and Malaysia took 10 years building their expertise, production base and infrastructure for a precision metalworks that could sell components to Swiss watchmakers. The Chinese took over the business in only a year. China is also creating a market for Thai goods.

In the 1980s, South Korea was leading manufacture of sports shoes and cheap textiles. These products are now made in China, Thailand and Indonesia while South Korea now manufactures semi-conductors and other high tech products. Thailand has hoped to follow a similar model.

Nike and Poor Working Conditions

Nikes are manufactured in Vietnam, China, Indonesia and Thailand. It has been criticized for hiring underage workers, paying subsistence wages, hiring abusive managed and exposing employees to dangerously high levels of toxic chemicals. Some Nike factories have been described as “little more than prison labor camps.” Employees work 72 hour weeks and can be fired for refusing over time. One study found that workers at factories that make Nikes and Reeboks, monitored in 1995 and 1997, earned as little as 10 cents an hour and toiled for up to 17 hours a day. In response to criticisms, Nike asserts it doesn’t make shoes, it subcontract the work.

Responding the criticism Nike promised to raise the age of employment to 18, improve safety use water-based rather solvent-based glues and use machines that do cause serious injuries. Some factories offer free day car and health checks and provide continuing education for their employees.

In 1998, Tim Larimer of Time wrote: “Nike’s factories in the region are above average…[We] found them to be clean, brightly lit and well-ventilated. Where the employees have to use foul-smelling glues, there are plenty of fans to carry the fumes.”

Mattel has a factory in Thailand See China

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Thailand has come a long way in recent years, perhaps a lot further than what many people might imagine. The economy has seen steady growth over the last 25 years with this expected to continue at between 2.9% and 3.3% between 2016 and 2018 according to The World Bank.

This growth is certainly significant when you consider other countries in the region are experiencing slowing growth or are already a long way behind Thailand.

With ASEAN now in place, although the effects of which are yet to be fully experienced, you have to question the role that Thailand will play within the community. As always there will be doubters but when you think about it rationally Thailand is in a very strong position.

The country is blessed with natural resources, lots of large multinationals that have a presence in the country, the currency is relative stable whilst at the same time growing in strength and the stock exchange and retail markets are following in a similar fashion.

Labour is Thailand is not as cheap as some neighbouring countries although the workforce has a much higher level of skill thanks to better education and the influence of overseas companies. This will give Thailand an advantage over emerging nations as pay scales are still lower that some of the countries that may be perceived as being more developed. The government also offers attractive assistance to overseas companies in the form of BOI backing in certain industries – again benefitting the country as a whole and encouraging increased overseas investment.

Cambodia and Myanmar often make headlines for being growing forces within South East Asia and indeed this is the case but this should not take anything away from Thailand, a country that has already achieved these goals and is now striving to reach far higher targets and objectives. A few years of financial stability and continued growth, something that is predicted, will see Thailand move far in front of these developing nations.

With the infrastructure firmly in place, Thailand is now looking to make gains on countries such as Malaysia, Singapore and Japan. There is no reason why these goals cannot be obtained and this is what makes investing in Thailand at the present time such an attractive option.

It is quite reasonable to think that Thailand could become a dominant economic force in the region and as the country starts to show gains the markets and property prices will inevitably rise.

Therefore it seems perfectly possible that a country such as Thailand could become an economic force within the region and maybe this would be less of a surprise than many people might think.

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Thailand saw moderate activity last year, with subdued private investment and manufacturing virtually stagnating for the second consecutive year. Moreover, the death of King Bhumibol Adulyadej in October cast a cloud on consumer sentiment, especially due to an official year-long mourning period. However, there is a silver lining as recent indicators suggest a slight uptick in activity in Q4: exports rebounded strongly in November and manufacturing growth rose at a multi-year high, lifting the subpar annual performance. The political state of affairs is unlikely to gain momentum anytime soon: a recent request from new King Vajiralongkorn to amend the military draft constitution is expected to delay the elections planned for 2017 to 2018. However, the changes requested are not pivotal: they only represent a slight shift of power from the King to the yet-to-be-elected government.

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