Anders Palm and Pelle Johansson from Sweden saw this trend coming and established early on their company “Thailandspecialisten” specialising serving their clients via the Internet. Today they can consider themselves market leaders regarding booking of hotels for Swedish tourists, and are living proof that, by hard work and a strong will you can build up something from scratch with your bare hands, and succeed in Thailand.
For most people it can seem like a dream scenario; living and working in the middle of a sun paradise associated with sandy beaches, turquoise-coloured ocean water, fabulous resorts and splendid Thai seafood cuisine.
But for Anders and Pelle, Phuket means ordinary days even if they still enjoy what the surroundings have to offer after 16 years; for example playing golf all the year round and visiting their own favourite islands or beach spots on weekends.
“This fact that it is a tourist island, you don’t really think about it. Of course we work with it all the time, but we don’t really live in the tourist environment,” says Pelle.
“I think that I could not be here permanently without doing anything, I would probably go up the wall with boredom.”
Naturally, the attraction of the place and abundance of Western consumers generate many foreigners, who ponder the matter, and then also try to establish business on the island – but few of them last very long. Anders and Pelle are perhaps the exception from the rule, who have built up their businesses mainly on the back of more potentially and demanding ventures, rather than bars or restaurants – even though one of them partly ran a bar back in the early days.
Today, they are well established as the local Swedish Thailand specialists on Phuket, right in the middle of the tourist destination, giving personal service and tips online, or by phone for that matter, to the highly Internet-literate Scandinavians. Serving hundreds of traditional travel agents as well as private customers, and already successful on the Swedish market, from now on they target also Norwegians with full force (they were too busy yet to expand also into the Danish and Finnish markets).
Normally a customer can choose between booking her holiday trip with a charter business, a travel agency in the home country or through a website on the Internet.
“Our strength is personal service,” the former diving instructor Anders states. Pelle, who is also the director of The Residence Kalim Bay, agrees:
“As Swedes being here we can deliver. It is important for a travel agency to get quick answers to their enquiries.”
The alternative, Anders explains, is to use agents in Sweden who contact another agent in Thailand, and it takes two to three days. Going instead through Thailandspecialisten saves both money and time.
“We are cheaper, because the traveller can avoid several middlemen’s hands.”
They also target private customers, grabbing hold of the growing market of so-called Free Independent Travellers (now you know a new term for what you can be except from a backpacker or charter tourist). Both Anders and Pelle see this group as a growing trend and around 50 per cent of their customers are already individuals, booking through www.thailandspecialisten.se.
“This is what we are hoping for and want,” says Pelle who has heard that many charter companies have increased difficulties. He believes that the traditional travel agent has had its day.
“Absolutely, I think so. Internet is their big horror, but for us it is perfect, as we work entirely on the Internet.”
“We find that first-time travellers choose charter but the second time they will rather use us. They want to keep the security of having somebody booking for them, but they want to visit several places,” says Anders explaining that as a consequence they book many round tours for their customers including planning the local transport to make the transports effective.
And as they are Thailand experts they offer not only Phuket but all other destinations where they see a demand. It is an ongoing process where they constantly need, and try, to keep their fingers on the pulse on what is happening within the travel trends. Their best trend-measurement is probably the feedback they get from their costumers, both travel agents and individuals.
Whenever Anders and Pelle have time they look for new hotels and revisit the ones they already offer. On a low-season September day we followed the two Swedes on their daily round of hotel inspections along the famous beaches of Kata, Karon, Patong and Kamala on Phuket. And the inspection tour certainly showed why this must be a never-ending process, part of their business. Near one hotel a construction of another hotel was going on (which can of course disturb hotel guests), the rooms at one bungalow resort on a hillside gave an unpleasant smell of mould, and a third hotel were in the middle of renovation with promise to be ready by the middle of October (which requires another inspection). Many times it can be difficult to make the correct judgement as many rooms are empty for a longer period during the rainy season, but clearly the hotels need constant maintenance in this climate.
Anders and Pelle make sure to find out with their own eyes in what condition the hotels they choose to book are. Hotels that do not answer up to their expectations get deleted. “If you start with a park of ten hotels listed, you may end up with five after a while och then you must add on other ones. You need to update constantly,” Anders explains.
So what are their main criteria when choosing hotels?
“Price is important; to find a level that we can sell that people want. Then we need to find within that price scale, the hotels that we think are worth selling and get value for money. We have found many hotels that are cheap where the guests think they get a lot,” says Anders.
Other obvious concerns are the location in relation to the beach, what the rooms look like, hotel facilities etc. “We have found some but it is difficult to find the kind of hotels that look special. Sometimes one wish there would be more of some funny and special hotels to book. Sometimes we find them, like in Khao Lak (north of Phuket) there are some, but then for those to have a good price too is difficult.”
“The problem is that people believe that you can still rent a bungalow on the beach and then just run out into the water, basically for free, like you could ten to fifteen years ago. But that doesn’t exist these days. Land is too expensive,” adds Pelle.
A travel agency can of course seem like a very ordinary business idea, but Anders and Pelle are targeting a specific group of customers – Scandinavians, and more specifically middle-class families – and can of course benefit immensely from being Swedes, plus with their local Thailand knowledge gained from many years of living here and the development of the Internet. They entered the market early, in time for when Internet really took the step into the Scandinavians’ living rooms through broadband. Add then the vital strength to be running the operation at the destination.
The start-up could have been better though. Call it bad timing. From having rented out flats to the charter travel company Always; arranged barbecue parties at Checkpoint Scandinavia or run a diving school since the late 1980’s; they opened up the travel agency in spring 2001. A mass send-out to travel agencies all over Sweden resulted in immediate commissions. So far so good.
Then came the 9/11 terrorist attack as a very unpleasant surprise, followed by SARS. But the Thailand specialists were prepared from the start to survive for at least 6 months without any income whatsoever from their business. They saw the effects of the Asian financial crisis in 1997 so they know what is required to survive. Anders and Pelle especially point out that they have built up their businesses slowly, always investing saved money for the future, buying land and building houses etc.
The year 1998 was in fact very good business within tourism, “Dead straight up,” according to Pelle. Tourists poured in to Thailand because of the cheap currency and at that time he was hiring out serviced apartments to tourists.
In fact Pelle took the chance to buy a share of an apartment already back in the late 1980’s at Kalim beach, not really knowing of the great opportunities that were yet to come. Quite soon, with his partner, he saw the opportunity to let it out when they were not staying there. So Pelle contacted Always, and then gradually purchased more apartments and started renting them out to the charter tour company.
Pelle, who decided to move down to Phuket permanently, describes the whole Thailand adventure like sailing easily through life with a fair wind behind.
“I worked for the hotel and hired them out to Always. They were the biggest then, so we were lucky as charter then arrived to Phuket. Now business has gradually developed with more apartments and his partnership with Anders. ”
Anders, on the other hand, worked in the diving business for over ten years but left it because of difficulties in making any money within that business. In fact he first came to Thailand without any investment money at all.
In 2003 they could see the effect of drop in tourism caused by SARS.
“I believe 16 000 employees were laid-off. Many were re-employed for the high season, but during June and July all these people were out of work. That was a big crisis. The staff had only two choices; accept lower wages of up to 50 per cent or leave. Many hotels went bankrupt, changed ownership etc. It’s a jungle out there,” says Pelle.
The outbreak of bird flu, though, hasn’t much affected their business.
“We can only see that bookings have increased considerably this year for the upcoming season, compared to last year,” says Pelle.
“This year has been O.K, we had the bird flu in March, April, but it did not affect our bookings that on the contrary, for us, never have stopped since last season, but instead took off again in May when we started getting a lot to do,” adds Anders.
A more long-term trend is the increasing number of Swedes who want to come and live in Thailand.
“I have met some friends who stayed in my hotel and who bought an apartment and now stay here during the winter season. I think that will increase a lot; people on early retirement who’ve got some money in the bank and come down and stay here for six months, playing golf and enjoying their lives. I think that is increasing.”
“But coming here and not having to work is probably easier than thinking that you will be able to get work. Not many can succeed in doing that – making money and not just surviving,” Pelle continues. He in fact believes that not that many come to a place like Phuket to start any proper business that requires more knowledge and effort than the usual restaurant or bar business.
What Anders and Pelle see, year after year, are how new people arrive trying their luck at starting up business.
“The most usual variant is that people try to make money running a bar or restaurant. They think it could be easy to sit in the bar with the guests and make money instead of spending them. But it fails on this, I think one out of one hundred places down here have resulted in any profit. Most of them endure maybe one season and then they have perhaps emptied their capital completely. Then they cannot even sell the goods afterwards, leaving poorer than when they first arrived,” says Anders.
“And often become alcoholics,” adds Pelle. “Many times they are too gullible, they get fooled, clearly.”
So, a big ‘no-no’ in Thailand, according to Anders’ advice, is not being very careful in selecting colleagues here when it comes to running a business.
“A normal problem is that people here on vacation, find holiday friends, and then suddenly start a business with them. Sometimes they meet somebody in a bar and suddenly become ‘great friends’ with them. It is like leaving your brain behind at Arlanda [the International airport in Stockholm] and believing that everything is going to work out fantastically. Many of these holiday ‘friendships’ simply end up in tragedy. The investors lose their money and make enemies of their so-called business partners – total catastrophe.”
Are there any specific qualities that are good to have for living and working in Thailand?
“First of all one should be very careful,” says Pelle. “‘Jai yen’, don’t lose your temper. It is easy to get angry about everything. Perhaps we still do, but not as much as the newcomers. I think that to be able to stay here a long time you must somehow start going with the flow of the system. Otherwise you will soon be on a plane back home again. Of all the people that I can even remember from the last 16 years – Swedes or other Scandinavians – not many are still around. 90 per cent of them are back home now,” says Anders.
“They get fed up or their business does not work any longer – or there can be family reasons. After a while they reach some kind of dead end and think: “I can’t take this any more. It’s just too difficult.”
Pelle and Anders have stayed on, though, despite the bureaucratic complexities and are confident about the future and will continue to build up our Scandinavian market.
“I think our next step will probably be to expand within Asia, to introduce new interesting destinations, like Vietnam and other countries in the region,” says Pelle.