Danish entrepreneur plays monopoly in Thai hotel market

Toke Terkelsen in front of The Train Resort in Jomtien. This is one of the few resorts where Toke is the one and only investor – Photo: Lasse Sandholdt

The Covid crisis and its subsequent lockdown and restrictions have kept the tourism industry of Thailand in a stranglehold. Numerous hotel buildings are up for sale or rent and an industry waiting for investors to pick up the slack. One of the persons to do so is the Danish investor Toke Terkelsen. During the last year, he has leased 10 new hotels and according to him the prices has never been lower than right now.  

“It is like Christmas eve right at the moment” that’s how Toke Terkelsen describes walking the streets of Phuket as an investor these days. The “for sale” and “for rent” signs are hanging in one hotel after another. The same sight is common in Chiang Mai. This situation is a unique possibility if you ask Toke. He has bought ten new hotels in these two popular vacation destinations adding them to his collection of other hotels and apartments. He is now rushing to get ready for a hopefully busy tourist season free from the shadow of Covid.

“Right now, we are hiring a new staff member every day. The days are very long but try getting 20 hotels ready to function at once. It’s a big handful,” Toke Terkelsen says.

We are driving through Toke’s hometown of Jomtien on a sort of roundtrip where he gets the status updates from his different resorts around the city. It’s clear that it’s a hectic time for the Danish entrepreneur. One hand is on the wheel the other one is holding the phone where voice messages are being recorded for lawyers, potential partners, and other people involved in the projects of the Plan B company that Toke has founded.

It is not the first business venture that he has been involved in. He studied to be a shipbuilder but quickly switched to the IT industry working in different companies. In 2005 he came to Thailand with his own company Bakuri Software that did search engine optimization among other tasks. According to Toke, the company was successful with 50 employees on the payroll, but when the financial crisis hit in 2008 people stopped paying their bills and the company went bankrupt.

“I cracked big time! everything was gone,” Toke says.

The bankruptcy made Toke completely reset his life, he explains.

“I skipped my ex-wife, I skipped my friends, I changed my phone number, moved to another city, and completely started all over again. I started to hang out with people who had a lot of money and I studied what they did. If you want to get good at badminton you play with the people who are really good at badminton,” Toke explains.

To get into the investment market Toke was able to borrow 100.000.000 Baht from one of his new friends. The deal was that the money needed to be paid back within five years. This money became the cornerstone of Toke’s career in investment in which he has been working ever since.

There are many things which has to be sorted out with different employees during a normal day – Photo: Lasse Sandholdt

The covid investment climate

The Covid crisis has had a huge impact on the investment climate in Thailand. The forced shut down of the country has meant that hotel owners and operators have lost huge amounts of money. Toke himself lost a lot of money during the lockdowns of the two recent years. He was lucky to own some condos that he was able to sell so he could scrape together the money needed to pay rent on his hotel leases, pay his staff and avoid another “crack”. Now, after making it through two years of tribulation, it’s a buyer’s market like never before in the tourism industry.

“Covid has been difficult for everybody! A lot of people have lost a lot of money, and that is very sad. But on the other hand, it opens up the opportunity for new people,” Toke says.

One of Toke’s primary business models is investing in leasing contracts on hotels. In this model, Toke and his team handle the daily operation of the hotel and get the revenue from the resort. He pays a monthly rent to the hotel owner together with a deposit at the takeover. In normal times he would also have to pay a big amount in what is called “key money”. Key money is a figure paid to the current hotel operator. The key money expense is however where the huge difference is felt from pre covid times.

“Because of Covid, there is almost no key money which has to be put down now. So, you can take over a hotel or a restaurant for very little, then run it for a year, and then flip it (Sell) with a big profit,” Toke Explains.

Toke is surprised that more people are not occupied with searching the market for the many good investment opportunities in Thailand. One of the obstacles for him is to find more investors to raise money so he can make even more new deals. He believes that it would be wise for more people to put their savings into tourism at the moment.

“The option is there for everybody and it’s a very reasonable investment method if you do it with someone who understands Thailand and how the industry works down here. Otherwise, it can go really wrong.” Toke says and goes on to explain.

“I never have more than four investors on a project, and I never hold the share majority. So, if the other investors don’t like the job that I am doing they can always kick me out.”

Toke recognizes that there is a risk of Thailand closing again due to the covid situation, but he thinks that it is a risk you should be able to run.

“With the prices as low as they are right now, I don’t know why more people are not jumping on the opportunity. I know some people are scared that the government is going to close down the country again, but I don’t think they will. Sometimes you also just have to take a risk,” he says.

Photo: Lasse Sandholdt

No retiring.

With Thailand now opening for international tourists again, the days are long and busy for Toke, but he likes the job. Investing is like a sport to him.

“I could retire now if I wanted to. But I’m the type of person that just can’t sit still, I need to have something to do. I really have fun with my job,” Toke says.

About Lasse Sandholdt

ScandAsia Journalist • Scandinavian Publishing Co., Ltd. • Bangkok, Thailand

View all posts by Lasse Sandholdt

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