The Future of Bangkok's Bar Industry

What will happened to Thailand's Bar and Adult Sex Industry after Covid-19
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BrettPitt
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Joined: Tue Mar 24, 2020 10:08 am

Sun Apr 26, 2020 9:26 am

Editorial Notes | Covid-19 Bangkok Pre/Post Bar Industry

Bangkok’s bar areas remain in darkness. The girls have scattered to all corners of the Kingdom, and loyal customers are now thousands of kilometres away, trapped in Farangland. As theories circulate about the future of the bar industry, I thought I’d throw a few thoughts out there on how things might look like when the lights come back on.

The Punters

The customer base of the bars is loosely made up of Thailand-based expats and naughty boy visitors from abroad. Mainstream visitors add to the numbers but in terms of the big picture, they are insignificant. When visitor numbers to Thailand plummeted in early March shortly before travel restrictions were introduced, most customers in the bars were expats. Trade was so bad that some bars closed voluntarily before the official closure order came. Some bars learned the hard way that they cannot survive on expat trade alone. Bars need both expats and visitors to survive, let alone thrive. When will foreign visitors be back? With millions being laid off and now out of work, many won’t have the money to travel. On the other hand, Thailand attracts many retired guys who have already made their money. Many of those who visit year after year have money. If notes are anything to go by, there is pent up desire amongst many to get back to Thailand. Visitor numbers will be down, but to what extent?

The Travel Industry: Border Controls | Travel Restrictions

I personally don’t expect to get on a plane this year. That’s not to say I don’t want to because I do. But I don’t think I will be able to. All over the world, border restrictions have made international travel anything from unpalatable to impossible. You have to consider the restrictions in your own country and in Thailand. At present, no-one can fly in to Thailand – not even Thai nationals. No incoming passenger flights are allowed until the end of this month and prior to this, the only foreigners allowed to enter Thailand were those with a work permit. Thailand is closed to visitors. No country is going to reopen its borders as long as there is a Covid-19 risk. Who knows when international flight schedules will return to some sort of normalcy. Until that happens, visitor numbers will be well down – and that’s a big problem for the bars. To make matters worse, I imagine flights are going to be expensive when they resume. Will we see the cheap return fares we had become used to on Thai or other Airways? I’m not holding my breath. Our feeling is that travel restrictions pose the biggest risk to the bar industry. It could be quite some time before we can travel again. How long can bars survive on expat trade alone? Not long, we would suggest.

The Bars | The Bar Owners

I’m not exaggerating when I say some bar areas are going to look rather different when the lights come back on. It’s a month since bars were ordered closed and already some big name bars have called it quits, including some very big names this past week. Before the bars were ordered closed, Mandarin in Nana Plaza announced it would close temporarily. London Calling in Nana Plaza had also closed. Last week Titanium in Sukhumvit soi 22 announced that it would not reopen. Hardly industry-changing, but what happened next could be…This week the rumour did the rounds that the Rainbow Bars in Nana Plaza had called it a day on their time in the industry. First it was said all of the Rainbow Bars, then just 1 and 3. Exactly what the story is, I have been unable to confirm but for sure, the future of some of the Rainbow bars is up in the air. We are cynical about whether Mandarin will reopen. Including Mandarin, London Calling, and possibly some of the Rainbow bars, that’s a good few bars which won’t reopen. No-one knows when bars will be allowed to open. With all of this uncertainty, bars are basically now worth zero. The halcyon days of 10 – 15 years ago when big Nana Plaza bars changed hands for well over $1 million are long gone. There is so much uncertainty for bar owners. Walking away would be really easy…

The Landlords

Landlords understand the current situation. They have a decent understanding of the bar industry, and they know how uncertain the future is. How much leeway will they give leasees? Will they be willing to offer deferred rent payments? A rent holiday? Thai landlords aren’t known for being easy to work with. Landlords are in the business of renting property and not in the bar business per se. If some bar owners walk away, landlords face a quandary. The only businesses willing to lease space in a bar area is a new bar – but if the industry is struggling will anyone be keen to start a new bar? If a new leasee cannot be found, the space could remain vacant for a long time. No landlord will be ok with that. Bars have been keen to lock in long leases and secure their future. Some bars have leases valid for several years. If some bars remain open while other bars walk away leaving space vacant – and the landlord is unable to lease out that space, what then? Funny things happen in Thailand when landlords want to take back control of their property.

The Girls

Where have all the bargirls gone? Some girls have returned upcountry to the family home. No doubt some are trying their luck online on the likes of Smooci and ThaiFriendly. Will the girls return to the bars when they reopen? While the bars need the girls, how much demand will there be with fewer customers about? Will the girls be willing to return to work if trade is poor? Would they be willing to accept much lower salaries? What about the agencies which supplied girls to the bars? Most agencies are but a Thai lady with a list of names and phone numbers. An agency is viable when the country has full employment and bars cannot recruit, but that is no longer the case. This would be a great chance for the bars to cut out the agents altogether. Some readers tell us they expect an influx of girls new to the industry, as millions of Thais have lost their jobs. There may be a few girls new to the industry, but I suspect it will be more like a slow trickle. The simple reason is that a Thai woman who is out of work, desperate for money and willing to sell her body will, in most cases, prefer to sell to Thai men. It’s easier and the format is preferable (no dancing in bikini necessary).

Summary

Naughty boys love to remind us that it’s called the world’s oldest profession for a reason – no matter what is happening in the world, the industry prevails. That might be true, but it doesn’t necessarily mean things will go back to the way they were. Many bars have been struggling for a long time and a thinning out of bar numbers would not be a bad thing. It would, however, bring with it a whole new set of complications. Fewer bars may not be able to support 3 major bar areas. The future of the bar industry in the short term is less about what happens in Bangkok, and more about when Westerners can resume traveling without restrictions and get back to Thailand. The bars cannot survive on expat trade alone. When will Westerners return to Thailand? Will they return in the same numbers? Will landlords give the bars a break on rent long enough for them to keep their doors open until the masses return? So many questions, and so much uncertainty. This really is the bar industry’s darkest hour.
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BrettPitt
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Joined: Tue Mar 24, 2020 10:08 am

Sun Apr 26, 2020 9:41 am

The Bar Industry’s Darkest Hour

Bangkok’s bar industry has faced numerous challenges over the past 15 years, but nothing like Covid-19. Trips to Thailand are being cancelled or postponed as fear spreads. No-one wants to contract the virus, and no-one wants to get stuck somewhere, caught out by ever-changing rules and border closures. Soon, the only customers in the bars will be expats. Can the bars survive?

The problem the bars face is simple. Fewer visitors to Thailand means fewer punters in the bars. That means less money being taken by the bar and fewer customers for the girls. And that’s a big problem because these girls aren’t in it for fun. If they’re not making money, they won’t stick around. Already, many have seen the writing on the wall and have left the bar. Not for another bar. They have gone home. They’ll return when things improve. But when might that be?

A friend whose wife runs an agency supplying a big-name, foreigner-run gogo had this to say, “There is obviously a bit of a panic in the coyote agency world as girls don’t want to come to work (which is understandable) and bars can no longer afford to pay the ones that do want to work. Many girls, unable to make ends meet, are returning home.”

For bars using agency girls, all it takes is a phone call to the agency and their daily expenses are slashed. That’s a start, but it’s not enough.

It’s not just about the money – or lack of it – for the girls. Many have chosen to stop working for now because they’re genuinely scared of contracting the virus.

First there were fewer customers. That resulted in fewer girls. And now with fewer girls those punters who do make it to the bars find it quiet and less fun. It’s a vicious circle.

Bars popular with Asians have been feeling it for a few weeks and over the past couple of weeks, bars popular with Caucasians have been suffering too.

This month is shaping up to be really bad. April will be worse. May is usually the worst month of the year for visitor numbers. Things are dire now, in March, one of the better months of the year. Just how bad will they be in May?

With visitor numbers plummeting, will expats keep the bars going? Unlikely.

I’d be surprised if there aren’t widespread bar closures come the end of this month. I just don’t think it will be worth it for many owners to stay open beyond the end of March.

But perhaps the bar owners won’t have to make that decision themselves. It might just be made for them. The Health Minister commented yesterday that the government should consider closing pubs and bars as they are a fertile ground for spreading the virus. The authorities could order the likes of Nana Plaza, Soi Cowboy and Patpong closed. After 11 Thais were infected with the virus after a night out at a Thonglor pub earlier in the week, it’s the sort of knee-jerk reaction Thai politicians are known for.

But it’s not all bad news, and there is an upside for those in Thailand now. Girls are hungry. Some of the younger, prettier dancers who weren’t previously available are now open to offers. Word is that rates are very much negotiable.

A friend of a friend making the rounds in Pattaya says that right now it is the best he has seen it in at least 15 years. Far fewer customers around, and the girls are hungry.

At the same time, some girls are more picky. From the owners of Smooci, I hear that in recent weeks escorts have become much more selective about who they choose to meet. They will cancel a booking if they see a Chinese name or merely if the customer is staying in a hotel that is popular with Chinese.

Back to the bars, much of the problem is that rents in Bangkok are crazy high. Would landlords consider discounting rent for a period? And in the unlikely event that a landlord agreed, would it even be enough?

Back to the idea that bars will rely on expats to see them through their darkest hour, I’ll leave you with a thought. A regular reader emailed yesterday saying his Thai Mrs had threatened to leave him if he went out to the bars as he often does, like many Thais she is terrified of contracting Covid-19.

It could be months before Covid-19 is brought under control. What sort of economic carnage will it cause? How much longer can the bars stay open with trade so bad? And if bars close and remain closed for a while, will they ever reopen? Are there many bars resilient enough to survive this? Could the bar industry be reshaped forever? The bar industry is facing its darkest hour.
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