The resort town of Pattaya has become a favourite destination for older tourists, welcoming more than four million visitors every year.
Despite the negative image associated with the resort town, it is undeniably experiencing market recovery both in terms of tourism and property sales.
The most important factor for Pattaya’s growth is its strategic location. It is the closest beachside town to Bangkok – a bit more than an hour’s drive away thanks to the new highway that connects the capital directly to Central Pattaya, bypassing Na Klua and saving up to half an hour in commuting time. It has all the amenities one could want – shopping, seafood, quality five-star hotels, international standard medical facilities, golf courses and beaches. Though it does not offer the best beaches in Thailand, it has all that one can need for a short weekend away.
It is also located next to Thailand’s industrial hub and the eastern seaboard, which helps generate business and draws people to Pattaya and its vicinity.
In terms of tourism, Thais and Russians account for nearly 50 per cent of tourists in Pattaya, followed by visitors from China, Germany, the Middle East, India and other European countries. The trends seen in tourism are also mirrored in the makeup of foreign purchasers for properties in Pattaya.
One of the complexities of the Pattaya property market is that it draws a mixed bag of buyers, ranging from those who are seeking guaranteed yields, through Thai singles, families with children and expatriates looking for a weekend home to regular tourists seeking affordable accommodation.
The diversity in demand presents a challenge for developers in Pattaya because, while there is buoyant demand, it is essential that developers are clear about the buyers and deliver a product that matches their taste and requirements. Much thought and consideration is required to come up with a successful mix of types and sizing of units and project scale as well as the project design and concept because each market segment varies in terms of the volume of demand and the requirements.
If each element of the project is not planned well enough, it will be difficult to fix once the project is launched. Even the marketing tools and channels needed to reach each target group have to be different. This is unlike the Bangkok condominium market, which has a more or less proven development model and marketing channels adopted by most projects.
Another challenge in Pattaya is that, with plenty of prime land available for development and clear signs of market re-covery, many small and large-scale developers have been prompted to launch more projects, making the market more competitive.
As a developer, one should be cautious when entering a new market. Entering a booming market helps boost the prices for new projects, but this can be achieved only if the market fundamentals are carefully studied.
History always repeats itself in the Thai property market – every time there is a sign of strong recovery, there is a rush to develop and copy successful projects, which results in overbuilding. To survive the wave of new supply, the key challenge in this market is delivering a project that satisfies the requirements of a diverse target market.
Source: The Nation