Shrinking Euro Hits Phuket
The Phuket Gazette.
It's June and the pigs are off and running in Europe. In this case, it's the possible meltdown of the economies of Portugal, Ireland, Greece and Spain.
The Greeks have already hit the streets in something that resembles a toga party gone very wrong. Concerns over the incredible shrinking Euro are creating such strong emotions that even the Germans have been seen openly weeping into their beer steins.
While Kenny Rogers knew when to hold em, when to fold em and when to walk away or run, unfortunately in this global world, there remains no safe haven for investors or even those just looking at taking an annual two-week holiday.
For the past decade, Phuket's tourism and property have thrived from the Euro zone. Yes, those fun-loving people who just want to bask in the sun just can't get enough of all things Thai.
Across the channel, Brits were (aside from the nearby Hong Kong and Singapore buyers) the most avid buyers of island real estate. In the lead up to the mid-decade property boom, no other market fueled the fires of commerce like the UK.
As with all things, night must fall, and as the pound took a veritable pounding (which somehow fell into the mixing bowl of the Thaksin coup, Lehman's meltdown, Maddoff, and the yellow-and red-shirt protests), we find ourselves in a virtual Laurel and Hardy moment, uttering “here's another fine mess.”
Yes, 2010 is without doubt shaping up to be a messy year.
Speaking to a number of retired Brits who live on the island, the realization is coming to them that the exchange rate drop between the pound and the Thai baht has meant cost of living has increased drastically, in many cased three-to four-fold.
Expatriate residents are a fickle bunch, and many prefer to keep majority of their cash or investments in their home currency while for others recurring or pension payments are pegged to the pound. A growing number are now talking about packing their bags and heading home where the wild ride of currency and perhaps the harsh reality of the recent events in Bangkok are far away.
As we look to next high season, there are more questions than answers in a well-oiled tourism machine that eyes Europe as a high season staple, but this increasingly seems to be at risk.
Additionally, the previous go-to markets of the UK for property buying have been clouded in black streams so thick you can't even see below the water. It's like trying to see the bottom of the ocean in Louisiana in the middle of the horrific BP oil spill.
Meanwhile, even Thailand's back door neighbors in Korea are in trouble, where the sinking of a naval warship has created war mongering and jitters in a key regional travel market.
Yes we are all in a fine mess these days but like it or not, it looks like we are in it together.