2022 has already started, and so far it feels like a deja vu. Lots of similarities with January 2021. The overall business sentiment in Thailand is better than it was last year, but with Omicron spreading across the country I can see it diminishing, slowly but steady. Obviously it’s once again the hospitality industry which is suffering the most, with hotels and restaurants struggling to get any business through their doors. That is, of course, if they’re open for business at all.
Bars and entertainment venues had a chance to show the government that they would be able to operate their business responsibly over the New Year’s Eve period. But they blew it. No one adhered to any kind of rules and regulations, and COVID infections spread with record speed right after the Sylvester night came to an end. As a result, they will have now to remain closed for who knows how long. The previously set timeline for a progressive re-opening of the nightlife industry from the 15th January onwards is off the table.
The adjustments to the “Test & Go” and “Sandbox” programs have destroyed any hope for most hotels in Thailand to see any kind of recovery of the international business segment. It’s just too complicated and too expensive now to be coming to Thailand. Only Phuket is still an option, and Samui, Krabi and Phang Nga areas are being discussed. As a result, the first quarter of 2022 will need to, once again, remain completely reliant on domestic business for everyone else, including Bangkok and Pattaya.
But it’s not all doom and gloom. Back in 2021 I had to close my hotel on the 8th of January for a total of almost 3 months. Now, I don’t see this danger yet in 2022. While here in Pattaya we have to focus on domestic business demand, the situation is less dramatic than it was a year ago.
With 99% of our guests and 100% of my teams being fully vaccinated and still no alarm bells from neighboring hospitals, there is no sense of panic that would keep travelers completely away. Furthermore, while there remains a lack of data on the actual danger of Omicron, it seems that the number of hospitalizations and death cases remains very low, despite a faster and wider spread across the country.
This is encouraging. And it will most likely allow us to continue running our business, as we can still collect enough bookings to cover at least some of our expenses. Certainly not enough to make a profit though.
Looking beyond the hospitality segment, there is more reason to be hopeful and this is being reflected in the stock market. The market is recovering its losses from 2020 and on track to march towards its previous highs. I am fairly certain that it will go higher from here onwards.
Similar with other countries, there has been a good cash flow towards companies that focus on infrastructure and sustainability. For Thailand specifically though, I see stocks in the agricultural and food production sector being strongly represented within the group of companies of rising shares. Also most parts of the financial sector have recovered nicely over the last 2 months.
Looking broadly at the situation, I would say that things are still holding up nicely. The hospitality segment is of course suffering immensely, but every other sector seems to have adapted well enough.
We should see by the end of January a first trove of announcements and reports coming in. Business reports for 2021, and adjusted forecasts for the first quarter of 2022. The government is expected to communicate more measures to stimulate the economy by the middle of the month, so I guess that most companies will wait with updates until this part has been cleared up.
The best indicator will be of course the next announcement of dividend payments, which start from March onwards for most REITs, and April and May marking two out of the three most dividend-heavy months of the year for non-REIT companies. The third one is September, but that’s still too far down the road to talk about.
Investing in Space
In the meantime I have found another interesting investment option in Europe. A newly founded trust, that is focusing on space and space technology related investments.
I am still reading through the prospects and documents, but I am fairly certain that tomorrow I will sell a tiny part of my Apple shares and invest that money in this trust. I know it’s a bold call, but Apple is at an all time high and I think taking out some profits and putting it into another exciting opportunity is worth a shot. I will publish more details on this exciting new company tomorrow or the day after. Stay tuned.