Fairtex Sports Club and Hotel Pattaya learned the hard way there’s no such thing as easy money after it welcomed a Chinese investor with open arms during good times only to see the company pull out during the coronavirus pandemic.
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Like many Thai firms, Fairtex was only too happy to have a large corporate Chinese investor back up with funds and start a joint hotel venture in 2018. China had become Thailand’s golden goose and mainland tourists eventually comprised one in four foreign travelers.
Then the pandemic hit.
Managing Director Prem Busarakamwong met with the media Sept. 3 to recount Fairtex’s boom-to-bust tale with an unnamed Chinese investor he is now pursuing legal action against.
He said Fairtex was approached in 2018 to form a Thai-majority company to operate a three-story, 54-room hotel. He said the company is big and had offices in Bangkok and Chiang Mai, and Fairtex was so eager to get their investment it didn’t even require a deposit on the seven-year, seven-month rental deal.
For about two years, everything went smoothly and the company paid its 1-million-baht monthly rent on time. Then the coronavirus emerged in Wuhan, Beijing locked down the borders, and suddenly there were no Chinese guests in the Chinese-managed Fairtex hotel.
Prem said the firm was given lower rent, but in February, the Chinese firm stopped paying, closed the hotel and laid off the staff. Prem spent months trying to contact management, eventually sending lawyers to Bangkok where management simply referred them to the main office overseas.
Fairtex has since filed a police complaint, but there is little that can be done.
Prem tried to paint the problem as a specific warning to all hospitality and tourism industry companies to beware all foreign – particularly Chinese – investors, but there are plenty of examples of deadbeat Thai investors and trustworthy foreigners.
Prem’s story should, in fact, be taken as a cautionary tale about voracity and a lack of due diligence.