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Mischievous guests jump into the unknown at Laguna Beach Resort

Phuket Resorts Fear Investors May Seize the Moment and Sack Staff

Tuesday, May 1, 2012
PHUKET: Unions and workers in Phuket resorts are fearful that more investors may buy Phuket properties with a view to renovating the resorts and laying off staff to start all over again.

Many resorts that opened in the '90s on Phuket are likely to be being eyed with a view to remaking them for fresh starts in a new century.

Vijit Dasantad, President of the Phuket Federation of Hotels and Service Labor, said that the new owner at Laguna Beach Resort at Laguna Phuket has followed the law in making its 350 staff redundant and paying all financial entitlements.

''The resort management has now even said that the old staff may reapply for jobs at the resort, after the renovations,'' he said.

''But that is not the same as keeping workers on while a resort is renovated, which is what most other Phuket resorts have chosen to do in these circumstances.''

An increasing number of resorts on Phuket of the vintage of Laguna Beach Resort are falling due for renovation, so an increasing number of sales and refurbishments is expected over the next few years.

Staff at several large branded Phuket resorts have already found themselves unsettled by sales and uncertainty so far this year.

Ownership of a Phuket resort carried with it moral obligations and well as financial responsibilities, Khun Vijit said.

''The workers at Laguna Beach have in many cases been there for a long time, so the dependants in their families are also affected.

''It's sad to see a resort deciding to part company with its entire loyal trained staff.''

Khun Vijit said that many travellers were now looking at resorts to see whether they lived up to high moral standards as well as material ones.

''I had a call recently from a Swedish agency, asking me for the names of resorts on Phuket that protect the rights of their staff,'' he said.

''People these days are more anxious than ever before about the welfare of employees at the resorts where they stay.''

One of seven resorts in the Laguna Phuket lagoon sanctuary, Laguna Beach Resort was sold last year to Singapore-based Real Estate Equity Partners (Recap), an Asian-focused real estate equity fund.

The resort opened in 1992, the second hotel to be built at Laguna Phuket. Although other resorts at the Laguna complex have undergone extensive renovations, staff have usually been retained.

Recap managing director Suchad Chiaranussati has been quoted as saying that Recap specialises in seeking out distressed or poorly managed properties and reconditioning and operating these properties to achieve superior returns.

Recap is backed by a group of 15 institutional investors, most from the US. Around 75 percent of the total funds are from the US, 10 percent from Europe and 15 percent from Singapore-based investor City Developments Limited (CDL), he told the Bangkok Post in March.

Laguna Beach Resort is due to close on May 8 and reopen in December, after renovations.

Khun Vijit said there were about 3000 job vacancies in the resort business on Phuket at present. ''The 300 baht minimum wage really doesn't change anything in resorts,'' he said.

''People are unlikely to move to Phuket because the cost of living is so much higher than in other provinces. Phang Nga, for example, is a less pressured place to work and a bowl of noodles that costs 40 baht everywhere on Phuket still costs only 20 baht there.''

People also had trouble moving around on Phuket because there was no proper public transport, he said. ''Phuket has developed so rapidly that infrastructure has been left behind.

''Everybody loves Phuket. It would be great if they loved it in the right way, rather than the wrong way.''

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The biggest problem is that it is not understood that the union should be a tool to enhance employee welfare, fairness, service, profitability etc.

Right now the union leaders use the union as a tool to fight, disagree and make life difficult for management and owners. (Exactly as in Thai politics where a opposition will never agree with the government and vice versa)

It is worth to be mentioned that most... if not all ... unionized companies in Thailand suffer in one way or another and/or loose out slowly but surly to its competitors (State Railway, Thai International, Hotels, etc)

Yes, it is very sad to so many employees are without job now. However, I am 100% confident that about 70% of employees at Laguna Beach will be rehired.

If people at the Phuket Federation of Hotels and Service Labor are concerned about the welfare of Thai workers, they might better focus and look at the hundreds if not thousands of businesses in Phuket which not even provide social security, pay below minimum wage etc. rather than picking on businesses which offer some of the the best salaries, benefits and facilities in Thailand for its workers.

Posted by Mr. K on May 1, 2012 18:40

Editor Comment:

Surely the issue is about whether workers at resorts are retained or not by a new owner? Seems simple.

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20 baht a bowl of noodles in Phang Nga? Not in Takuapa. Not in Khaolak. Not in Phang Nga town.
At least 30-35 Baht. And that was in 2010.

Posted by Lena on May 1, 2012 19:05

Editor Comment:

Perhaps you got ripped off, Lena? Maybe the restaurants closer to the Burmese camps are more reasonable.

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Ownership of a Phuket resort carried with it moral obligations and well as financial responsibilities, Khun Vijit said.

''The workers at Laguna Beach have in many cases been there for a long time, so the dependants in their families are also affected.

''It's sad to see a resort deciding to part company with its entire loyal trained staff.''

Well said Khun Vijit. However, as those of us, who are well travelled & worked, very well know, the world is not a fair place at present.

I remember sitting at an oil company seminar many years back (as far back as the early 80's in fact) where staff challenged management on pending redundancies. The reply we got from the 'hired gun' on the board, was "We pay for work, not for loyalty!"

That just about sums up the world at present.

Posted by Logic on May 1, 2012 20:49

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Unions will always fight management to avoid layoffs. It happens all around the world. From a financial standpoint, the amount of severance due to these employees by Thai labour law (not sure if the employees / unions worked out a better deal) is as follows:
1 year service - 90 days pay
3 years - 180 days
6 years - 240 days
10+ years - 300 days
(Labour unions have recently been lobbying the government to double these amounts)

In the US, I worked for a MNC that paid 2 days severance for every year of service. We do have Unemployement Insurance though that will give you about 1/2 salary (taxable) for around 6 months. Don't quote me since I have paid into this fund for 30 years, but never collected.

So the hotel staff will have something to fall back on during the renovation and the new owner sheds this liability and starts fresh.

With the Thai unemployment rate at 0.4% (Dec/2011), finding a new job shouldn't be a problem.

Posted by GiantFan on May 2, 2012 09:54

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Obviously some of the staff will move away, or find alternative employment, but I suspect the majority will reapply (successfully) for their old jobs. The new owners will have done their sums very carefully to ensure this ploy works out financially in their favor. After all, the last thing they want is to be training staff at the start of a busy new season.

Posted by agogohome on May 3, 2012 08:41

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I just came back from Chiang Mai after 1 week vacation there. Take a look at this:

+ Accomodation for 1 week (serviced apartment)
+ Motorbike for 1 week
+ Muay Thai Training for 1 week (6h/day)
+ Food/Drinks for 1 week
---------------------------
= 8.500,- THB TOTAL

And I wasnt really taking care about living on a budget.

Posted by Jakub P on November 26, 2012 14:29


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