Elite card taps real estate

BANGKOK, 3 April 2013: Tourism Authority of Thailand says it will launch an Elite Card package that will tap real estate investment opportunities for travellers, who are looking for long-stay options.

TAT governor and Thailand Privilege Card Company president, Suraphon Svetasreni, said the company’s board agreed  the Elite card should target investors who are looking for real estate  buys in Thailand.

“The scheme will tap international travellers and investors who interested in real estate particularly condominiums, but we will need to study details carefully to ensure the package is lawful.”

He added: “Real estate business is a strong market in Thailand particularly for the condominium sector.”

The Elite card will be re-launched after the Songkran festival. It will require TAT to appoint sale teams and also train executives in overseas offices to sell the card. It is expects to sell at least 700 cards against its first-year target of 1,300 cards.

Last November, the Thai Cabinet approved a plan to revive the Thailand Elite Card after years of losses and a failure to reach its membership targets.

TAT has mapped out an ambitious plan to recruit 10,000 new members. It will find the task almost impossible to achieve due to the TAT work culture that is not geared to hard sales activities required to meet the overly ambitious targets.

The Cabinet’s  approval allows the card operator to spend Bt100 million from the remaining registered capital of Thailand Privilege Card Co to recruit a manager, personnel and run the company.

As the sole owner of TPC, TAT  believes it can gain 10,000 new members in 10 years, with each paying a one-time membership fee of Bt2 million plus an annual fee of Bt20,000. Membership is valid for 20 years.

In private sector circles, the figures are ridiculed as grossly over optimistic. Critics ask whether there are enough foreign travellers with Bt2 million to spare to spend on a card that has yet to identify its real commercial value. They will also be wary that if the sales campaign is not successful the government will ultimately close the company despite promises to the contrary. TAT faces enormous challenges considering the global economic situation and the company’s legacy of failure. TPC currently has just 2,562 members.

In theory, TAT plans to recruit 1,300 members in 2013 and that figure has now been revised to 700. It is supposed to recruit 1,200 members in 2014, 1,100 members in 2015 and then 1,000 members in the fourth to seventh years, 900 members in the eighth year, 800 members in the ninth year and 700 members in the 10th final year.

The authority talks about earning Bt2,016 million after the first year, but the loss remains at Bt117 million due to the accumulated deficit of Bt1,284 million.

TPC should make a Bt242 million profit in 2014 and pay off its accumulated deficit by 2017. In 2033, when the Elite Card turns 20 years, TPC should have Bt2,280 million in cash or a profit of Bt1,095 million.

To reach the first year member target of 1,300 cardholders, TAT said earlier it would sell in foreign markets:

• 481 members from East Asia mainly from China (236) and Japan (97);

• 436 members from Europe/Africa/Middle East –160 from Russia and Commonwealth of Independent States (CIS), 49 each from the United Kingdom, Scandinavian, Germany, Italy and South Africa, 40 from France and 80 from the Middle East;

• 303 from ASEAN/South Asia and Pacific–100 from India, 41 each from Singapore, Malaysia, and Indonesia, and 40 each from Vietnam and Australia;

• 80 from the Americas.

There are additional card benefits related to visas whether not clear that offering a five-year visa with stays of up to 12 months and multiple entries.

The cardholders can also meet Thailand’s chief executives two times a year and will receive assistance from TAT officials around the world.

It hopes to negotiate with related associations for discounts on airline fares, duty free shopping, medical fees, and legal counsel.

The card project was the brainchild of former prime minister, Thaksin Shinawatra. It was launched in 2003 with a target of 1 million members. It failed running up debts and almost exhausting its capital forcing repeated efforts to rework the formula and even suggestions that it should be closed.

Sourced: ttrweekly