Panthera Group, Thailand’s top operator of pubs, clubs and restaurants, is using its leadership position to ensure the country’s nightlife industry survives the coronavirus pandemic by slashing rents, offering soft loans to struggling rivals and setting an example other landlords can follow.
Panthera, owner of nightclubs and pubs throughout Bangkok Phuket, Koh Samui and Pattaya, has dropped rents by up to 67 percent for the past year to keep tenants afloat and ensure they’ll have the resources to reopen once the coronavirus pandemic ends.
Panthera Group co-founder Paul Hayward said many operators initially received rent discounts in 2020, but later were reinstated at full price even though bars remained closed.
“We were finding that the Achilles heel for many bar owners were landlords who, at the time, may not have been as sympathetic enough to their tenants’ needs and perhaps were not fully understanding that many of their tenants were on the verge of bankruptcy, which ends up being a lose-lose situation for both landlord and tenant,” Hayward said.
“While discounts of 50 percent were very reasonable considering the landlords’ needs, but we felt that, by increasing our rents by two-thirds, we could get a few more tenants over the line and it seems to have worked,”
For those who rent reductions weren’t enough, Panthera supplied soft loans. He called it “life support money”, but the life support was for more than just the venue, it was for Bangkok’s entertainment and hospitality sectors as a whole.
“If outlets go out of business now, it will impact the entire area negatively when the pandemic ends,” Hayward said. “Bangkok needs quality nightlife choices. We don’t want other cities in Asia offering a stronger product.”
Hayward said the loans were “enough so owners could honor their rental commitments and ensure they can keep their creditors at bay”.
With Thailand planning to reopen to unrestricted foreign tourism by mid-October, Hayward believes restrictions on the nightlife sector will be relaxed soon.
“It’s becoming increasingly likely nightclubs will open before October, with restrictions,” Hayward wrote June 22 on his Facebook page. “I’m confident they will relax alcohol (sales prohibitions) soon and, if the country remains stable, will allow places to run until midnight.”
When bars do reopen, however, it won’t be business as usual for a while, Hayward said.
“I believe landlords will eventually start to become more pragmatic. Raising rents in line with tenants’ revenue could be an option that would work for both parties until business returns to normal, pre-pandemic levels,” he said.
He believes that, by the first quarter of 2022, Bangkok will have recovered 75 percent of its pre-pandemic nightlife revenue and high season 2022 revenue finally growing above 2019’s level.
Hayward is optimistic the “Phuket sandbox” project that began July 1 will successfully jumpstart foreign tourism.
“When people start traveling, posting photos and telling everyone what an amazing time they’re having in Thailand it will snowball,” Haywards predicted. “By the middle of September, we will see a reasonable amount of tourists and hotels will be doing well. Then should see those Phuket tourists spilling into other provinces.”