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Business Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
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colombo Offline
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Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
Hi guys

My name is Alberto, from Spain(31 y/o). Have been following the forum (specially for ideas on Asian girls when travelling...) for the last 2 years and Im starting to collaborate now...

I have worked as an international business developer during the last years, as an expatriate, in Saudi Arabia, India and China..., currently I have a company dedicated to animal feed for Saudi Arabia.Rant I currently have two business ideas in mind looking to study & (possibly) implement with several partners (friends, work colleagues, RooshV members, anyone reliable...) in order to diversify the risks. The final aim is to relocate myself to SEA:

A) Import handicrafts from SEA:
I'm visiting Indonesia this coming July (Surabaya & Yogyakarta) to check possible partners or reliable suppliers....anybody is there or have contacts/info about how the market works? I'm also interested in Thailand or Vietnam to say some.

B) Opening a hostel in Myanmar, Thailand or Indonesia. I have been to these places already. In the case f Thailand, its the last option since there are tons and tons and tons of hostels.

Im more interested in Indonesia and Myanmar but I don't have any experience in the hospitality sector (the idea is just to rent a flat, beds, etc...something very basic for backpackers). The first two barriers I can figure are:

- Corruption (bribing officials to open and keep open the business). In the case of Myanmar I have heard that its corrupt as hell and nowadays the real estate is crazy expensive.
- Necessity of a local partner with a high % share of the business. Maybe this issue can be overcome by using figurehead/front man, some Law Firms in emerging markets offer this service in exchange of an annual fee.

Any ideas or recommendations??? Open to any suggestion, PM are also welcomeBadger
(This post was last modified: 06-05-2016 06:39 AM by colombo.)
06-05-2016 06:01 AM
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Phoenix Offline
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RE: Import/export busines SEA and opening a Hostel: Indonesia-Thailand-Etc)
(06-05-2016 06:01 AM)colombo Wrote:  - Corruption (bribing officials to open and keep open the business). In the case of Myanmar I have heard that its corrupt as hell and nowadays the real estate is crazy expensive.
- Necessity of a local partner with a high % share of the business. Maybe this issue can be overcome by using figurehead/front man, some Law Firms in emerging markets offer this service in exchange of an annual fee.

Any ideas or recommendations??? Open to any suggestion, PM are also welcomeBadger

I don't think the corruption aspect is something to worry about that much. It's not that different to a western country really. The government is just a protection racket, you pay your protection money to keep them off your back. The only difference is that in a western country, the prices are more consistent and transparent.

One guy I met in an unnamed SEA city said he runs several businesses, and he basically has a dedicated "bribe accountant", who's job it is to bribe the correct people the correct amounts to stop roadblocks to business appearing. The only question is "how much" -- to be worse than a western country you've basically got to lose more than 50% of your profits, otherwise it's effectively the same situation just with a bit less certainty.

So I'd say don't worry about it, just try to get access to information about bribe prices somehow when you're calculating business viability. People I've met who visited Myanmar said it's very untouristy, so it could well be the next frontier.
06-05-2016 06:23 AM
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
I took a shot at hostel ownership, and it was a disaster. Not in the locations mentioned, but in Hawaii, specifically Waikiki. Had it not been for the real estate side of it, I would have lost huge.

The three main problems were:

1) The building had been terribly maintained over the years. We had to refund people constantly for bedbugs and roaches, plumbing issues, power outages etc. A few people got injured on slippery stairs, but they were internationals and never heard from again.

2) Employees. Most hostels I researched theemployees were all residents there as well. Thats how mine was when I took over. These people cared more about their living situation then my profits. That's natural. The problem was that the individuals had been funding the rest of their lives by either stealing directly from the hostel, or the guests. If they weren't doing that the were selling drugs, or on disability. I just couldn't make it work.

3) Guests. Its not just svelte 19 year old girls that stay in these places. Drunk australians love them. This mainly only lead to more maintenance issues when they broke shit. You also get the older dirt broke travelers, or just homeless people that made fake plane tickets at the library computer. Those were the worst. They chase out all the decent customers. The innkeeper laws and the landlord tenant laws are different, but in Hawaii, if someone is on disability and they've stayed in the same place for two weeks you have to formally evict them.

I did wind up getting some young foreign ass, but overall it was a nightmare.

Aloha!
06-05-2016 08:45 PM
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
(06-05-2016 06:01 AM)colombo Wrote:  Im more interested in Indonesia and Myanmar but I don't have any experience in the hospitality sector (the idea is just to rent a flat, beds, etc...something very basic for backpackers). The first two barriers I can figure are:

Bars, restaurants, and hostels rarely work for guys without experience. Consider working as a hostel manager first. Something like managing a hostel for 6 months and then managing a different hostel for another 6 months.
06-05-2016 09:45 PM
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RatInTheWoods Offline
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
I know a lot of dudes who do alright with a bar, guesthouse and sideline renting bikes etc in Thailand, but you have to want to live the lifestyle... Chatting to borings, drinking your profits and hooking up with the bar girls etc

Not big money, but a lifestyle choice.
06-05-2016 11:47 PM
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ovloV Offline
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
(06-05-2016 09:45 PM)birthday cat Wrote:  
(06-05-2016 06:01 AM)colombo Wrote:  Im more interested in Indonesia and Myanmar but I don't have any experience in the hospitality sector (the idea is just to rent a flat, beds, etc...something very basic for backpackers). The first two barriers I can figure are:

Bars, restaurants, and hostels rarely work for guys without experience. Consider working as a hostel manager first. Something like managing a hostel for 6 months and then managing a different hostel for another 6 months.

The one difference here is that the OP could be catering to foreigners at a bar or resteraunt, in which case they will come regardless of price for a taste of home. Over charing foreigners in Asia is a fantastic business model.
06-06-2016 12:44 AM
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samsamsam Offline
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
Kona,

Do you mind hashing out some numbers for us? Just super curious. Met a guy once who was planning on doing this in Europe.

Not wishing this on you, but did it end up being a financial loss?

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06-06-2016 02:47 AM
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RagnarLothbrok Offline
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
(06-05-2016 08:45 PM)Kona Wrote:  I took a shot at hostel ownership, and it was a disaster. Not in the locations mentioned, but in Hawaii, specifically Waikiki. Had it not been for the real estate side of it, I would have lost huge.

The three main problems were:

1) The building had been terribly maintained over the years. We had to refund people constantly for bedbugs and roaches, plumbing issues, power outages etc. A few people got injured on slippery stairs, but they were internationals and never heard from again.

2) Employees. Most hostels I researched theemployees were all residents there as well. Thats how mine was when I took over. These people cared more about their living situation then my profits. That's natural. The problem was that the individuals had been funding the rest of their lives by either stealing directly from the hostel, or the guests. If they weren't doing that the were selling drugs, or on disability. I just couldn't make it work.

3) Guests. Its not just svelte 19 year old girls that stay in these places. Drunk australians love them. This mainly only lead to more maintenance issues when they broke shit. You also get the older dirt broke travelers, or just homeless people that made fake plane tickets at the library computer. Those were the worst. They chase out all the decent customers. The innkeeper laws and the landlord tenant laws are different, but in Hawaii, if someone is on disability and they've stayed in the same place for two weeks you have to formally evict them.

I did wind up getting some young foreign ass, but overall it was a nightmare.

Aloha!

I guess points 2 and 3 would not be such a big problem if you have a hostel in Myanmar, like the OP is thinking about. The country doesn't attract the party-type backpacker (at least not yet) and the locals are very traditional and most of them are buddhists. I doubt it would be difficult to find honest hostel staff.

The problem I would have with Myanmar is the quality of life itself. I wouldn't want to live there longer than a month.
(This post was last modified: 06-06-2016 03:25 AM by RagnarLothbrok.)
06-06-2016 03:23 AM
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RichieP Offline
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
^Nice thought, but Buddhist doesn't necessarily mean honest staff. Thailand case in point. Dishonest/unreliable entry-level employees are par for the course in SE Asia unfortunately, it's widely prevalent.

Personally I think this kind of biz idea could be super difficult just from all the hassle and bullshit from locals. It's not just about bribing officials - think neighbours getting jealous, wanting to take a piece, to blackmail you, etc etc.

Could do it if you partnered with someone powerful/connected you were SURE would not screw you over I guess.

Import/export is definitely a nicer option because then you're just in the country to buy things.

If you do go hostel route, I would def suggest finding westerners who have been successful with it in this or similar countries (thailand vietnam indonesia etc) and pick their brains regarding the success factors and pitfalls.
(This post was last modified: 06-06-2016 08:23 AM by RichieP.)
06-06-2016 08:19 AM
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
(06-06-2016 12:44 AM)ovloV Wrote:  
(06-05-2016 09:45 PM)birthday cat Wrote:  
(06-05-2016 06:01 AM)colombo Wrote:  Im more interested in Indonesia and Myanmar but I don't have any experience in the hospitality sector (the idea is just to rent a flat, beds, etc...something very basic for backpackers). The first two barriers I can figure are:

Bars, restaurants, and hostels rarely work for guys without experience. Consider working as a hostel manager first. Something like managing a hostel for 6 months and then managing a different hostel for another 6 months.

The one difference here is that the OP could be catering to foreigners at a bar or resteraunt, in which case they will come regardless of price for a taste of home. Over charing foreigners in Asia is a fantastic business model.
He still has to market and advertise the business so those potential customers are aware that the business exists. He still has to operate and manage the bar/restaurant/hostel when those customers show up. He still has to employ unskilled workers from a different culture. He has no experience doing these things.

Talk to 10 guys who have owned these types of businesses. Most of them will regret owning the business. The ones who were successful will probably say the same thing I'm saying - these businesses are rarely successful if the owner has no experience.

(06-06-2016 08:19 AM)RichieP Wrote:  If you do go hostel route, I would def suggest finding westerners who have been successful with it in this or similar countries (thailand vietnam indonesia etc) and pick their brains regarding the success factors and pitfalls.
I talked with some guys that were very successful with multiple hostels. Those conversations reminded me why I got away from retail/hospitality businesses a long time ago.

If someone absolutely insists on owning a hostel then my suggestion is to look for struggling hostels that are in an area with successful hostels, i.e. the hostel isn't successful because of absentee or incompetent ownership. Make low-ball offers on purchasing those hostels. Your offer should probably be around the value of their assets such as furniture, equipment, liquor, etc. Keep in mind that the furniture and equipment is used therefore it is worth a small fraction of retail price. It will take many offers before you find someone that is willing to sell their shitty business for a reasonable price but you will learn a lot in that process.
(This post was last modified: 06-06-2016 11:45 AM by birthday cat.)
06-06-2016 11:00 AM
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
(06-06-2016 08:19 AM)RichieP Wrote:  ^Nice thought, but Buddhist doesn't necessarily mean honest staff. Thailand case in point. Dishonest/unreliable entry-level employees are par for the course in SE Asia unfortunately, it's widely prevalent.

I still think it is different in Myanmar. It is much more traditional than Thailand and there are less people trying to rip you off or looking for their own benefit when dealing with tourists. What's more, the economy there is less developed and unemployment rate is higher than in the rest of Indochina. Per capita income is also much lower than in Thailand, whereas hostel prices are higher in Myanmar, meaning that in theory you would be able to pay your employees an above average wage (unless you pay a lot more tax and other expenses I am not aware of yet). I don't think people there would risk losing a well paid job by stealing from their boss or customers.

I think there is huge potential in owning a hostel in Myanmar, BUT you would have to invest in a really good building. Most hostels I know there are shitty 10$ a night hostels with cold showers, no AC and cockroaches in the bathroom. But from my experience, Myanmar also draws a lot of older tourits who visit the country because of it's culture. Myanmar is about nature, culture and history, not about getting drunk and hooking up with other travelers. Those people would definitely be willing to pay more money for better accomodation. You could easily charge them 40-50$ per night for a private room if you had a clean, modern place with a certain level of comfort. In fact, really good hostels (no matter what price range they are in) are very rare in Myanmar since the country is still opening up to tourism and most locals who are running hostels have no idea how to do so because they have never travelled themselves.

To sum up, the pros about having a hostel in Myanmar are:
  • not much competition. You could quickly become the best hostel in town if you know what you are doing. At the moment there are only 23 properties listed on hostelworld in Yangon, the biggest city by population and only 3 properties (!!!) in Bagan, the most touristic site in Myanmar (the one with the highest rating is run by an Italian btw and makes for a good example of what is possible. This is how I would do it).
  • prices for hotels and hostels in Myanmar are generally higher than in Thailand (the hostel linked above charges 17$ for a bed in a dorm! Those are European prices in the third world and people are willing to pay that) whereas employees are cheaper I suppose (you would have to look into that point some more). This means more profit for you
  • there is a big market for middle-class travelers willing to pay more money for better value, not only accomation-wise but also for good organised tours. And even the budget-travelers are willing to spend more money on food, drinks, tours. etc. because there is simply no nightlife in most parts of the country they could spend their money on.
  • Myanmar is THE booming country when it comes to tourism. Just look at page 14 of this document: https://www.wttc.org/-/media/files/repor...ar2015.pdf
  • More and more tourists are coming to Myanmar every year. According to Worldbank data, the country went from 816,000 visitors in 2011 to 3,081,000 in 2014 and this is just the beginning.
(This post was last modified: 06-06-2016 12:22 PM by RagnarLothbrok.)
06-06-2016 12:18 PM
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
Relevant to this thread, is: https://www.rooshvforum.com/thread-50098.html

Bar or hostel are I'd say basically the same kind of investment abroad (same amount of money and quantity of paperwork involved)...
(This post was last modified: 06-06-2016 12:57 PM by Going strong.)
06-06-2016 12:54 PM
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
(06-06-2016 12:54 PM)Going strong Wrote:  Relevant to this thread, is: https://www.rooshvforum.com/thread-50098.html

Bar or hostel are I'd say basically the same kind of investment abroad (same amount of money and quantity of paperwork involved)...

The difference is that a hostel is open 24x7.

These aren't the businesses for me anymore but I would always choose owning a bar over a restaurant or hostel.
06-06-2016 01:19 PM
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
Theres a saying among farangs in Thailand. One way to make a small fortune in Thailand is to start off with a big one.

The best advise i can give you regarding business is to stay away from the penny pincher crowd. Do not open a hostel unless you have very extensive experience in the hospitality business. İt will be like starting the game from hard mode . Youll have guests who paid 10 bucks for the room but act like they paid 100+. You dont want this crowd trust me.
(This post was last modified: 06-06-2016 01:37 PM by BlackHat.)
06-06-2016 01:27 PM
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
(06-06-2016 02:47 AM)samsamsam Wrote:  Do you mind hashing out some numbers for us?

The building had 15 rentable rooms, each with 4 bunk beds and a small kitchen in the front. Then a bedroom with a separate locked door in the back. That was called the semiprivate. All shared one bathroom.

I charged 33 a night for a bunk bed and 59 a night for the semi private.

There were two additional units on the top floor. One had eight bunk beds and the other had two semi privates. That's where the employees stayed. Innkeeper laws require you to have 24 hour desk coverage if you offer over 24 rentals, and each bunk bed counted as a separate rental.

(06-06-2016 02:47 AM)samsamsam Wrote:  Not wishing this on you, but did it end up being a financial loss?

On the business side I took a loss. I made up for it when I sold the building but not by much.

The rent, if full, could have maxed out at about 2600 a day. That never happened. I tried to renovate floor by floor. I would wind up refunding people for all types of crap every day.

The electric and water were killers.

A developer bought the place and is currently renting it to remaining long term people. When they leave he's just going to do some touch ups and drop the innkeeper license. That's what I should have done and just had 17 rental units and not had to deal with all the bullshit.

Aloha!
06-06-2016 01:38 PM
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
Yeah just that thought of dozens of cheapskate customers every day combined with SE Asian issues of reliability and corruption seems like about the most stressful small business possible!

Take your point Ragnarok that there is massive opportunity there though. But maybe that's best capitalized by an experienced/successful hostel owner.
(This post was last modified: 06-06-2016 03:42 PM by RichieP.)
06-06-2016 03:41 PM
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
I have quite a bit of experience in the hospitality industry and concur with Richie P, Kona and the now banned Black Hat. I'm reticent to comment on other SEA countries, but my understanding is that some of these countries pose even greater risks than Thailand for a foreigner.

As for Thailand, it's a risky place to open any hospitality business, including a hostel. Even though I haven't owned one here, I have done some due diligence and briefly worked in hotel management to better understand the dynamics specific to this country.

Some food for thought:

1. Profit
What is your idea of reasonable profit for the hard work you will undoubtedly put in to make you hostel successful? Will you be happy with $400 - $600 profit per month?

Many locals are ok with profits as low as $300 per month, because that is what they may make in a service or manual labour job anyway and by owning their own business they don't have a boss over their heads. Also not uncommon for a Thai to keep their day job and run the hostel/hotel or restaurant/bar for extra income. Why would you care what a local earns or is willing earn? You should care because your competitor has a very low profit threshold and that leads to...

2. Oversaturation
As a consumer, anyone living in Thailand is spoiled for choice when it comes to accommodation, eating/dining out and hitting up a bar for drinks. As an owner you will need to compete on price with the countless hostels/hotels that keep popping up every day.

3. Staffing/Theft
I always knew this was a problem in Thailand, but never realized how bad it was until I actually worked in management at a hotel. It is actually very difficult to find even marginally competent staff. That's why you see many properties over staff and I know one foreign manager that will fire staff on the spot if they don't adhere to a strict customer service regimen. His theory, if you don't stay on top or even over the top with the local staff the level of service can deteriorate rapidly. Cash is king in developing SEA and unless you are somehow able to run the place by yourself, it may be hard to stop the staff skimming off the top.

4. Scams/Corrupt Practices
You will probably have to pay the local police a 'fee' every month and although in many cases they don't try to bleed you dry, I know more than a few businesses that had to close down because they couldn't afford the payments.

The issue of foreign ownership of a business is an area that would need an entire data sheet to cover, but suffice to say that at the very least it will cost you a not insignificant amount of money to keep everything legal or the authorities off your back.

Scams for staff to make extra cash off of the business or the guests are very common and in many cases the guest/customer will not realize that they have overpaid to facilitate a commission. Running a parallel business or businesses is one of many scams that the staff will try to plot out while they are supposed to be taking care of the guests and many of these may be difficult to detect by a foreign owner.

While there are foreigners who are successful, many more tread water, and the vast majority end up in failure.
06-07-2016 02:37 AM
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RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
(06-06-2016 12:18 PM)RagnarLothbrok Wrote:  To sum up, the pros about having a hostel in Myanmar are:
  • not much competition. You could quickly become the best hostel in town if you know what you are doing. At the moment there are only 23 properties listed on hostelworld in Yangon, the biggest city by population and only 3 properties (!!!) in Bagan, the most touristic site in Myanmar (the one with the highest rating is run by an Italian btw and makes for a good example of what is possible. This is how I would do it).
  • prices for hotels and hostels in Myanmar are generally higher than in Thailand (the hostel linked above charges 17$ for a bed in a dorm! Those are European prices in the third world and people are willing to pay that) whereas employees are cheaper I suppose (you would have to look into that point some more). This means more profit for you
  • there is a big market for middle-class travelers willing to pay more money for better value, not only accomation-wise but also for good organised tours. And even the budget-travelers are willing to spend more money on food, drinks, tours. etc. because there is simply no nightlife in most parts of the country they could spend their money on.
  • Myanmar is THE booming country when it comes to tourism. Just look at page 14 of this document: https://www.wttc.org/-/media/files/repor...ar2015.pdf
  • More and more tourists are coming to Myanmar every year. According to Worldbank data, the country went from 816,000 visitors in 2011 to 3,081,000 in 2014 and this is just the beginning.

I know one of the managers at Ostello Bello and I've been staying there myself. Idk how much money the owners there are doing, but it should be quite good. They have basically no competition at all in Bagan. There is a lot of hotels there, but they are run my Burmese who don't see the needs of the foreigner tourists/backpacker crew. That's why Ostello Bello got such great review even though it's only a year or two old. They do stuff like sunrise/sunset tour, Burmese language learning class, game night, and other types of activities. It's very overpriced for being a hostel but the foreigners don't mind paying a service if it's worth it. I'd say having good review is the most important.

They would also employee backpackars very cheap. If they do some work they'd get a bed, some food and some pocket money. Not a bad deal if you are in a place you enjoy staying. I know they are trying to expand to other locations in Burma.

Regarding staff, except for hiring backpackars, I think it would be quite easy to find staff to do cleaning and cooking, but professional staff who can deal with costumers in good manner would be more difficult.

There is for sure money to be made here. However I wouldn't do it myself because as Ragnar said, I wouldn't want to stay in Burma for too long. It's fucking boring country if you enjoy some excitement in your life.
06-07-2016 07:36 PM
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Post: #19
RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
Myanmar is interesting, and there is no doubt that right now, anyone operating a hostel/hotel competently is making money. The last time I inquired three years ago, the minimum investment was $50,000 U.S and unlike Thailand you could own the business outright. If a guy set up a business, gained a better understanding of how things operate, then scaled up after a year or two, wealth accumulation would alleviate any misgivings about having to live there. It could definitely be a country where we will look back in X years and say, why didn't I go there to set up shop?
06-07-2016 11:17 PM
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Satoshi Offline
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Post: #20
RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
Yep the opportunity is there now and for anyone who is willing to put in the time and effort and especially dedicate a few years to live in Myanmar is could definitely give a nice profit, however I don't think anyone is getting rich on $20 bunk beds.
06-08-2016 11:40 AM
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Kdog Offline
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Post: #21
RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
Myanmar is going to be very interesting in the next decade. Tons of opportunities.
06-11-2016 10:30 AM
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colombo Offline
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Post: #22
RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
(06-07-2016 02:37 AM)Kamaki4 Wrote:  I have quite a bit of experience in the hospitality industry and concur with Richie P, Kona and the now banned Black Hat. I'm reticent to comment on other SEA countries, but my understanding is that some of these countries pose even greater risks than Thailand for a foreigner.

As for Thailand, it's a risky place to open any hospitality business, including a hostel. Even though I haven't owned one here, I have done some due diligence and briefly worked in hotel management to better understand the dynamics specific to this country.

Some food for thought:

1. Profit
What is your idea of reasonable profit for the hard work you will undoubtedly put in to make you hostel successful? Will you be happy with $400 - $600 profit per month?

Many locals are ok with profits as low as $300 per month, because that is what they may make in a service or manual labour job anyway and by owning their own business they don't have a boss over their heads. Also not uncommon for a Thai to keep their day job and run the hostel/hotel or restaurant/bar for extra income. Why would you care what a local earns or is willing earn? You should care because your competitor has a very low profit threshold and that leads to...

2. Oversaturation
As a consumer, anyone living in Thailand is spoiled for choice when it comes to accommodation, eating/dining out and hitting up a bar for drinks. As an owner you will need to compete on price with the countless hostels/hotels that keep popping up every day.

3. Staffing/Theft
I always knew this was a problem in Thailand, but never realized how bad it was until I actually worked in management at a hotel. It is actually very difficult to find even marginally competent staff. That's why you see many properties over staff and I know one foreign manager that will fire staff on the spot if they don't adhere to a strict customer service regimen. His theory, if you don't stay on top or even over the top with the local staff the level of service can deteriorate rapidly. Cash is king in developing SEA and unless you are somehow able to run the place by yourself, it may be hard to stop the staff skimming off the top.

4. Scams/Corrupt Practices
You will probably have to pay the local police a 'fee' every month and although in many cases they don't try to bleed you dry, I know more than a few businesses that had to close down because they couldn't afford the payments.

The issue of foreign ownership of a business is an area that would need an entire data sheet to cover, but suffice to say that at the very least it will cost you a not insignificant amount of money to keep everything legal or the authorities off your back.

Scams for staff to make extra cash off of the business or the guests are very common and in many cases the guest/customer will not realize that they have overpaid to facilitate a commission. Running a parallel business or businesses is one of many scams that the staff will try to plot out while they are supposed to be taking care of the guests and many of these may be difficult to detect by a foreign owner.

While there are foreigners who are successful, many more tread water, and the vast majority end up in failure.


Guys, thanks a lot for all the clear information. Very interesting what I am reading here.

Kamaki4 (or anyone), as a general idea, can you give some figures (numbers)? I mean for a 400$-600$ net profit per month what is the (aprox) size of investment ($$$) and the size of the hotel (beds or total people able to accommodate)? Just to have a very general idea of the situation in Thailand...

400-600$ is really low...of course nobody is pretending becoming rich with a hostel in Thai but I thought the figures would be higher (with the exception of Chiang Mai area where the prices for a single room are incredibly low, lowest I have seen in SEA).

(06-07-2016 11:17 PM)Kamaki4 Wrote:  Myanmar is interesting, and there is no doubt that right now, anyone operating a hostel/hotel competently is making money. The last time I inquired three years ago, the minimum investment was $50,000 U.S and unlike Thailand you could own the business outright. If a guy set up a business, gained a better understanding of how things operate, then scaled up after a year or two, wealth accumulation would alleviate any misgivings about having to live there. It could definitely be a country where we will look back in X years and say, why didn't I go there to set up shop?

In the case of Myanmar, 50.000$ what kind of investment (guess we are talking about Yangon)? Any figure would be welcome


Of course, if going ahead after a deep study it would be with a partner(s) with experience in this field, otherwise there is no way....

Besides Myanmar I was having in mind the area of Komodo (Labuan Bajo) in Indonesia...I'm visiting it next month and I am surprise because being, apparently, a very interesting place (great diving/snorkelling, trekking, the dragons are an international attraction......etc), just checking agoda, booking and tourism forums (tripadvisor)....It seems that there is a clear lack of accommodation and the number of visitors are growing and growing.... But yes, this area is in the "middle of nowhere", unless your are fugitive I cannot see the reason for going to live to such an isolated place....

Thanks a lot
(This post was last modified: 06-12-2016 10:04 AM by colombo.)
06-12-2016 10:01 AM
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yfc4 Offline
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Post: #23
RE: Import/export business SEA and opening a Hostel: Indonesia-Thailand-Etc.
(06-12-2016 10:01 AM)colombo Wrote:  I was having in mind the area of Komodo (Labuan Bajo) in Indonesia...I'm visiting it next month and I am surprise because being, apparently, a very interesting place (great diving/snorkelling, trekking, the dragons are an international attraction......etc), just checking agoda, booking and tourism forums (tripadvisor)....It seems that there is a clear lack of accommodation and the number of visitors are growing and growing.... But yes, this area is in the "middle of nowhere", unless your are fugitive I cannot see the reason for going to live to such an isolated place....

Thanks a lot

Yeah, Labuan Bajo is pretty isolated. Flores and the surrounding area is among my favorite in Indonesia, really peaceful and the scenery is amazing. Although quiet, this place has lots of potential. I'm confident that in 5-10 years, this place will open to more tourism.

They are in the process of building a Lippo Mall (chain of malls all over Indo), which is a start and there were supposed to be plans for a Jakarta-Labuan Bajo, but it seems that hasn't happened yet.

Keep us updated on how it is all going.
07-06-2016 01:07 PM
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