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Posted by - ® JohnB on January 30, 2007 at 2:55 pm:
This is what i forecast for the Thai Baht almost 12 months ago to the day.
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Posted by - ® JohnB on January 24, 2006 at 6:39 pm:
The Thai Baht has just risen to a 9 month high against the USD,after the Central Bank rose interest rates for the 10th time in about 18 months to 4.25% matching the Federal Reserves target rate and therefore ending the yield advantage that favoured USD denominted assets that i wrote about a few days ago.
The Baht is on fire as it's the best performing of 15 Asian Pacific currencies partly on speculation growth in the economy and exports will encourage foreign investors to invest in the country's stocks.
In my opinion,the outlook is very bright for the Thai economy as growth should accelerate to 5% in 2006 from around 4.5% last year and that means to all of us travellers,we will receive less Baht for our Buck.
I'm an Aussie who earns USD,so i can't complain.
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Ok,back to today.I forecast that the Thai economy would grow by 5.0% for 2006,well i was wrong,it grew by 5.1% and 2007 looks like it will grow by at least 5%,maybe even 5.5%,which means the Thai economy is absolutely flying and as a result the Thai baht is stregthening against all other currencies.
The Thai Baht was the best performing of all Asian currencies in 2006,growing 16% against the U.S. Dollar.Although we are only 1 month into 2007,the Thai Baht is the WORLD'S best performing currency this year and will only get stronger as exports are extremely strong and foreign investors are buying Thai stocks which in turn is pushing up the SET (Stock Exchange of Thailand) which is stregthening the Baht.
HOW DOES THIS AFFECT OUR HOLIDAY TO THAILAND?
AIRFARES:
The airfare will most likely be the biggest cost of the holiday (unless you stay in 5* or stay a long time) and the good news is that the airfare won't be affected by the rising Thai Baht if you fly Qantas,Singapore Air,Malaysian etc.
ACOOMODATION:
This will hurt because everything that you pay for in Thai Baht will cost more with the rising Thai Baht(unless you live in Thailand).For example,let's say last year you paid 3,000 Baht a night for accom,at last year's exchange rate of 39.5 Baht to the U.S. Dollar,it cost you $75.94 per night and this year at 34.22 Baht to the U.S. Dollar,it will cost you $87.66 per night.So staying at the same resort this year will cost you US$11.72 more per night which is $82.09 per week,which really adds up if you're staying 2,3 or 4 weeks,ouch!
We all work very hard during the year and when we visit Thailand we want to stay in the best accom. that our budget allows,but there is a way of avoiding the rising Thai Baht when it comes to accom. and that is to stay in a cheaper resort,eww!
If you want to spend the same amount on accom. this year as last year you would need to find accom. with a nightly rate of
2,600 Baht.
Last year, B3,000/39.50 USD Exchange rate=$75.95.
This year, B2,600/34.22 USD Exchange rate=$75.97.
But then a lot of people like a certain resort and say we'll pay the extra $82 U.S. per week.Others are on a budget and will find a cheaper resort.
EATING & DRINKING:
Again anything you purchase in Thai Baht is going to be more expensive this year and this means everything you eat,drink and all tours you take.Buffet Breakfast is included at most resorts so that just leaves lunch and dinner and as we all know,you can spend as little or as much on each meal,so you can budget as much as you need to.Alcohol is expensive in bars these days,so buy as much as you can from 7-11 or supermarkets and fill up the bar fridge and drink before you go out.
Use online booking sites and cut out the travel agent fees.An example of this is a family member got a travel agent quote for 2 weeks in Hawaii,airfare and accom. and the quote came to $4,600 Australian dollars and i booked it all on the net for $2,900 so there are big savings to be made.
Most people will pay the extra if it means having a great holiday in Thailand,but there are ways to save.
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