Teflon Thailand’s Capital Opens Latest Comeback Chapter

In a crowded Bangkok bar, a Filipino singer belts out a ballad about a Vietnam vet who can’t help returning to Southeast Asia. On his seventh visit to the city, Australian Damien Waddell sips his beer and shrugs when someone mentions this year’s military coup.

“Doesn’t bother us,” says the 32-year-old sheet-metal worker from Perth, as he waits with his friends for a late flight home after a golf holiday in nearby Hua Hin. “We keep coming back.”

That’s Bangkok’s story. Through a dozen coups, a tsunami, financial upheaval, floods and riots, the city keeps bouncing back. With each crisis, tourism numbers slump, stocks crash and investment dips, only to return stronger. A unique draw of ancient temples, modern hotels, exotic food, raunchy nightlife and 24-hour shopping makes the place an enduring destination.

“There’s no other city in Southeast Asia like it,” said Santitarn Sathirathai, Singapore-based head of economics for the region and India at Credit Suisse Group AG. “You can come here to do business, shop, enjoy the nightlife and go sightseeing.”

The May overthrow of former Prime Minister Yingluck Shinawatra is testing the capital again. The number of visitors to Thailand fell almost 11 percent in May, according to preliminary figures from the Bank of Thailand. Hotel occupancy slid to 46.4 percent from 62.2 percent in February. More than half the nation’s visitors, who contribute about 10 percent of Thai gross domestic product, spend time in Bangkok.

Upheaval History

The city of 8.8 million is no stranger to upheaval. Since the abolition of absolute monarchy in 1932, it has witnessed bombing during World War II, a Japanese occupation and more than a coup per decade. Protesters shut down the international airport in 2008, riots broke out in 2010 and much of the region around the capital was inundated during 2011 floods.

While the city is best known as a tourist destination, it has been a trading port since the 15th century. In 1782, King Phutthayotfa Chulalok, or Rama I, founded the Rattanakosin Kingdom, and on April 21 erected the City Pillar here, a gold-coated post that marked the center of his new capital, whose Thai name of more than 100 characters hails Bangkok as the city of angels, seat of the king and home of gods incarnate.

The metropolis became the base for the regional headquarters of companies including oil producer Chevron Corp. and Norway’s Telenor ASA. It’s the focus of Southeast Asia’s largest auto-production base, hosting Toyota Motor Corp. and Honda Motor Co. as well as thousands of their suppliers.

Investment Rebound

Foreign direct investment slipped during past upheavals and then recovered, bolstering the moniker Teflon Thailand. Net inflows reached about $11 billion in 2012, trailing only Indonesia and Singapore in the region.

“There have been so many crises here,” said Yeap Swee Chuan, 66, a Malaysian national who has lived in Thailand for 30 years and is chief executive officer of Aapico Hitech Pcl, an auto-parts maker with a factory in Ayutthaya province, north of Bangkok, which was hit by the 2011 floods. “It’s very resilient.”

Bangkok’s benchmark stock gauge, which fell 10 percent in the final two months of 2013 during street protests against Yingluck, is up about 16 percent this year, four times the gain for the MSCI Asia Pacific Index.

Even so, resilience doesn’t equal competitiveness. Bangkok fell to 42nd in A.T. Kearney Inc.’s 2014 global cities index from 36th in 2010 and 22nd in 2008, below Beijing and Mumbai.

Edge Eroded

On the Chicago-based consulting company’s ranking of 60 emerging-market cities, measuring attributes including business activity and cultural experience, Bangkok had the steepest drop. It fell 15 places from 2008, dropping behind Manila, Kuala Lumpur and Dhaka.

Political turmoil has delayed spending on transport and infrastructure, eroding the city’s competitive advantage, said Krystal Tan, a Singapore-based analyst at Capital Economics Ltd.

“In the past, because of the edge that Bangkok had, it’s always been able to bounce back,” said Tan. “But its peers in the region like Jakarta and Manila have been catching up.”

The edge is represented by a blend of Buddhist temples, steel skyscrapers, choked roads and colorful canals. The mix has drawn movie makers since James Bond sipped a glass of 1974 Phuyuck wine at the Oriental Hotel in “The Man with the Golden Gun.” The city starred in 2011’s “Hangover II,” where locations ranged from the ritzy Lebua Sky Bar to street-level tattoo parlors.

Coup Selfies

“I’ve got to come back to Bangkok to get my ink done,” said Waddell, the Australian tourist, pointing to an image of his father during his army days, freshly tattooed on his left bicep. “I go back to the same place in Khao San every time because the guy’s a genius.”

He saw little sign of a country under martial law. After the May 22 putsch, tourist and Thai social media pages were full of photos of people posing for pictures with military personnel and armored vehicles. A curfew imposed by the junta was lifted June 13 and the sandbags, soldiers and roadblocks that appeared during the anti-governments protests have largely vanished and travelers are trickling back.

And when all else fails, there’s always the bargain prices.

An average Bangkok hotel room costs $116, compared with $235 in Singapore and $273 in Dubai, a ranking of city hotels compiled by Bloomberg showed.

In a bid to take the edge off the latest intervention, coup leader and junta chief Prayuth Chan-Ocha has arranged concerts, street parties and free movie screenings to “return happiness to the people.” The junta even wangled a deal to screen World Cup soccer matches free-to-air on television, and the Tourism Authority today said it would adjust its campaign to “Amazing Thailand: Happiness Within.”

For tourists like Ken Bradshaw from Leeds, England, Bangkok still rules.

“I love the weather, the food, and the freedom of Thailand,” said the 52-year-old on his third visit, drinking a Singha beer outside the Long Gun go-go bar in Soi Cowboy, one of Bangkok’s red-light districts. “I’d love to retire here.”

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