Rincome no more

Rumours have been circulating for some time about what is going to happen to the old Amari Rincome corner at Nimmanhaemin and Huay Kaew Roads.

By | Fri 18 May 2012

Rumours have been circulating for some time about what is going to happen to the old Amari Rincome corner at Nimmanhaemin and Huay Kaew Roads. For forty years the Rincome, which turned into the Amari Rincome, was one of the most beloved Chiang Mai hotels and a city landmark – not pretty, but a landmark nonetheless.

Times have changed and even old Rincome has to change with it.

Marc Dumur, the Honorary Swiss Consul, former GM of the Amari Rincome Hotel and long term resident of Chiang Mai, delineated to CityNews the history of that important corner on a Chiang Mai intersection.

“The land and the building belongs to the Nimmanhaeminda family, in fact the entire road belongs to the family,” explained Dumur. “The Rincome hotel opened back in January 1969 but before that, in ’67 and ’68, the soi 1 apartments were built and rented out (so successfully over the years that there has been a waiting list of years for the past few decades). The family got creative after their initial apartment idea and put in a pool, coffee shop and more apartments. They then got a bigger loan and built the lower part of the building, and the official opening of the Rincome Hotel was in 1969. Brothers and sisters Kraisri and Chaemchit Nimmanhaeminda managed it all in those days.

In ‘72 ItalThai, a construction firm, was hired by Kraisri to add a second wing as well as floors 5-7 floors to the building, build a tennis court, and add other features that would make the hotel a 1st class location for tourists. Kraisri got on well with ItalThai, explains Dumur, and soon they developed a good working relationship. ItalThai already owned Nipa Lodge in Pattaya which they possessed as a payment default, and so Kraisri asked them whether they would be interested in managing the Rincome hotel. After doing a feasibility study it was agreed that ItalThai, instead of getting paid for adding floors, would become co-owners of the project and be awarded a management contract for 25 years. This would shape the corner of Nimmanhaemin for many years to come. ItalThai soon sent up the first foreign general manager, Lorenz Ferrari, from Bangkok to take over the hotel.

At the time of the contract, in ‘72, Kraisri was canny enough to demand the payment be made in Swiss francs. At the time, his cousin was Director of the Bank of Thailand and had inside knowledge that the US dollar would soon devalue. He insisted on being paid in Swiss franc which turned out to be a very astute move as the currency stayed strong and the rent for the property became astronomical, sky rocketing through the seventies and eighties, earning the Nimmanhaemindas a tidy amount of money.

Nothing much changed for a long time though in ‘97 the contract ended and so ItalThai, which by this time owned the Amari chain of hotels, signed another contract with the Nimmanhaemindas for another 15 years, though rental fees were renegotiated down. ItalThai agreed to the stipulation that during the 15 years they would be obligated to invest millions of baht in the building, fitting it out with mod cons, new lifts, etc.

ItalThai, one of the richest companies in Thailand, has also undergone huge changes over the past few years since the owner died in a plane crash ten years ago, explained Dumur. The son took over while he was only in his late twenties. Full of vim, the budding entrepreneur decided to open hotels all over South East Asia. The young blood however clashed with old hands, and the then Amari hotel boss, who had been in the industry for 37 years, resigned.

A new team came into the Amari which rebranded themselves as Onyx. Top hoteliers were brought in, as well as top management, the Amari Rincome was considered a dated and ugly eyesore in the corporate chain.

Dumur explained that the old Amari Rincome hotel was very expensive to run as it just wasn’t modern, the electricity bill came to 6-700,000 baht a month alone, while oil for the hot water was another 3-400,000 baht a month. The contract between ItalThai-Amari-Onyx ends this year, but last May the Chiang Mai stalwart, a hotel that has seen everything, was no more. The Amari closed the hotel a year earlier than contractual obligations, though they will pay the Nimmanhaeminda family until the end of the contract. They have liquidated everything, and only bare walls are left inside the hotel.

Initially Onyx was interested in signing a new contract, however, following a study by “their big accountants with their big red pens,” they decided that a hotel was no longer viable. “It takes15-20 years to see a return in investment for a hotel, whereas a retail outlet sees a return in 5-10 years,” said Dumur. “Chiang Mai has too many hotels now and Onyx wanted to go the retail route.” The Nimmanhaeminda family rejected the shopping mall idea, wanting to continue to run the iconic Rincome hotel, but failed to find investors.

Negotiations broke down and Onyx are now out. The 12 rai of land of the Nimmanhaeminda family is hugely valuable with current estimates at 50 million baht a rai. Not yet willing to sell their land, they have recently signed an agreement with MBK (Ma Boon Krong) shopping mall in Bangkok to build a retail shopping mall and construction will commence in January 2013. The city will reclaim some of the land of the property and the spirit house will be no more.

“I feel bad for people living there,” laughs Dumur, “the cement is from 40 odd years ago and is solid like you will not believe, it will be a huge job to demolish it.”