Fire Strikes Dhara Dhevi: A History of Sales, Debt, and Now Disaster at Iconic Thai Resort

 

The five-star Dhara Dhevi Hotel, a sprawling estate in Chiang Mai, was engulfed by fire in the early hours, prompting a significant emergency response.

 

While the extent of the damage and the cause of the blaze are under investigation, this incident is the latest in a series of dramatic events that have overshadowed the resort's initial grandeur.

 

Opened in 2004 following a substantial investment of 3 billion baht, Dhara Dhevi was initially managed by the prestigious Mandarin Oriental Hotel Group for a 15-year term, with an option for a further 15-year extension.

 

The "Dhara Dhevi" hotel has been embroiled in drama since its initial construction, facing opposition from Lanna scholars regarding the replication of ancient monuments and historical sites within the hotel, as reported by Manager 360 Degrees.

 

Suchet Suwanmongkol, the hotel's owner at the time, a former Isuzu car dealership magnate with a passion for Lanna culture, declared his intention to live and die in Chiang Mai.

 

Despite this passion and beneath its luxurious façade, financial difficulties soon emerged. Only a few years after opening, news surfaced that "Dhara Dhevi Chiang Mai" was up for sale.
 

 

 

In 2012, "Sant Suebsaeng," advisor to Mandarin Oriental Dhara Dhevi, clarified that reports of the "Suchet Suwanmongkol" group selling the business were untrue.

 

Instead, a group of Chinese investors, owners of two private airlines and several hotels in China, were interested in a joint venture, acquiring a 49% stake worth over 2 billion baht and joining in management and some additional investment planning.

 

Dhara Dhevi Hotel continued operations with the original shareholders retaining the majority stake, though they had been seeking additional investors for several years to alleviate financial burdens.

In 2015, Suchet sold the property to Dr Wichai Thavornwattanayong, chairman of the Inter Far East Energy Corporation (IFEC), for 2.52 billion baht, including the assumption of significant debt.

 

Subsequently, rumours circulated about Dhara Dhevi Hotel nearing bankruptcy due to IFEC's shareholder issues, claims denied by "Dr Wichai."

 

In 2020, the COVID-19 pandemic hit. Management informed IFEC that temporary closure was necessary as the hotel, with over 300 employees, was operating with only one occupied room.

 

Inspections revealed severe financial distress, with unpaid payroll and trade debts and utility bills exceeding 30 million baht. A new board helped by arranging loans of nearly 20 million baht.

 

IFEC also disclosed that in late 2015, its subsidiary, Inter Far East Cap Management, purchased shares of the Dhara Dhevi Hotel company for hundreds of millions of baht and acquired debt from a financial institution, totaling nearly 4 billion baht.
 

 

 

Upon acquisition, Dhara Dhevi only had a hotel operating license for 64 of its rooms, with the remaining 59 unlicensed pending an environmental impact assessment.

 

Operating with a full staff of approximately 400 for only partially licensed rooms, and offering generous 5-star employee benefits, Dhara Dhevi predictably incurred substantial annual losses.

 

Regarding occupancy, from October 2019 to early January 2020, the hotel had around 20 occupied rooms. Following the initial wave of the COVID-19 pandemic, occupancy plummeted to around 10 rooms, eventually reaching just one, leading to temporary closure in early 2020.

 

In May 2021, over 100 Dhara Dhevi Hotel employees protested at the Chiang Mai Provincial Labour Welfare and Protection Office over four months of unpaid wages. On November 23, 2021, the hotel issued termination letters to all staff, citing the pandemic.

 

The unpaid wages led to the dismissal of staff and the permanent closure of Dhara Dhevi Hotel, pending its auction by the Legal Execution Department.

 

On November 2, 2021, the auction was announced for November 12, 2021, with a starting bid of 2.116 billion baht – only half of IFEC's 2015 purchase price of 2.52 billion baht, though the total debt amounted to 4.3 billion baht.

 

The auction faced complications, with an IFEC-affiliated bidder requesting a time extension to deposit funds, which was initially refused, potentially leading to a new auction.

 

Named after a revered Lanna queen and meticulously designed to reflect the region's rich heritage, Dhara Dhevi's ambition was clear. However, its history has been consistently marked by financial turbulence and changes in ownership.

 

This overnight fire represents the latest, and perhaps most visually arresting, chapter in the ongoing drama surrounding this once-celebrated, but ultimately troubled, Thai hotel.