part III

7. Potential Risks and Threats

Operating a resort on a tropical island known for parties comes with a spectrum of risks. Explorar Koh Phangan has identified many and can strategize mitigations. Here’s an analysis of potential risks and “what-if” scenarios:

Natural and Environmental Threats: 

The resort’s beachfront location makes it vulnerable to nature’s whims. One risk is coastal erosion and rising sea levels – Haad Rin Nai’s beach could further erode or narrow over the years, which would diminish one of the resort’s assets. Severe monsoon storms or flooding are another threat; heavy rains (common in the late-year monsoon) can cause flash floods on Phangan’s hilly terrain or damage infrastructure. Though the Gulf of Thailand is relatively sheltered, extreme weather events are increasing with climate change. A “what-if” scenario could be an unusually powerful tropical storm hitting Koh Phangan: the resort might face physical damage or prolonged power/water outages. Mitigation: the resort has been proactive by installing solar panels and likely has backup generators​ rli.uk.com. Also, building design (concrete structures, elevated slightly) helps withstand storms, and they surely have insurance for natural disasters. Another natural risk is if coral bleaching or pollution further impacts the sea quality – currently the shallow reef offshore is not great for swimming; if it degraded into a smelly swamp (worst case), it could hurt the ambiance. The resort must engage in environmental stewardship, e.g. participating in beach cleanups, and perhaps even funding a local reef restoration or maintaining a clear swim zone.

Public Health Threats: 

The pandemic was a stark reminder of global risks. A scenario of a new pandemic or epidemic could again halt travel to the island. Koh Phangan, being so tourism-dependent, was hit hard by COVID-19. Explorar, like others, would face near-zero occupancy in such a case. While one hopes this doesn’t recur, the resort might consider diversifying to be resilient (for instance, courting more domestic Thai tourists or long-stay guests who might still come if international travel halts). They did pivot to domestic market as Thailand opened in phases – a strategy to keep in mind.

Regulatory and Political Risks: 

In Thailand, regulations can change. A pertinent risk is stricter noise or party regulations. If authorities decided to crack down on the Full Moon Party (say for environmental reasons or a local policy shift), or impose early curfews, it could reduce one of Phangan’s main draws. If Full Moon Party were banned (as an extreme scenario), Explorar would lose a significant lure. However, the resort could pivot to focus even more on wellness and digital nomadism in that event. Also, the resort hosts its own parties – they need to ensure compliance with local noise ordinances. If neighbors ever complain or if an incident occurred, authorities could restrict in-house events. Mitigation: maintaining good relationships with local police and community, perhaps ending loud music by reasonable hours (most nights by 11pm, except the sanctioned Full Moon night). Another regulatory risk is related to land and development: Thailand periodically reviews hotel licenses, and unlicensed structures can get in trouble. Since Explorar took over an existing resort with a license, this is low risk, but if they attempted expansion or new construction, they’d need to ensure all permits are in order to avoid legal issues. Political instability in Thailand can also indirectly affect tourism (e.g., if a coup or protests occur, tourist confidence dips), which is beyond the resort’s control but something that remains a macro risk.

Market Competition and Trends: 

As Koh Phangan grows in popularity, competition will intensify. There are rumors and ongoing projects of more high-end resorts on Phangan. For example, international brands could eye Phangan’s beaches (there have been talks of a Four Seasons or a Banyan Tree in the longer term, as the island gains upscale traction). If, say, a major 5-star chain opened a new adults-only resort on a swimmable beach, it could siphon some of Explorar’s target market. The resort will need to maintain its unique identity and loyal following. One advantage is the community vibe which big chains might not replicate easily. Another competitor is the rise of villa rentals/Airbnb on the island – some travelers might opt for a private villa with friends instead of a resort. Explorar counters this by providing a social atmosphere and events that private rentals lack. A “what-if” scenariohere: What if “Full Moon Party tourism” declines? Imagine in 5 years, the trend shifts and Phangan’s party scene isn’t as big a draw (perhaps travelers seek more nature or another destination becomes the new party hub). In that case, a chunk of Explorar’s appeal might wane. To neutralize that, the resort is already diversifying its appeal (wellness, co-working, culture). They could further lean into being a year-round retreat not tied to any one event. Conversely, if party tourism over-saturates (too many people, causing discomfort), that’s a risk too – the brand must ensure the parties remain enjoyable and the island doesn’t get a bad rap for being “too wild” beyond control.

Operational Risks: 

There are also everyday risks like staff turnover – being on an island, retaining skilled staff can be challenging if they get poached by properties on Samui or Phuket. The current owner mitigates this with good staff treatment (the staff loyalty seems high​ explorarhotels.com). Supply chain issues are another: everything on an island is a bit more complex to procure. If ferries cancel due to weather, supplies could run low. They likely keep good stock of essentials. A quirky but real risk on Phangan is infrastructure strain – e.g., water shortages in dry season or power outages (Phangan gets electricity via underwater cables from the mainland, which occasionally have outages). The resort has generators and water storage to buffer this.

Reputational Risks: 

In the age of social media, one viral incident can harm a hotel. For instance, if an accident occurred during one of their events (say a guest is injured jumping into the pool drunk), or if there was a report of crime (theft, etc.) at the hotel, it could deter potential guests. Security is thus important – they have measures in place especially during Full Moon (security guards at the gate to prevent non-guest intruders, etc.). Koh Phangan’s Full Moon Parties have occasionally had incidents (petty crime or rare violence); a scenario to consider is if a negative event (like a serious safety incident) at the Full Moon Party broadly leads tourists to avoid Haad Rin. While that wouldn’t be the resort’s fault, it would impact them. Mitigation: emphasize safety – e.g. perhaps they offer safe transportation, guidance (they do provide a shuttle and presumably warn guests about not carrying valuables to the beach, etc.). They can also diversify marketing to not rely solely on Full Moon.

Economic Risks: 

Global economic downturns or fuel price spikes (affecting flight costs) can reduce long-haul travel. If fewer Europeans travel in a given year due to recession, occupancy might drop. Having a balanced guest mix (including local and regional Asian travelers) can cushion that. Also, currency fluctuations: a strong Thai Baht can make Thailand pricier, affecting demand. These macro risks are shared by all in the sector.

Leasehold Risk: 

A major unique risk is the leasehold tenure. With about a decade left, what if the landowner decides not to renew or demands an exorbitant renewal price? In a worst-case scenario, by 2036 the resort might have to vacate or return the land (improvements typically become property of the landowner under Thai lease law if not renewed). That is a ticking clock. The owners likely will negotiate well in advance. Perhaps the success of the resort will convince the landowner to renew, but nothing is guaranteed. The resort could seek a “plan B” such as securing alternate land on Phangan to potentially relocate if needed (though that would essentially mean building anew, which is costly). This is a long-term risk outside the daily operations but critical for the business’s future.

Mitigation and Neutralization: Explorar Koh Phangan’s management can neutralize many threats through proactive measures:

• For natural threats: invest in solid infrastructure (they have), maintain good insurance, and have emergency action plans for storms (evacuation plans, etc.). Also engage in environmental preservation to keep the island healthy (which they do via sustainability efforts​rli.uk.com).
• For market changes: continue innovating the product. The fact that Explorar uses Koh Phangan as a testbed for new ideas​rli.uk.com is a strength – they won’t be caught stale. If a competitor arises, they can up their game with new features or experiences (like they did by introducing co-working, which no one else had). Build a community/loyalty: if guests love the brand, they’ll choose it even if alternatives exist. Perhaps start a loyalty program across Explorar resorts to encourage repeat visits.
• For reputation management: maintain transparency and excellent guest communication. The hotel already engages actively with reviews (management responses on TripAdvisor addressing any issues politely, etc.). Quick resolution of any on-site issues (like the AC complaint scenario) will prevent small problems from blowing up online.
• Financial buffers: The owners being well-capitalized (Oldham’s Pavilions group is not small) means the resort can likely weather short-term losses if crises hit. This stability is a mitigation in itself, as many independent hotels might fold under such stress, whereas Explorar can rely on group support.

Analogous Cases: We can draw lessons from similar island resorts and even other industries:

• Case: Koh Samui 2005 – When the 2004 tsunami hit parts of Thailand (not Samui, but affecting tourism overall) and again when political unrest in 2008 deterred tourists, Samui hotels that diversified to attract local expats and offered promotions survived better. Explorar could similarly pivot to e.g. domestic tourism or long-stay deals in crisis times.
• Case: Ibiza (Spain) – Like Phangan, an island known for partying but which has tried to upscale. Some Ibiza hotels faced backlash from locals over noise and had to invest in soundproofing and set curfews. Explorar can learn to keep good balance so as not to trigger any regulatory clampdown – perhaps ensuring their open-air parties are done by midnight except on Full Moon.
• Case: Tech Startups – Interestingly, since Explorar acts a bit like a startup, one can cite how successful startups always iterate their product. Similarly, if one concept at the resort doesn’t work (say the giant aquarium co-working if it was attempted and proved impractical), they scrap it and try something else. This agility is how they’ll handle risks of changing guest preferences.

In conclusion, while Explorar Koh Phangan faces a diverse risk landscape (natural, market, operational), it appears to be cognizant of these challenges. The spirit of innovation and adaptability that the brand champions is itself a form of risk mitigation – it means the resort is not complacent. By planning for worst-case scenarios (like ensuring financial resilience and alternative markets) and continuing to nurture community goodwill, Explorar can navigate the “what-ifs.” The ability to “expect the unexpected” on an island known for both bliss and occasional mayhem will be key: from having spare generators to backup DJ plans if rain cancels a party, the resort will need those contingencies. So far, its trajectory shows a capacity to overcome crises (surviving COVID and reopening strong is testament​ rli.uk.com). If it continues on this path, most risks can be either neutralized or at least kept within manageable impact.

8. Insider and Hidden Aspects

Beneath the glossy brochure surface, Explorar Koh Phangan has several insider facets – from land agreements to ownership webs – that are important to understand the full picture of the business:

Land Tenure (Leasehold vs Freehold): 

As mentioned, the resort sits on leasehold land. The Samui Island Realty sale listing explicitly notes a “registered leasehold… with 16.5 years remaining” as of the sale ​samui-island-realty.com. That was likely around 2019 or 2020. Now in 2025, that leaves roughly 11-12 years left on the lease. The land area is 4.23 rai (about 6,760 sqm) plus an additional 0.55 rai nearby used for staff housing​ samui-island-realty.com, which suggests the staff quarters are perhaps on separate land but included in the lease deal. In Thailand, foreigners cannot own land outright, so leasehold for 30 years (often with options to extend) is common for resorts. It’s very likely the lease has extension clauses – perhaps two extensions of 10 years each – but usually those are not automatic; they require renegotiation and possibly additional payment. 

Insider insight: 

It’s possible that Gordon Oldham or his Thai business partners are already in talks with the landowner to extend the lease further, especially since they invested in rebranding. Sometimes such leases are held via a Thai company with nominee shareholders. Oldham, being a lawyer, would structure it carefully. From a strategic perspective, the finite lease means the property is depreciating in a sense – every year closer to expiry. The owners must weigh the cost of a renewal (which could be millions of baht) against profits. A hidden aspect here is that the relatively low purchase price (50m THB) reflects the short lease. If they secure an extension, the value of the hotel would jump. There might even be a plan to eventually try to convert to freehold if laws or local arrangements allow (sometimes Thai landowners agree to sell the land itself to a Thai entity of the foreign investor). For now, though, one should assume that around 2033 or so, if not earlier, serious negotiations for extension will happen. The staff dormitory land is interesting – 0.55 rai could house some back-of-house facilities or modest quarters; having that ensures staff have accommodation (a big plus on an island) and possibly could be a site for future expansion if needed (though small).

Licenses and Certifications: 

Beyond the land lease, the operating licenses are crucial. The resort (as The COAST) presumably had the proper hotel license from local authorities. The rebranding wouldn’t change that, though they might have updated it under the new company name. Additionally, the resort likely holds a liquor license for the bar, a restaurant license, and perhaps special event permits when doing large parties. Insiders know that on Full Moon Party night, many resorts and bars pay a local tax or fee to allow extended hours. Explorar, being in Haad Rin, likely contributes to the local Full Moon Party committee or municipality fund that manages the event (for cleanup, security, etc.). Another hidden aspect is insurance – they would carry insurance for public liability (especially important given the pool and parties), property damage, etc. From a legal standpoint, another needed certification is the SHA+ (Safety & Health Administration) certification which Thailand rolled out post-Covid; likely Explorar Koh Phangan has it, indicating adherence to health protocols – more of a marketing point now, but it shows they are aligned with government tourism standards.

Ownership Structure and Connections: 

While we know Gordon Oldham is the primary owner, it’s insightful to see the network. Oldham is also the founder of The Pavilions Hotels & Resorts, a separate luxury boutique brand operating properties like The Pavilions Phuket, The Pavilions Bali, and even city hotels in Amsterdam and Madrid. It appears Explorar was incubated under Pavilions initially (TopHotel says “Launched in 2021 as a brand of boutique hotel group, The Pavilions Hotels & Resorts” ​tophotel.news). So behind the scenes, Explorar Koh Phangan might still benefit from Pavilions’ infrastructure – e.g. shared sales teams, marketing resources, and a referral network of guests. Interestingly, the Pavilions brand itself started with Oldham’s properties but later took on other investors; one could surmise that Explorar might follow a similar path. Another insider element: Tim Sargeant and Adam Boulton (co-founders of Explorar) likely have equity stakes or profit-share in the business. They both have extensive hospitality backgrounds (Adam Boulton was a COO at Horizon Homes Samui per LinkedIn ​th.linkedin.com, and Tim Sargeant possibly from hotel operations). This suggests a partnership where Oldham provided capital and strategic oversight, while Sargeant/Boulton bring operational expertise and on-ground management. Niels Huby, the CEO, presumably also has equity or at least performance incentives; he’s often the public spokesperson​rli.uk.com. These individuals form a tight leadership team – an insider “brain trust” that meets to decide brand direction. The presence of Gordon’s Pavilions connections might also open doors; for instance, Pavilions has a marketing office in Hong Kong or Singapore that could be indirectly supporting Explorar.

Financing and Backers: 

The resort’s acquisition and renovation were financed privately. Oldham, as a successful lawyer and entrepreneur, likely used personal or internal funds rather than bank loans (especially given Thai banks’ reluctance to lend to foreign entities). However, there may be silent partners or investors. One hint: Pavilions hotels have had investment from wealthy individuals and family offices. It wouldn’t be surprising if some of Oldham’s network – maybe a family office that invested in Pavilions – also put money into Explorar as a venture. The brand’s quick expansion plans (already a third property in the Philippines and looking at Thailand expansion​ rli.uk.com) suggest there is capital injection and confidence. Possibly, The Pavilions Hotels & Resorts group itself (which Oldham founded but may have other shareholders) is partially backing Explorar financially. If so, this means the resort is not a standalone asset, but part of a larger portfolio strategy. This could be an exit strategy insight: perhaps the goal is to scale up Explorar then merge or sell it along with some Pavilions assets in a few years.

Potential Reserves or Expansion (Hidden Assets): 

We touched on the staff dorm land (0.55 rai). If that’s near the resort, an insider thought could be converting it into something more. For example, they could develop that into additional guest rooms or a small villa cluster if the lease allows building on it. Alternatively, they could build a dedicated wellness center or yoga shala there, freeing up space on the main grounds. Sometimes resorts have “hidden” land in the sense of adjacencies: it’s worth checking if any adjacent plots could be for sale. If Explorar’s concept thrives, they might consider expanding on Koh Phangan itself – say a second property on another beach (maybe a Treehouse or Mountain version as a complement). For now, nothing official, but insiders might keep an eye on land opportunities.

Exit Strategy – Soft Exit or Transfer: 

As a business, the owners will eventually consider their exit. A soft exitmight involve handing over management to a larger operator while retaining ownership. For instance, if down the line a major chain wanted a presence in Phangan, they might approach Explorar’s owners to rebrand or manage the hotel. Given Explorar is their own brand, they likely prefer to grow it, but if an offer came (imagine Marriott’s W Hotels wanting to buy them out to turn it into “W Koh Phangan”), that’s a scenario. Another scenario is selling the Explorar brand or a stake in it to a bigger company. If Explorar as a chain gets, say, 5-10 properties, it might attract interest from larger hospitality groups seeking a lifestyle brand. In that case, Explorar Koh Phangan could either be sold as part of that package, or its operations handed off while perhaps the land lease continues to be held by Oldham’s company (somewhat like franchising or sale-leaseback). Family succession is another angle: Oldham is a bit older (in his 70s perhaps), so he might eventually step back – one wonders if he’s grooming someone (maybe Niels Huby or others) to take over the brand leadership, which could affect how the resort is run (but likely only positively, since Huby is already leading).

Hidden Strengths: 

On the positive insider side, the resort has some hidden strengths. One is staff loyalty and training – carryovers from The COAST times mean some staff have a decade of experience on that property. They know returning guests (some loyal repeat guests existed for The COAST and have come back to see it as Explorar). This continuity is a quiet asset – those staff act as custodians of corporate memory. Another hidden aspect is the data and feedback the brand collects by using the Koh Phangan resort as a testing ground. They probably have very detailed guest feedback mechanisms (surveys, etc.). This data is gold, as it not only improves Koh Phangan’s operations but informs the entire brand’s concept for new hotels. Essentially, every event or feature is measured – e.g., they analyze how the co-working space is used, what time people actually show up for yoga versus for happy hour – and then refine. This analytical approach is an insider hallmark of Explorar.

Connections with Tour Operators: 

In the earlier years, The COAST had strong ties with TUI (Germany) given the Sensimar partnership for Samui. While the Phangan resort wasn’t Sensimar, it likely got German guests through TUI packages. Insiders would know that for high season, there might be allotment contracts (e.g., TUI or other European tour operators block a set of rooms). Sometimes these contracts can guarantee a base occupancy (but at lower rates). If such agreements are in place (they might have been renewed post-Covid), it ensures some financial stability. On the flip side, dependence on one operator can be risky if that operator pulls out. But Explorar probably diversified distribution (with direct online presence and various OTAs).

Unverified Hypotheses and Grey Areas: There are a few points that require verification or remain speculative:

• Lease Renewal: We assume an extension is possible; an outstanding question is whether any option to extend beyond the initial term was contractually guaranteed when Oldham bought it. The listing didn’t mention an option, just the remaining term​ samui-island-realty.com. This needs verification but likely is something only the owners know. If no fixed option, they rely on negotiation goodwill.
• ROI and Performance: We don’t have actual post-2022 financial data. A hypothesis is that performance is improving and perhaps nearing the pre-Covid levels in terms of occupancy, possibly higher ADR due to repositioning. Verification would require internal data or at least RevPAR figures if they share them at some point.
• Ownership Vehicle: It’s presumed a Thai company holds the lease (perhaps named something like “The Coast Phangan Co. Ltd.” originally, which might have been bought by Oldham’s group). It would be interesting to confirm the company name and directors from Thai business registry for completeness (that would show which Thai partners are on paper).
• Local Relations: While we believe they’re good, it’d be useful to confirm if Explorar is a member of the local hotel association or has any MoUs with community (like adopting a school or sponsoring local events). That info might be in Thai news or social media, but we haven’t seen it explicitly. It’s a hypothesis that they’re doing well on that front given the sustainability talk​ rli.uk.com.
• Pipeline Impact: Explorar brand’s pipeline (Phuket, Chiang Mai, etc.)​ rli.uk.com could indirectly affect the Phangan property’s resources – e.g. might we see some staff or managers leave for new Explorar openings? That’s an insider consideration (internal talent being spread across projects).
• Pandemic Adjustments: We assume that the resort’s closure was from 2020 until late 2022 reopening. It’d be good to verify if it maybe reopened briefly in early 2021 for domestic travel (some did) or it was shut the whole time. Local forum posts might clarify that, but either way, it was largely inactive until rebrand.

Potential Reserves and Partnerships: 

The owners likely have some “reserve” plans. For instance, if the Koh Phangan land lease could not be extended, one reserve could be to relocate on Koh Phangan by acquiring a different plot – possibly a freehold via Thai company if available. There are still undeveloped plots on other beaches. Oldham’s team might have scouted alternatives just in case (that’s speculation, but prudent investors often do). On partnerships, they might consider aligning with a wellness or tech brand to augment offerings – e.g., partnering with a famous DJ brand for music events (to draw crowds, like “Ministry of Sound Beach Party at Explorar” type of thing) or with a wellness guru to host retreats. These could be not just marketing events but deeper partnerships if they find a particular niche profitable.

Soft Exit Scenarios: 

If the owners decided to step back but not fully sell, they could bring in a management company. However, since Explorar is their management company/brand, a soft exit could be handing day-to-day to a trusted team (which they’ve sort of done with Huby, etc.). If Oldham ever wanted to cash out partially, he might sell a stake of the Explorar brand to outside investors but keep the hotel assets. Or vice versa, sell Koh Phangan lease to someone who would continue to let it be managed as Explorar (like how some hotel owners are separate from brand). Given the short lease, a direct sale might not fetch a high price until it’s extended.

In essence, the insider view of Explorar Koh Phangan is that of a venture capital-like project in the hospitality space. It’s backed by experienced individuals with a larger brand vision, it has an expiration date that they’ll need to tackle, and it carries the legacy of its predecessor (The COAST) quietly in its foundation. The resort’s success thus far likely validates the owners’ strategy, and one can foresee that many of these hidden aspects – lease negotiation, brand expansion, etc. – will play out in the next few years. Guests wouldn’t notice these undercurrents; they just see the cheerful staff and the beautiful pool. But behind the scenes, decisions about how to sustain and evolve the resort are constantly being calculated, ensuring that Explorar Koh Phangan not only provides a great vacation today but remains viable and vibrant in the years to come.

9. Sources

part I Koh Phangan