CHIANG MAI — The cause of a massive fire which broke out around 2 a.m. on April 23 at Chiang Mai’s Dhara Dhevi Hotel, a five-star property valued at nearly 4 billion baht ($119 million), is under investigation.
The blaze, which is believed to have started in a former spa building that had been closed since the COVID-19 pandemic five years ago, completely destroyed several connected structures covering approximately 500 square wah (2,000 square meters).
The Governor of Chiang Mai has ordered relevant agencies to investigate the cause of the fire, delegating Deputy Governor Siwakorn Buapong along with local administrative officials, disaster prevention authorities, public works representatives, forensic investigators, and Mae Ping Police Station officers to inspect the site.
Evidence collection was delayed during the morning hours as firefighters continued to spray water on the buildings to prevent reignition, as some hot spots were still flaring up despite the situation being under control. The challenge was intensified by the hotel’s antique teak wood structures, which continued to smolder in some areas.
Meanwhile, police have cordoned off the site, awaiting a thorough examination by officials from the insurance office, the Office of Disaster Prevention and Mitigation, and forensic police investigators.
The Story of Magnificence
Construction of Dhara Dhevi Hotel began in 2002 before opening its doors in 2004. That same year, Dhara Dhevi signed a memorandum of understanding with the Mandarin Group to manage the property for 15 years (renewable for another 15 years). This partnership gave Dhara Dhevi access to hospitality management expertise, staff training, and marketing networks, leveraging Mandarin Group’s extensive customer database from its worldwide hotel chain.
The hotel, which required an investment of 3 billion baht, faced controversy during construction when Lanna academics protested against its replication of historical sites and important landmarks within the hotel grounds. While aesthetically impressive, some artists criticized the inappropriate use of ancient art forms in a commercial context.
Subsequently, Chinese investors who owned two private airlines and several hotels in China purchased a 49% stake for over 2 billion baht and became involved in management and additional investment planning.
In 2015, Suchet Suwanmongkol, the major shareholder, sold the hotel to Dr. Wichai Thavornwattanayong, Chairman of Inter Far East Energy Corporation Public Company Limited (IFEC). IFEC acquired 100% of Dhara Dhevi Chiang Mai’s shares along with its debt, in a deal believed to be worth 2.52 billion baht.
In 2020, during the global COVID-19 pandemic, the hotel management informed IFEC that they needed to temporarily close Dhara Dhevi, affecting more than 300 employees. The hotel couldn’t even pay salaries and had accumulated trade debts and utility bills exceeding 30 million baht.
Although the new board of directors attempted to resolve financial issues by arranging several loans totaling nearly 20 million baht, a hidden problem dating back to the 2015 acquisition emerged: Dhara Dhevi only had hotel operating licenses for 64 rooms, while the remaining 59 rooms were still awaiting approval pending an environmental impact study. This resulted in massive annual losses, leading to bankruptcy proceedings by the end of 2020.
However, Siam Estate Dhara Dhevi Company Limited, registered on December 6, 2023, with a registered capital of 2 billion baht and headquartered in Bangkok, later acquired Dhara Dhevi at auction for approximately 3.9 billion baht.
After taking ownership, Siam Estate Dhara Dhevi began renovating and developing the hotel grounds. They recently organized the “Kad Dhara Dhevi” event in February to develop an economic zone selling handicrafts, community products, and local food, along with cultural performances at the hotel entrance. However, they had not yet reopened the guest rooms.
This fire represents another significant blow to Dhara Dhevi’s business, and the investigation results will be crucial in determining the fate of one of Chiang Mai’s largest and most famous hotels.
