Kneeling in front of a statue of Buddha, I rattled a bamboo box containing a set of numbered divining sticks. The motion gradually caused one of the sticks to rise out of the box and fall to the floor. No. 22. From the correspondingly numbered pigeonhole in the wall to my left, I retrieved a piece of paper bearing “Prophecy No. 22.”

It was my first morning in Chiang Mai, the de facto capital of northern Thailand, 500 miles (an hour by plane, 11 hours by train) north of Bangkok. Would my visit to this historic city be lucky? I was about to find out. The inscription was in Thai and English.

“The 22nd number tells you that your luck is enough. It is too long to get a lover. Hard to win in a lawsuit, and difficult to find lost things. Middle luck.”

I had come to Wat Phrathat Doi Suthep, a Buddhist temple situated on a thickly forested hillside 3,000 feet above the city. This was, I had been told, the most auspicious place to begin a visit to Chiang Mai. In accordance with custom, I had walked three times clockwise around the temple’s centerpiece, the golden chedi, a lustrous pagoda said to contain one of Buddha’s shoulder bones. Then I lit a candle and a joss stick, placed some flowers at the foot of one of the temple’s many statues, and finally shook the divining sticks. After all that, only middle luck!

Yet, despite Prophecy No. 22, the portents were exceptionally good. This morning the sun was shining brightly after two weeks of unrelenting rain. For the previous few days parts of the city had been under floodwater. Now the floods had receded, the sky was blue and everything was clean and pristine — shining under the returned sun. From a viewpoint behind the temple, the city spread beneath me like a map. At its heart, forming a perfect square enfolded by a moat and the remnants of an ancient wall, lay the old city.

Clustered within the old city, and scattered beyond it, I could make out the gleaming pagodas of dozens of temples, known locally as wats. (American tourists in Thailand can all too easily slip into a variation of the famous Abbott and Costello routine.“ We’re going to a wat today.” “A what?” “Yes, a wat.” “What?’)

The city was founded in 1296 as the capital of the Lanna Empire, a vast territory that, at its peak, embraced northern Thailand, as well as parts of China, Burma and Laos. At the end of the 19th century, Lanna was incorporated into the Kingdom of Siam (now Thailand), and Chiang Mai became a provincial backwater. It still retains that small-town feel (especially when compared to Bangkok), further accentuated by local planning laws that decree that no tall buildings can be constructed within 305 feet of a wat. Thanks to the plethora of wats, nearly 90 percent of the municipality is protected against high-rise development.

Despite its seemingly isolated location and its relatively soporific atmosphere, Chiang Mai is remarkably cosmopolitan, and for decades has been a popular hangout for hippies and backpackers searching for the authentic face of Thailand. Many come to study Buddhism, or to learn the Thai language, or to trek to remote villages to visit with the region’s hill tribes, or even to train as elephant mahouts. Within the past five years, however, there has been a significant shift in the city’s approach to tourism. Although the hippies and backpackers are still welcome, there is an increasing emphasis on the top end of the market, and a growing influx of affluent visitors from the United States, China, Japan and South Korea.

The most spectacular manifestation of this shift is the Mandarin Oriental Dhara Devi, a $100 million, 60-acre resort designed to replicate a traditional Lanna town, complete with palaces, temples and opulent guest villas, all set amid idyllic working rice paddies inhabited by lazy water buffalo. The Mandarin Oriental is one of several five-star properties that have opened recently, and others are being planned. Alongside the exclusive resorts, another symptom of Chiang Mai’s evolving tourism industry has been the burgeoning number of luxury spas. There are now more than 50 spa operators, providing a wide range of treatments.

Although tourism is the most high-profile sector of the Chiang Mai economy, attracting nearly 14 million foreign and Thai visitors each year, the city’s economy is also robustly underpinned by manufacturing and exports (especially electronics, jewelry, and motor products for export to the United States, Japan and Southeast Asia). For the long-term future, plans have been proposed for a massive new conurbation between Chiang Mai and the nearby city of Lamphun, effectively creating Greater Chiang Mai. Such a development would establish the region as an important transport and industrial hub, while also protecting Chiang Mai’s unique cultural and architectural heritage.

Large-scale urban development was hard to imagine as I drove southeast out of Chiang Mai on my final morning. The road threaded through a sleepy rural landscape of rice paddies and teak forests. Agriculture continues to play an important part in the local economy, employing methods of production that have changed little over the centuries. I found evidence of that at my destination, the National Elephant Institute (http://www.thailandelephant.org). I arrived just in time for the elephant show, in which the pachyderms demonstrated their skill in moving logs and stacking logs — human ingenuity has yet to produce a vehicle that can outperform a well-trained elephant in the forests of Thailand.

After the show, I queued up for an elephant ride behind Herb and Dorothy, a retired couple from Dallas. “Are you sure you should be doing this, Herb?” asked Dorothy. “The elephant might not be able to take your weight.” There was no danger of that. The elephants were huge, dwarfing even a man-mountain like Herb. From a raised platform, I stepped across to the wooden bench fastened onto the back of my bull elephant. The mahout told me to hold on tightly. I maintained a white-knuckled grip for the next 30 minutes.

As we rocked and rolled through the surrounding jungle, I took my mind off the discomfort of the ride by reflecting on my visit to northern Thailand. Chiang Mai had been a welcome antidote to the polluted, gridlocked sprawl of Bangkok, and I had thoroughly enjoyed the region’s distinct culture and cuisine. It seemed that my auspicious trip to Wat Phrathat Doi Suthep had paid dividends after all.

The elephant emerged from the trees to cross a river ford. In mid-stream, he began to misbehave. The mahout shouted orders, but the elephant ignored him, heading instead for deeper water. Alarmingly, it appeared that he was intent on taking a bath. The mahout’s shouts grew more desperate. Finally the elephant heeded the instructions and doubled back.

“Phew!” I said from my precarious vantage. “That was lucky.” At that moment, the elephant sucked up a trunk full of water and nonchalantly tossed it over his shoulder, soaking me. I should have remembered that I had drawn No. 22, and therefore I could only rely on middle luck.

LODGING

MANDARIN ORIENTAL DHARA DEVI

Not just the top hotel in town, but also a genuine contender in the “best in the world” stakes. There is no other resort quite like it. This sprawling property (which is so extensive that you get around by golf cart or horse and trap), is laid out like a Lanna town, and aims to provide the ambience of a “living historic monument.” The ornate teak and stone architecture is stunning. The Dheva Spa, for instance, is a meticulous recreation of the Burmese royal palace in Mandalay. The 127 suites and private villas are sumptuous and fully equipped with the latest in hightech luxury. If there is a drawback, it is that you’ll never want to venture beyond the resort’s gates. But if you can tear yourself away, downtown Chiang Mai is just a 10-minute drive. $$$$
MANDARIN ORIENTAL DHARA DEVI
51/4 Chiang Mai – Sankampaeng Road
tel 66 53 888 888, fax 66 53 888 999
http://www.mandarinoriental.com

FOUR SEASONS RESORT CHIANG MAI

The Mandarin Oriental’s principal rival, the Four Seasons (formerly The Regent Chiang Mai) is set in a rural location 30 minutes northwest of the city. Its 64 villas, decorated with Siamese art, overlook beautiful, terraced rice paddies. There are also 16 palatial residence suites, which come with their own live-in housekeeper. The resort offers a spa, a gym, and a cooking school specializing in Thai cuisine; the full six-day course can be booked as part of an all-inclusive package. $$$$
FOUR SEASONS RESORT CHIANG MAI
Mae Rim – Samoeng Old Road
tel 66 53 298181, fax 66 53 298190
http://www.fourseasons.com/chiangmai

HORIZON VILLAGE

There aren’t many hotels that can boast their own botanic garden. Or perhaps it should be the other way around, because Tweechol Botanic Garden was actually here first. The luxurious Horizon Village is a recent addition, and probably represents the best value for money in town.The rooms are spacious and beautifully designed, and most look out on the ponds and manicured landscapes of the substantial botanic garden (you can borrow a bicycle to get around). The hotel also hosts one of the three Chiang Mai branches of Oasis Spa. $$
HORIZON VILLAGE
200 M.7
Chiang Mai – Doi Saket Road
tel 66 53 868 891-3, fax 66 53 868 894
http://www.horizonvillage.net

DINING

LE GRAND LANNA

Long established as the best restaurant in Chiang Mai, and now part of the Mandarin Oriental, Le Grand Lanna is beautifully laid out within a complex of wooden pavilions (one of which is called Diana’s Room in honor of Princess Diana, who dined here in the 1980s). It remains a popular spot for royalty and international celebrities — actor Kevin Bacon was here the week before my visit, and the Duke of York visited the following week. The menu features a wide range of specialties from throughout Thailand. This is local food at its finest. $$$$
LE GRAND LANNA
Mandarin Oriental Dhara Devi
51/4 Chiang Mai – Sankampaeng Road
tel 66 53 888 888, fax 66 53 888 999
http://www.legrandlanna.com

PICCOLA ROMA PALACE

Thai food is great, but when you’ve eaten nothing else for several consecutive days you’ll probably find yourself craving something more familiar. This large Italian restaurant is a local institution, run by an Italian chef with nearly 50 years of experience. I found the food – plenty of pasta and rich sauces – to be perfectly decent, and the wine list was extensive. Some customers, however, have complained about the quality of service, and by Chiang Mai standards it’s quite expensive. $$
PICCOLA ROMA PALACE
144 Charoenprathet Road, A.Muang
tel 66 53 820 297
http://www.chiangmainews.com/piccola

ANTIQUE HOUSE NO. 1

This popular downtown restaurant is housed in a fascinating teak house built in 1870 and brimming with antique furniture. The excellent food is mainly Northern Thai, and there is often live traditional music.The atmosphere on a balmy tropical evening is wonderful — the ideal place to eat before visiting the Night Bazaar a couple of blocks away. Antique House No. 2 (aka The River Ping Terrace) is situated on the banks of the Ping River, a short drive south of downtown. $
ANTIQUE HOUSE NO. 1
71 Charoen Prathet Road, A. Muang
tel 66 53 276 810

DIVERSIONS

Chiang Mai’s most popular attraction is the Night Bazaar, which lines both sides of Changklan Road close to the main waterway, the Ping River. It’s usually hot and very crowded, but is a great place to pick up local souvenirs at a reasonable price (bartering is expected). Other stalls sell counterfeit designer goods, pirated DVDs and CDs and fake watches.

Chiang Mai Night Safari (http://www.chiangmainightsafari.com) is a new multimillion-dollar attraction that aims to emulate the famous night safari at Singapore Zoo.The central complex is reminiscent of “Jurassic Park,” and the trolley bus tours take you through enclosures teeming with exotic beasts from Africa and Asia. It’s ideal for families.

I’m not a spa person, but I took advantage of the chance to visit the downtown Amora Oasis Spa (http://www.chiangmaioasis.com), one of four properties co-owned by Toby Allen, an expatriate from Florida. For two hours I underwent a coffee body scrub followed by a hot oil massage (total cost, approximately $66). Admittedly, I only managed to stay awake for about half of that time, but the experience was perfectly agreeable, and by the time I returned to the city streets I felt thoroughly refreshed and relaxed.

Many local tour operators offer three-day jeep safaris to the remote hill tribe villages in the mountains of the far north. Expect to pay around $125 per person, including accommodations.

Taste Test
The cuisine of Northern Thailand is world-renowned — hence the cookery courses offered by many of the city’s hotels and resorts. In contrast to the spicy food of southern Thailand, northern food utilizes a wide range of herbs, as well as bitter ingredients such as lime juice and lemongrass. It is usually eaten with noodles or sticky rice. As you would expect, Chiang Mai has an abundance of restaurants serving authentic local cuisine. In addition, many foreigners who have settled here have opened eateries offering a wide range of international cuisines, from Indian to Italian.

Checking In With Toby Allen
President of the Oasis Spa group

Global Traveler: What opportunities does Chiang Mai offer American investors?
Toby Allen: There are excellent investment opportunities in Chiang Mai because tourism is exploding. Consequently, most of the short-term investment opportunities are in business sectors that serve tourism. For longterm investors, several industries and real estate projects are good prospects. Investors should focus on companies involved in tourism and industries doing the things Thailand does best.

GT: What are the potential pitfalls for foreigners doing business in the city?
TA: Underlying all the pitfalls to doing business in Chiang Mai are the cultural differences. Consequently, foreigners should seek guidance from people who understand the Thai business style. There are risks but the potential for profits is high because the world is rediscovering Thailand and Thailand is stepping further into the modern era. Those who invest in forward-looking established business can eliminate much of their risk. For those who can tolerate more risks, there are unusual ground-floor opportunities. Their key is to find Thai people to work with whom they can trust and create with them a win-win relationship.

GT: What are the significant differences between doing business in Thailand and the United States?
TA: When I moved to Thailand, started a business and purchased a home, the first thing I noticed was the difficulty in owning real estate. The real estate laws for foreigners are convoluted and even vary between Thai cities. Comparing Thai business practices with those in the United States, many basic things are different including tax and liability laws, accounting and business procedures and the attitude toward cut-off dates and deadlines.

GT: How has the business climate in the city changed in the time you have known it?
TA: I’ve seen the business climate radically improve. Recently, the government has enacted laws that require higher health and building standards, which also makes Chiang Mai a more attractive place for travelers. This forward thinking has also made the area more desirable to those who are bringing new businesses into the area.

GT: What do you think will be the key economic opportunities in the future?
TA: In addition to future opportunities in tourism, light manufacturing also looks promising. The increase in local and international flights into Chiang Mai has brought a greater number of both tourist and business conferences to the city from all over the world.We’ve also seen an increase in high-end travelers, which suggests opportunities I find interesting. The combination of cheap labor, favorable government regulations and low construction cost also make Chiang Mai ripe for an increase in light manufacturing.

Just the Facts

Time Zone: GMT+7
Phone code: 66 (Thailand) 53 (Chiang Mai)
Currency: Baht, divided into 100 satangs
Entry/Exit Requirements: Visas are not required for U.S. citizens for stays of fewer than 30 days, though you must have a valid passport and an onward ticket. For longer visits, obtain a visa from the Royal Thai Embassy in Washington (http://www.thaiembdc.org).
Official Language: Thai, though English is widely spoken.
Key Industries: Tourism, manufacturing, agriculture, forestry

INFO TO GO

Chiang Mai International Airport (CNX) is situated less than three miles from downtown. Some hotels offer courtesy buses, or can arrange limousine for you. Taxis are inexpensive. A ride to any of the city’s hotels should cost $5 to $10.