In general, I agree, but it may be much more dynamic than that. The bottomline though is that the chief competition for Pattayaland Soi 3 (Boyztown) is Soi Twilight in Bangkok. I believe I've said this before, but still I don't know whether the business owners of Boyztown realise this sufficiently.
Even in the early days, I remember Pattayaland Soi 1 and Soi 3 to be quite distinct. Soi 1 had (and still has) the smaller boys while Soi 3 tried to be the supermarket with a wide range of boys from small to beefy, and nightly shows at the Cockpit and Boyzboyzboyz. As Sunee developed, Soi 1 suffered, a decline that I have noticed from 5 - 10 years back. (What is the state of the bars there, can anyone update us?)
Yet, the desertion of Soi 1 probably has its effect on Soi 3. Didn't people who liked the Soi 1 type of boys also visit the Soi 3 bars for showtime? In other words, even if they didn't off the boys of Soi 3, I would think they still added revenue through buying drinks. But, as Sunee grew, the same people stayed all evening in Sunee instead. They went less and less to the bars of Soi 1, and lately, it appears that the shows of Jomtien are in a position to cannibalise Soi 3's shows too.
However, this effect, if any, would have been secondary to the chief competition - Soi Twilight.
Over the years, Soi Twilight has been adjusting to market trends while Soi 3 has stayed stagnant. The trends were these: The rise of Asian tourism and the plateauing of Western gay tourism. Asian tourists have different tastes. They prefer more masculine boys, and think that watching a cross-dressing cabaret performer is a waste of time.
Soi Twilight has gradually phased out the small queeny boys (only Classic Boys has them, and not even a majority anymore.) They've also ditched the queeny cabaret shows, and gone the whole hog with bold shows. The last remnant of femininity - using a femme guy in fuck shows - has now disappeared. Nowadays, they use a masculine guy as the bottom.
At Soi 3, they have stuck to the drag queen and cabaret formula, a formula that does not interest the typical Asian tourist. And of course, Pattaya has stricter enforcement against nudity. Hardly any wonder then that between staying in Bangkok for the bold shows and travelling to Pattaya to see drag queens, the increasingly numerous Asian tourists (and Westerners with similar tastes) stayed in Bangkok.
Yet the decline of Soi 3 could have been averted. Soi Twilight had two huge weaknesses - service quality by the boys once off'd and demands for money become worse and worse. Despite the handicap of not being able to put on bold shows, Soi 3 could have fought back on these two fronts to keep itself attractive, but I suspect they didn't know how (exceptions below).
For a while, Wild West Boys showed the way with its more energetic shows with a lower drag queen quotient, but it soon shot itself in the foot with a mamasan that was even worse than the worst of Soi Twilight's.
Then there's Funny Boys. Isn't it interesting that of all the bars in Soi 3, I think people will agree that Funny Boys is probably the only one that's still doing OK? It's the one with no shows and an attention to service - exactly the formula that is needed to hold one's own against Soi Twilight. Yet, my observation is that Funny Boys is getting more farang visitors than Asian, so by that measure, it is still not succeeding against Soi Twilight for the growing market. I guess, by itself, it can never. One bar cannot alone do it. The whole soi needs a critical mass.