Real estate

Thai, foreign investors eager to buy hotels in Bangkok, major tourist cities

AS a result of tourism having improved in the first half of this year both Thai and foreign investors are now keen on buying hotels in Bangkok and four key tourist cities, Phuket, Samui, Pattaya and Chiang Mai, with several deals having already been concluded, Matichon newspaper today (July 27).

Mr. Phattarachai Thaweewong, research director at Colliers International Thailand, said while Chinese investors are interested in buying hotels in Phuket and Chiang Mai, those from the US, Singapore and Japan want to snap up the ones located in Bangkok.

The key issue is reasonable price and attractive location as over 10 million domestic and foreign tourists are expected to travel within the country this year.

Over the past 10 years the total turnover of hotel sales was approximately 99.650 billion baht with transactions during 2017-2018 amounting to 20 billion baht a year with major investors buying both those already operating and under construction, 

Their criteria is over 6% return per annum and that the building should not be over 15 years of age nor less than 10 years.

They also prefer hotels with at least 150 rooms as this would be more worthwhile for them. Most intend to renovate their purchase and bring in a well-known chain to operate it for them.

“The demand to purchase hotels by both Thai and foreign investors is expected to continue this year. Over 20 properties will likely change hands compared to 24 in 2021 and 7 in 2020.

“The number of hotels for sale is usually limited but the Covid-19 pandemic led to many operators both in Bangkok and key tourist cities choosing to sell their business because they could no longer shoulder the financial burden with liquidity drying up,” he said.

After the trading price dropped by 30% last year it has started to edge up this year because owners now see that tourism business is improving. However investors could still buy one at a good price and their purchases could lead to total trading value jumping over 15 billion baht.

However Phatarachai warned investors to be careful as there are still some negative factors that have greatly impacted the real estate sector particularly that both global and Thai economies continue to be slow after the Covid pandemic hit the world.

Yet Thailand remains a destination that many foreign tourists are keen on visiting with hotel business expected to expand in future.

CAPTIONS:

Top: Kata Beach, Phuket. Photo: Mst7022 (CC BY 2.0)

Front Page: Bangkok by night. Photo: Aleksandr Zykov (CC BY-SA 2.0)


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