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Phuket: Hotel twilight – Investors rely on sustainable returns!
Phuket remains a hotspot for hotel investment, with stable land prices and a focus on quality over quantity.
Phuket: Hotel twilight – Investors rely on sustainable returns!
Phuket continues to make its mark in the hotel industry
When it comes to developments in the hotel industry, Phuket is the undisputed leader. Popular spots like Surin Beach and Bang Tao magically attract investors because the demand for high-quality offerings is unbroken here. According to the information from REIC Phuket remains a particularly attractive location for hotels. But what is driving this growth?
An indispensable criterion is the affordable land price, which is on average less than 10 million baht per rai. This makes the realization of 4-star hotels a tangible goal. Particularly noteworthy is the estimated payback period for investments in hotels, which is around 10 years. This makes it easier for investors to expect calculable returns.
Benefits of local investment
Asset Wise is one of the players investing heavily in Phuket. With a land bank of 200-300 rai, including the largest plot in Kamala, which is 105 rai, the company shows that it has a knack for lucrative locations. Hotels are not just a short stay, they generate daily cash flows and can even be converted into financial assets like REITs. The increase in value of land when developing hotels is similar to that of residential complexes, which further stimulates the market.
What the people behind Asset Wise also tell us is that expansion plans in the hospitality industry are not taken lightly. Latest addition: the voco Phuket Bangtao under the IHG group. This shows that the focus in the Thai hotel market is increasingly shifting from quantitative expansion to quality revenue and efficient operations.
Stability despite competition
Even if growth in Phuket is not always rapid, the market remains stable. Many investors are convinced by the strong infrastructure, such as the international airport, as well as the diverse tourist base. However, some changes can also be observed in the investment strategy. Developers are increasingly moving from a “build-sell-close” model to a strategy that relies more heavily on long-term rentals.
Another important point is the cost structure and financial discipline - these aspects play a crucial role in investment decisions. Despite increasing competition, Phuket remains a hot spot for investors due to its global tourism appeal and stability. All we can say is: If you want to invest in Phuket in the coming years, you should keep a close eye on developments!