Discount accelerates the market
Unfortunately, for the majority of our citizens, buying a business at famous resorts is a kind of exoticism. For residents of civilized countries, this is normal practice. Foreigners are most willing to invest their money in the hotel business, which, according to Alexander Lesnik, General Director of Hotel Consulting and Development Group, is one of the most stable and developing (growth ranges from 8 to 13% per year). And initial investments in it can be very modest, especially when it comes to a region affected by a cataclysm.
Hotel prices on Phuket have fallen by 2-2.5 times, Maxim Karapetov, PR director of VeskoGroup, told Izvestia. At the same time, this Thai island is of particular interest. Unlike, say, Sri Lanka or India, where the consequences of the disaster are aggravated by the poverty of local residents, Phuket is quite well-off by the standards of Southeast Asia. Therefore, its recovery will take place in a fairly short time.
Moreover, the mass sale of real estate on the island is caused not so much by the need to restore what was destroyed, but by disrupted tourist flows. European governments strongly recommended that their citizens refrain from traveling to regions affected by the tsunami. The owners who rented it out to tenants who did not want to continue their business on Phuket are mainly trying to get rid of real estate. It is unlikely to bring current profit. It is another matter if you have free funds that can be invested during the price decline with an eye to the future. Many enterprising citizens from different countries around the world will want to do such a business. Perhaps our citizens will be among them.
"I have no information that any of our compatriots intends to buy a hotel on Phuket, but that is quite possible," says Andrei Ozolin, owner of the Russian travel agency chain "Last-Minute Tours Store". "A certain part of citizens has serious money, and many of them do not want to invest it in our country. And taking advantage of the opportunity, and even at a bargain price, they may well invest in business in the affected area."
What is left of the tsunami
Perhaps someone will find such behavior strange, since, judging by reports from Phuket, the island was almost completely destroyed. Nevertheless, data from a local online newspaper indicate that the picture is not so sad. Currently, 165 hotels on Phuket and nearby islands that suffered no damage are operating normally. Another 24 hotels, although affected by the destructive forces of the disaster, are still functioning. And only 68 hotels are closed for now.
According to Karapetov, 10-15 hotels have already been put up for sale, with prices ranging from $300,000 to $12 million. But these are large hotels that are unlikely to interest a "modest" investor. Meanwhile, the numerous small hotels with 5-12 rooms that have been put up for sale in huge numbers will be affordable even for far from the wealthiest foreigners.
On the websites of the island's real estate companies, we managed to find dozens of offers priced from $49,900 to $698,600. So what can you buy for that money? For almost $50,000 – a small hotel with several separate bungalows, a kind of huts on chicken legs. For $99,800, a hotel (total area 524 sq. m) of 6 separate bungalows in the Chalong area, which suffered the most from the tsunami, is for sale. More substantial buildings are noticeably more expensive. For example, a hotel in the Patong area (768 sq. m) is $474,000, a 15-room hotel there is $698,600, for $648,700 a four-story building of 8 rooms with a bar and restaurant is for sale. For $249,500 you can buy an unfinished three-story building "Jangseilong".
When to Expect Profit
Experts are confident that over time, when tourist flows to Phuket are restored, the value of these hotels will increase several times. And you can get a profit of 100%. But so far specialists find it difficult to say exactly when this will happen, and they draw analogies with Egypt, which took about three years to revive its tourism industry after the shooting of German tourists in Luxor.
According to Ozolin, the situation with Southeast Asia is somewhat different, and it will take a little more time to fix it. Although if you target your business at Russian tourists, you can develop it in a short time. Suffice it to recall that it was our compatriots who, enticed by low prices, saved Egypt's tourism industry. The same situation could repeat in Thailand. Even now, when tourist flights to Phuket are suspended, operators predict a surge in demand for this destination from Russians - discount lovers.
Those who decide to buy real estate on exotic islands can also take advantage of discount offers from travel agencies. It is enough to buy a tour (from $500 for 11 days) and set off in search of an investment property.
Anna KALEDINA,
Ksenia FINAEVA.