Hotels for sale Thailand

 Location. Is it centrally located, close to downtown, shopping, a convention center, the beach, mountains, or local attractions? The property’s location will greatly affect its performance, including demand for rooms, seasonality, and the market segments it can attract.

 The property’s condition. Generally, there is less risk involved in purchasing an existing hotel because you can inspect the building and grounds. Is it a turn-key operation that will be up and running fast to start recouping your investment? Or does it need major renovations requiring closure for an extended period?

 The property’s performance. If the property is currently in operation, how is it performing regarding occupancy rate, average rate, and profit margins? How does its performance compare to its competitor set and similar properties in the region? If the property is no longer in operation, why did it shut down?

 The local market. You may have big plans for upgrading the property and charging premium rates, but the market generally decides what travelers are willing to pay. How does the accommodation sector in the area perform as a whole? Is there a glut of supply of hotel rooms or a shortage? Is travel to the region seasonal or steady year-round?

 The property’s reputation. If the property is well-run and has a good reputation, you will benefit from positive awareness and built-in guest loyalty, which will help generate demand. However, if it has a bad reputation, it will be harder to attract guests, and it may take a long time to build a positive reputation.

 Work with a hotel broker or commercial real estate company to find a suitable location and determine if any properties are for sale in the area. When you find a property you’re interested in purchasing, develop a hotel business plan to share with the bank or investors.

 Determine where you can get financing from – personal investments, bank loans, outside investors, or other sources? Remember, you will need capital to not only purchase the property but also to operate it until it becomes profitable.

 Commission a feasibility study – an analysis to determine the property’s potential as a sustainable and viable financial investment. The study should analyze everything from the location and local market conditions to the economic landscape and regulations in the hotel market.

 Review the hotel’s profit & loss statements from the past several years, as well as its accounts, cash flow, assets and liabilities, debts, contracts, and any legal encumbrances. Is the property under a franchise agreement or other long-term contracts? Are there any zoning requirements or hidden requirements you should be aware of? Commission an inspection to evaluate the physical condition of the property and building.

 Work with a financial expert to forecast the costs of renovations and project revenue, expenses, and profitability in the first years of operation. This will include daily rates, revenue from rooms (RevPAR), food & beverage, and other sources, the costs of loan payments, interest rates, insurance, property taxes, and utilities, as well as pre-and post-opening operating costs.

 Labor shortages have been a big issue in hotels in recent years for hoteliers, so you should research the labor market and average wages to determine key staff members to budget for (and consider how you may want to use technology to support your team).

 If everything looks good, a real estate broker can assist with submitting a formal offer or letter of intent detailing the purchase terms, as well as subsequent negotiations.

 If the offer is accepted, financing arrangements will need to be finalized with the lender. An attorney can help draft the purchase agreement and ensure all needed documents are in order. After all conditions have been met on the closing date, ownership will be transferred to the purchaser.

 Buying a hotel is a substantial and complex endeavor that demands careful planning and financial foresight. When assessing potential properties, factors such as the type of hotel, location, condition, performance, local market dynamics, and reputation are pivotal in determining success. Be thorough in the research and discovery process and ensure you find a property to help you achieve your short- and long-term objectives. Do your due diligence when examining past performance and make sure that you’re clear on why the existing owners are looking to sell. Don’t be afraid to ask for help from advisors, consultants, and other hotel industry professionals throughout the process.

 It’s not on the average person’s to-do list to buy a hotel, or sell one, for that matter. Therefore finding trusted guidance and information on how to buy and sell hotel real estate can be difficult or outdated. Whether you’re interested in this topic because you’re doing research on how to go about buying a hotel property in the future, or whether you’re actively buying or selling a hotel at the moment and need to answer some burning questions, or you’re simply curious about the hotel real estate market and the hotel industry itself - this guide will put you on the right track.

 The first thing anybody needs to know about hotel investment is that hotels are unlike any other properties. It is a real estate property but it is so different from any other property type.

 What exactly is 'real estate'? The definition says that it is tangible assets such as land parcels and improvements on the land (e.g. buildings or fences) which are immovable and permanently attached to the land. When a real estate asset is purchased it comes with a bundle of rights. Mastering real estate concepts, valuation in particular, is one of the key ingredients for industry leadership in the hotel industry.

 Hotels have a complex operational aspect and depend highly on guests to decide a lease per night (accommodation rental per night) compared to a one-year lease apartment or even a 20-year lease of an office for example. This makes hotels unlike other properties and highly responsive to changes in the market. They can take full advantage of a busy period or diminish the risks of a low season period. Hotels can also organize capital or operational improvements in a faster way compared to other sectors.

 Full-Service Hotels: From luxury brands and resorts to upscale and midscale brands. These hotels offer many services and amenities like on-site retail, spas, meeting rooms, restaurants. These hotels will generally require a large volume of staff and depend heavily on the existing competition on the market. This category includes hotels like Four Seasons, St Regis, Aman, Marriotts, Hiltons and Wyndhams.

Hotel for sale Thailand

 Select-Service Hotels: This is a category between full and limited-service hotel offerings. They have some limited services like in the Limited-Service properties but still have a subset of the services you could find in a full-service property. This category includes Aloft, Hilton Garden Inn, Hotel Indigo, Courtyard.

 Limited-Service Hotels: Hotels without a restaurant or banquet facilities but they may still provide certain services and amenities like swimming pools, limited space and fitness centers. e.g., Comfort Inn, Hampton Inn, Fairfield Inn

 Extended Stay Hotels: They provide temporary housing and cater largely to families undergoing relocation and business travelers on long assignments. They offer larger suite-style rooms with at-home features such as kitchens and access to laundry. They also offer discounted rates on longer stays. This category includes hotels like Embassy Suites, Extended Stay America, Hilton’s Homewood Suites

 To track the performance of a hotel there is some key data that are relevant. Average Daily Rate or commonly referred as ADR and Revenue Per Available Room or RevPAR. ADR is the measure of the average nightly rate paid for rooms at a hotel and is calculated by dividing room revenue by rooms sold over a particular period of time

 RevPAR, or revenue per available room, is calculated by multiplying the ADR by the occupancy rate. Investors can also think of it as the total room revenue divided by the total number of available rooms.

 RevPAR complements ADR because while ADR only considers the average rate of rooms sold, RevPar takes into consideration the number of rooms that were actually occupied at that rate over a given period.

 Hotel owners and operators use daily, weekly, monthly and annual RevPAR trends to gain insights into factors impacting the hotel’s performance. Even better, comparing a hotel’s RevPAR over the last year to the RevPAR of competitor hotels can provide a powerful metric for analyzing the performance and competitiveness of any hotel over a given period.

 Hotels focus a lot on the performance of their “competitive set”. This is because guests tend to make lodging decisions in real-time and weigh factors such as cleanliness, service, amenities and location relative to certain moving demand drivers (events, offices, restaurants…).

 Two main groups of consumers drive the majority of hotel demand: business travelers and tourists. Business travel tends to boost demand from Sunday through Thursday. While tourists drive demand on weekends and during peak holiday seasons.

 Demand is also seasonal like ski resorts that will experience peak occupancies during winter, while hotels near convention centers can expect high demand during key events. Therefore, ensuring quality operating partners is essential to drive top-line revenues and create the optimal mix of business in any specific market. Equally important will be a hotel’s ability to convert top line rooms and food and beverage revenues into bottom line net operating income.

 An obvious starting point could be the personal perspective, however, investors need to resist the urge to make investment decisions solely based on what hotel experiences they find attractive.

 Looking at price matters. A budget hotel at a great price may be a far more successful investment than paying top dollar for a world-class hotel.

 So before investing in a hotel you should review demand drivers, make sure the hotel brand is the right fit for you, evaluate the hotel’s management and consider potential cash flow and tax benefits.

 As an investor you should consider the risks associated with investing in hotels. Indeed, to begin with a hotel is not like any other real estate property. You need to do your homework and gather the right data.

 Developers do not build a hotel and then think about how to fill it with guests. Instead they design hotels around customers.

 This will allow you to make an informed investment decision. It is also essential to understand the current positive economic forces: employment situation, consumer confidence, the rising of retail consumption.