Starting a hotel from scratch can yield high profits and offer:
- Full control over the business.
- The opportunity to create a unique offering for customers.
However, there are nuances to consider. Building a hotel requires significant investments, including purchasing land in a tourist location. Today, a 'slice of paradise' (approximately 1600 m²) in Phuket starts at $300,000. However, you cannot simply buy the property directly; you will need to register the purchase under a legally registered entity in Thailand.
Be prepared for other challenges as well:
- Personal time investment - meeting guests, addressing check-in issues, customer interactions, and possibly handling repairs. You can either take these responsibilities on yourself or hire staff.
- Internal price competition - due to high competition, neighboring property owners may lower their prices. To attract customers, you may need to adjust your pricing.
- Handling taxes - you are responsible for paying taxes.
Why build a hotel when you can buy an existing business? All you need is to conduct a business audit and verify property ownership. However, there are organizational difficulties. To purchase a hotel, you will need to register a company with two Thai partners. Real estate and land are registered under their names. The starting price for such a property is from $2 million. Don't expect a luxury-class property. The best you can buy is a three-star hotel.
The most profitable investment strategy is the purchase of branded residences. Today, in the real estate market, you can find apartments and villas managed by well-known hotel brands such as Radisson, Movenpick, Marriott, and others.
Such projects attract investors not only with their prestige but also with a fixed rental income of 6-7% annually.
This option is currently very popular among investors, with sales of such residences increasing by 504% over the last two years.
- Property Sold to End Owners: The real estate is sold to end owners, allowing for potential future capital growth.
- Service Included in Maintenance Cost: Services provided by the hotel are included in the property's maintenance cost, ensuring convenience and comfort for residents without additional expenses.
- Use of Hotel Infrastructure: Residents can utilize the entire hotel's infrastructure and services for an additional fee, enhancing their living experience.
- Hotel License: A hotel license enables the investor to rent out the apartments on a daily basis, potentially increasing rental income.
- Design and Finish to Hotel Brand Standards: The design and finish of the residences adhere to the standards of the hotel brand, ensuring a high-quality living environment.
Branded Residences as Luxury Residential Components: Branded residences are a fully-fledged residential component and part of a luxury hotel complex. The quality is upheld by world-renowned hotel brands. We have conducted a review of several branded residences.
RADISSON MAI KHAO BEACH CONDOMINIUM with a guaranteed yield of 6%
Radisson hotels welcome guests daily in 114 countries around the world. In Mai Khao, the network is building a new condominium.
Real estate is being sold under a guaranteed yield program. During the first 3 years, you receive a 6% annual return. After that, profits will be distributed on an 80/20 basis. 20% of the total revenue is shared among pool participants.
Here are the advantages:
- Eco-Designed Green Walls and Roofs: The property features eco-design technology with green walls and roofs. Numerous glass decor elements and an infinity pool complement the tropical landscapes of Phuket's beaches.
- Ability to Host Large Events: The condominium offers the capability to organize large events with two conference rooms and business auditoriums.
- Access to Hotel Infrastructure: Residents have access to the hotel's infrastructure, including free Wi-Fi throughout the property, a children's zone, room service, lobby, fitness facilities, business and lounge spaces, steam rooms, spas, and more.
- Convenience: The location is just 3 minutes by car from 7-Eleven and Jie Daeng store, providing convenient access to daily necessities.
- Investor Bonuses: Investors enjoy a 50% discount on accommodation at Radisson Mai Khao Beach Condominium. Additionally, property owners become members of the Radisson Reward Platinum rewards program.
At Radisson Mai Khao Beach Condominium, you can purchase studios or apartments with 1 or 2 bedrooms.
- Studio with an area of 41 sqm - starting from 8.46 million baht.
- Apartments - up to 26.02 million baht.
The project is expected to be completed in the 4th quarter of 2025.
The management agreement with the hotel is signed for 15 years, and it can be extended upon expiration.
Wyndham Grand Residences, located 250 meters from the sea
The new condominium by Wyndham, located near Wongamat Beach, is owned by a company that operates 9,300 hotels in 95 countries worldwide. Branded apartments in Pattaya are expected to be a good investment.
Here are the advantages:
- Proximity to Terminal 21 Shopping Center: The condominium is located near the Terminal 21 shopping center, offering convenient access to shopping and dining options.
- 360° Viewing Platform: Residents can enjoy a 360° panoramic view from the viewing platform, providing breathtaking vistas of the surrounding area.
- Recreation and Entertainment Facilities: The property offers a range of amenities for relaxation and entertainment, including a golf simulator, fitness center, sky bar, poolside terrace, and a hammock area.
In the condominium, you can purchase:
- 1-bedroom apartments: 27 sqm.
- 2-bedroom apartments: 70 sqm.
- Luxury 2-bedroom apartments: starting from 70 sqm.
- Luxury 3-bedroom apartments: starting from 100 sqm.
Prices start at 4,470,000 baht.
The payment schedule for the condominium is as follows:
- Reservation for 1/2-bedroom apartments: 50,000/100,000 baht.
- Signing the contract: 30%.
- Installments: 30% over 36 months.
- Upon ownership transfer: 40%.
Additionally, the buyer will be responsible for paying insurance, fees for the installation of electricity and water meters, and other organizational expenses, which include:
- Apartment maintenance fee (paid in advance for 12 months): 80 baht per sqm.
- Depreciation fund: 800 baht per sqm.
Condominiums with a view of the Andaman Sea by Best Western
In the secondary market, there are also many offerings. Investors can consider purchasing apartments at Rawai Residence With Best Western Management, a property located on the first line of Rawai Beach.
The condominium represents a blend of Thai, Japanese, and Bhutanese design elements, emphasizing the importance of harmony with nature.
Residents have access to three communal pools, a fitness center, and a 24-hour secured parking facility. Special features of the condominium include:
- Ground-floor units have direct pool access.
- The price includes finishing, plumbing, built-in kitchen, fitted closets, and air conditioning.
- Buyback option - the owner can return the apartment to the developer and receive the invested amount plus an additional 10%.
- The apartment can be sold at any time.
The complex is managed by Best Western as a 4-star hotel. Investors will receive a guaranteed income of 10% for 5 years. There is also an option to enter into a contract for actual rental income. Profits will be shared on a 60/40 basis in favor of the owner. Out of their 40%, the hotel will cover marketing and management expenses.
The minimum annual occupancy rate for Best Western network hotels in Phuket is 60% in the first year of operation, and it increases to 71% from the third year onwards. With such a high tourist flow, the owner can potentially achieve a 12% annual actual income.
Investing in premium-class hotels and resorts in Thailand can yield a guaranteed return of 6-7%. Brands like Radisson, Best Western, Wyndham, and other major chains not only provide premium service to your guests but also relieve you of unnecessary burdens.
