Hotels drop sales prices as crisis bites
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Hotels drop sales prices as crisis bites

Rebound dependent on vaccine progress

The ongoing tourism slowdown has led several hotels to reduce the price tag on their property by more than usual, says Destination Capital, part of Destination Group.

The difference between the coronavirus crisis and the 1997 financial crisis is revenue dried up during the outbreak without visitors and had to close temporarily, but still had to bear operation costs, said James Kaplan, chief executive of Destination Capital, asset investment and management company.

"If hotels are not the core business, most owners would like to sell them for cash," he said.

Factors leading to lower sales prices are uncertainty about when tourism and the economy will rebound and an affordable vaccine to cure the virus.

He believed the number of international arrivals will bounce back to the same level of last year in 2023-2024.

The recovery will take some time as long as there are no vaccines to revive tourists' confidence, while other travel components are still unfavourable, such as ailing airlines, financial concerns and fear of being kept in 14-day quarantine.

Travel bubbles can attract a small number of foreign visitors, but are not sustainable enough to support airlines and tourism.

Destination Capital aims to have a portfolio of 12-15 four-star hotels in Asia-Pacific over the next 18 months which were renovated, rebranded and repositioned to provide value-added opportunities for capital partners in Thailand and overseas to earn a return.

Hotels that the company acquired with capital partners can then reopen and reemploy people to work in the sector.

Mr Kaplan said Thailand will be the key focus, particularly hotels in Bangkok, Pattaya, Hua Hin and Phuket.

The first investment as a resort property is expected to launch next month.

Destination Capital also aims for Bali and the Philippines which have strong domestic markets and new airports around resort areas as well as Japan for which capital costs are low.

The company targets four-star hotels with 200-250 rooms which appeal to domestic and international markets. This type of hotel is also easy for rebranding.

There might be the opportunity to introduce new hotel brands in Thailand that were imported from China and India to fine-tune new market demand.

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