Claiming the country’s hotel business is now in free-fall due to the COVID-19 lockdown it reported that a slew of three to four-star hotels are on the chopping block as property owners run short of financial resources to service bank debts, said the report.
Most of the properties up for sale are in three main tourist provinces Phuket, Krabi and Samui.
The report claims opportunist buyers from Singapore and China lead the list of foreigners who are ready to snatch up property bargains at prices that have dropped by around 50% of their pre-COVID-19 value.
A source in the hotel industry told “Prachachat Business” that hundreds of hotels are now the targets of property funds that have the resources to buy during the crisis when prices are impacted.
But most of the property raiders are only prepared to buy at basement prices well below the evaluation before COVID-19 stalled travel in its tracks. Property websites listed hotel properties in Phuket, Samui, Surat Thani, Krabi and even Pattaya with list prices of B1,000 to 10,000 million, medium-sized three-star properties were selling at B500-1,000 million and small hotels with prices of B50-100 million.
The fire sale will continue unabated as most resorts in southern Thailand cannot rely on the domestic market that at present is the sole saviour for resorts that are close to Bangkok such as Hua Hin and Pattaya.
A property expert warned that cheap sale of hotel real estate would eventually extend to Chiang Mai, Lamphun and Chiang Rai in North Thailand.
In many instances, prices will fall by 20 to 30% lower than the market price, and cashed-up foreign investors are ready to swoop in and snatch up bargains.
As long as lockdown measures and flight bans continue, Thailand’s hotel industry will remain vulnerable to hostile takeovers. If hotels cannot reboot operations soon, they will lack resources to weather the storm until the European leisure travel market gains traction possibly not until 2021.