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Condo Hotel Black And Blues

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Posted: 10 Jul 2014 | 3:59 pm

This week news became public that the Allamanda Laguna Phuket condo hotel operation is planning to cease operations at the end of July.

The property is one of the island's earliest hospitality led residential projects and has operated for close to two decades.

Originally Allamanda came under the management arm of the Banyan Tree resort, though eventually it became a Best Western franchise and more recently was an independent entity.

Early purchasers of the units consisted of both end users and investment type buyers, with many looking for recurring yields under a resort-style set up.

For some owners now, they will be unfortunately left on their own to seek out rentals either directly or through agents.

Reflecting on the situation at a time when hotel branded residences increasingly coming into the marketplace, it's a prudent reminder to potential purchasers that the hotel managed unit they are buying today may not always be a viable investment in the long term.

Here in Thailand issues over difficulty in obtaining hotel licenses for real estate led projects and the potential inability to ensure a certain brand or management can be secured in a condominium structure over the expected lifetime of the property create a certain element of risk.

Investors need to be fully aware of the long-term implications of hotel branded residences and while a good number are well-operated properties, there remains the flip side of the coin as well with possible downside.

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One wonders how long it will be before demolition of hotel buildings start and laguna announce the opening of yet another property development. Laguna is fast becoming a vast housing estate. What next? Golf course to close?
 
John, 13 Jul 2014 | 12:28 pm

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