Investment in Hospitality
Investment in Hotels has traditionally been in the domain of super rich class or large business houses. Thanks to International market specifically UAE and Europe who opened this Asset Class for larger marketplace, where one can fulfill the dream to own Hotel Suite or Resort Room and Resort Villas.
Few simple steps to understand investment in this asset class:
- Buy / Invest in a Hotel Room, like one does in Showroom, or office space or apartment or second home (hill stations / beaches…)
- This Asset also gets registered in investor’s name, like in any other asset, so principal investment remains intact in perpetuity,
- This Asset Class shall be managed by International Brand, who bring in rich experience in managing and operating the Hotel
- Investor, shall mandatorily leases back to brand who shall ensure long term sustainable business revenues as project partners as opposed to just “buying a second home and taking on the hassles of maintenance”.
- Key difference in this Asset Class, vis-à-vis any other format of real estate:
- No Hassle of Maintenance
- No Maintenance Fee
- Leased in perpetuity to Hotel Brand and enjoy revenue share as opposed to profits share
- No risk of lying vacant (unlike shop, apartment, second home or office)
- Capital appreciates as property becomes operational and managed by operator
- Only market risk is occupancy of hotel, which could vary from 50% to 70%, so there is “no case of no revenue” Price is benchmarked with lower band of occupancy
“India shall soon see surge in hospitality segment as there is huge potential in this sector, which is currently operating at the lowest possible occupancy and is being run at sub optimal level. “Swiss International” shall bring in best of hospitality experiences and investment concepts to organize this asset class, which is proven worldwide…. Now in India @Kandaghat, Himachal Pradesh”