MOST OWNERS [ IN CHINA ] STILL VALUE THEIR HOTEL ASSETS BASED ON COMMERCIAL / OFFICE / RESIDENTIAL VALUES IN THE NEIGHBORHOOD . THUS , UNREALISTIC PRICING IS ONE OF THE BIGGEST CHALLENGES IN THE MARKET . THE ‘ THREE RED LINE ’ POLICY MAY HELP PROPEL A GENERAL UNDERSTANDING / ACCEPTANCE OF A MORE REALISTIC VALUATION .
– ZOE WU
especially greenfield developments , are difficult to obtain . However , with the guidance of Bank of Thailand , local banks are willing to support their existing owners by extending debt moratorium , and provide additional funding under various schemes such as asset warehousing and soft loans . Some international lenders are not as lenient and cooperative , causing owners to look for alternative funding .
We anticipate a critical turning point in the first half of 2022 , given the reopening of Thailand from November 2021 onwards to welcome high season travels .
Owners who cannot capitalize the first wave of travel demand nor keep the operation lean will inevitably face cost creep and profit erosion . Another subsequent outbreak and movement control could disrupt the country ’ s momentum and reputation , and quickly deplete hotel working capital . The need for additional funding will raise an alarm bell for lenders .
Mandeep Lamba , HVS , India : Debt funding for the sector has dried up , as lenders that were financing hotel projects are now stressed on account of their exposure to this sector and increasing fear of growing NPAs , given the severe drop in the ability of the borrowers to service their debt obligations . Other lenders are considering hotels as high risk and not looking to fund hotel projects . The overall outlook for raising debt currently is rather restrictive and lending , if at all , is at substantially higher interest and tighter terms .
INTERESTINGLY , WE FEEL THAT THERE ARE SIGNS OF ANOTHER CONSOLIDATION OF HOTEL OPERATORS IN THE ASIA PACIFIC REGION . LODGIS HOSPITALITY ACQUIRED THE HOMEGROWN GLOW HOTELS & RESORTS TO EXPAND ITS FOOTPRINT FROM VIETNAM TO THAILAND . IN A SIMILAR FASHION , ANOTHER THIRD-PARTY OPERATOR IN ASIA PACIFIC WAS KNOWN TO TAKE OVER THE THAILAND- BASED HOTEL MANAGEMENT COMPANY TO ENTER THE SOUTHEAST ASIA REGION .
– NIKHOM JENSIRIRATANAKORN
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