Resort and real estate development firm Veranda Resort Plc plans to launch a branded residential project in 2021 worth B1 billion in Phuket and introduce a co-investment renovation model aimed at struggling owners.
Founder and chief executive Verawat Ongvasith said the Phuket project is in the design stage with an environmental impact assessment report slated for submission by the end of the first quarter next year.
“We expect to start construction by the third quarter of 2021, then we will wait for a recovery in the tourism market before launching residential units for sale,” he said. “The Phuket tourism sector is likely to bounce back in the second half next year.”
The project is located on a 20-rai plot near Laem Panwa in Muang district. The company spent 507 million baht to secure the site a few months ago. The project comprises four-storey towers with a total of 150 hotel rooms operated under the Veranda Resort brand.
Two-storey buildings for hotel-branded residences including condo units and villas are also available with a total saleable area of 5,000-6,000 square metres.
“Covid-19 has driven Thailand to stand out as one of the world’s safest destinations. When vaccines are available, Phuket will attract vacation home demand from foreigners.”
Mr Verawat estimated a positive outlook on 2021 based on a recovery in the tourism industry, assuming a vaccine becomes available in Europe, a key traveller market.
“An influx of tourists from Europe will return quicker than expected in 2021 as they will be able to travel anywhere around the world once they get vaccines, no matter if people in those destinations are vaccinated or not,” he said.
To capitalise on a possible speedy comeback, Veranda will apply a new business model it created during the pandemic by using a new hotel brand, A Veranda Collection, to operate existing hotels which had difficulties during the pandemic.
“Those hotels may face difficulties getting loans for renovation,” said Mr Verawat. “We will co-invest or partly invest for renovations and upgrades to attract foreign tourists once the market comes back.”
Those hotels will be included in Veranda Collection in which existing owners share the revenue with Veranda.
In general, a renovation budget is around 10-20 million baht for a hotel with 50 rooms. The company targets four-star and-above hotels in new destinations like Krabi, Phangnga, Khao Yai and Phuket to expand its hotel portfolio.
Veranda has five hotels including the 237-room So Sofitel Bangkok, 136-room Veranda Resort Hua Hin, 69-room Veranda Chiang Mai, 145-room Veranda Resort Pattaya and 50-room Rocky’s Boutique Resort in Samui.
“A larger number of hotels under our management in various destinations can help us do marketing with voucher promotions more attractively,” Mr Verawat said.
The company also plans to spend 20 million baht to upgrade its Samui hotel, he said.
This article appeared in the Bangkok Post.