Big selloff of hotels in Chiang Mai - not lack of Chinese tourists but because of so many, official

[greenmonkey]

 

Who is gonna buy a guesthouse/Hotel that has been closed due to not meeting planning regulations?

Hahaha you would be surprised! 5 or 6 years ago my mother-in-law bought a shed of a guesthouse in Australia (30% over market value) that was falling to pieces. The mother-in-law was then denied entry to Australia on her arrival  to start her new life and then subsequently blacklisted (in her infinite wisdom she planned to do all this without bothering with all the boring stuff such as paperwork and visas).

 

As the months turned into years she slowly learnt that the property she had invested her life savings in (on a wim without doing any research or having the property surveyed - again boring... and costs money!) was riddled with asbestos, with no license (to be a guesthouse), that needed all new water pipes laid, had backdated unpaid taxes, did not meet fire regs, needed a new roof, with a partner that forged her son's signature (bought in her son's name), and the same partner that also secretly took out loans on said property which then caused said property to have a caveat placed on it by the bank making it unsellable. And what made her throw away her pension and life savings on a wim.... its simple really. The local fortune teller told her it was a winner!!!!!! Unbelievable.

 

So in answer to your question who is gullible to buy such a guesthouse/hotel with no planning regulations.... my mother-in-law for one!!! And there is likely to be many more gullible fools just like her!

[Saladin]

Lest you misunderstand me, my point is that hotels can be as rundown as they like and can charge whatever they can get but if they find there is too much competition and they can't compete on value then they need to either close down or lift their standards. There is nothing in the Bible that says that there is a God-given guarantee of profit for any business anywhere. Survival of the fittest.

[scottiejohn]

1 hour ago, Saladin said:

either close down or lift their standards.

Or change the use of the building and business to something else that may be profitable.

[cmsally]

1 hour ago, scottiejohn said:

Or change the use of the building and business to something else that may be profitable.

About the only viable use would be a "horpak" and it is almost impossible to get a license for "horpak" in the central city area now.

The issue is not really with the hotel license it is with the building license that was slyly introduced without almost any warning. If it was done fairly then all existing places should have been given the option to get a hotel license prior to, I think it was 2016. As it stands now , those who obtained one in the past are OK but their ground is shaky because most do not have a building license. Now it is required that you have the building license before you can get a hotel license. If by chance a hotel that holds just the hotel license forgets to renew or gets it revoked for any reason; it will be impossible to get a new one without getting the building license.

[cmsally]

3 hours ago, Saladin said:

Lest you misunderstand me, my point is that hotels can be as rundown as they like and can charge whatever they can get but if they find there is too much competition and they can't compete on value then they need to either close down or lift their standards. There is nothing in the Bible that says that there is a God-given guarantee of profit for any business anywhere. Survival of the fittest.

if you look at the occupancy rates, costs and income of many hotels , it is often the cheaper bracket that are most profitable. No one in their right mind would upgrade to put themselves in the middle market. However if you wanted to sell then you would likely find someone stupid enough to buy, thinking they could do precisely that.

[cmsally]

3 hours ago, Saladin said:

Lest you misunderstand me, my point is that hotels can be as rundown as they like and can charge whatever they can get but if they find there is too much competition and they can't compete on value then they need to either close down or lift their standards. There is nothing in the Bible that says that there is a God-given guarantee of profit for any business anywhere. Survival of the fittest.

The assumption seems to be that it is only the most rundown that are for sale. I would say that it is most likely the newer middle market places that have misjudged the returns possible on their investment/debt.