Profit sharing – a new generation resort real estate investment problem

Period 2014-2019: The financial game under the problem of profit commitment

In 2014, the concept of resort real estate was officially introduced into Vietnam with a variety of types such as shophouses, beach villas, the peak of which is condotel.

According to statistics of the Vietnam Association of Realtors (VARs), from 2015 to 2018 about 30,000 condotel products have been launched into the market. In which 2016 – 2017 is the golden age.

A common feature of this period is that investors race with the problem of committing to profit with a very attractive level, ranging from 8 – 12%/year, higher or equivalent to the bank loan interest rate and higher. double interest rates on savings.

However, after a period of peak development, the resort real estate market has witnessed a slow pace. The main reason comes from the investor running after the financial problem, neglecting the operation management. This explains why the vast majority of projects in this period are self-operated domestically. Due to lack of experience in managing and attracting tourists, the business performance is not good, making it difficult to pay the commitment to profit.

At the climax, Cocobay announced that it broke its profit commitment at the end of 2019. Not having time to “recover”, by 2020 and the first 9 months of 2021, the market fell into a quiet state due to the influence of the Covid-19 epidemic.

Despite many regrets, the early resort real estate completed its historic mission when promoting strong tourism development, improving the quality of accommodation facilities, and meeting the increasingly demanding needs of tourists. . This is also a premise to create a new generation of resort with a firmer preparation step when learning from the previous period.

New generation resort real estate: Returning the essence of resort and tourism

In early 2022, domestic tourism recovered, along with the international opening policy, resort real estate began to accelerate strongly. This is also the period when the new generation of resort real estate is positioned more clearly with many big differences.

Investors also reduce the commitment level under control, fluctuating 5-6%/year, or there is no problem of commitment to profit. At the same time, the investor promotes the profit sharing policy with many different ratios, the highest being 90% (customers) – 10% (management units).

On the other hand, the new generation resort real estate recorded a wave of foreign brands invading the management and operation market share. Major investors have all cooperated with famous global brands such as Best Western, Goco Hospitality, AccorHotels, Marriott, InterContinental, etc. This strategy is intelligently evaluated by the above brands all having standard professional services. international, owning hundreds of branches around the world as a solid basis for the problem of sustainable tourist attraction. This is an important factor to help investors return to the resort market, in addition to the tourism recovery factor.

According to DKRA’s first quarter report of 2022, projects operated and managed by international units recorded a selling price of about 23% higher than projects operated by domestic companies. At the same time, the successful transaction rate is high, accounting for 86% of total sales in the quarter.

In terms of scale, this period witnessed the expansion of billion-dollar projects of huge scale, well-invested in the model of an “all-in-one” multi-utility complex. If in the previous period the resort market was associated with traditional tourist paradises (Nha Trang, Da Nang, Ha Long) or a potential market with a breakthrough in airports (Phu Quoc, Cam Ranh), these markets are now The market has the feature of secondhome, which is 1-4 hours away from the major economic center, which is a boom in supply and attractiveness.

In particular, Ho Tram is a highly appreciated destination of new generation resort real estate. With diverse natural advantages, vast primary Melaleuca forests and the most beautiful pristine beach on the planet as voted by CNN, Ho Tram is a rare 5-star resort paradise in the South with secondhome features.

Thanks to the advantage of being only 1-2 hours away from Ho Chi Minh City and the Southeast provinces, Ho Tram is also a destination to welcome the entire influx of middle-class tourists, creating a great demand for second-home or second-home ownership. luxury accommodation. Not to mention the current limited land supply, only 10km of sea frontage creates scarcity.

In particular, the Charm Resort Ho Tram project complex alone occupies up to 4km, equivalent to 40% of the area’s seafront land bank. The project is invested by Charm Group with USD 2 billion to develop an “all-in-one” model with a variety of utilities, cooperate with wellness spa services with Goco Hospitality – a leading international brand in specialized health care treatments. and Best Western Premier – Top 10 hotel operations management brands in the world.

Thus, with the actual adjustment, “hit” the nature of the market, the new generation resort real estate is expected to create a sustainable development cycle for the real estate market in particular and Vietnam’s tourism in general. .

Doan Phong