Twenty or more three-star hotels may be finished nationwide by the end of the year to accommodate the hundreds of thousands of Chinese tourists expected, a realtor said yesterday, adding that 12 hotel operators had expressed an interest in the market.
That will translate into a total investment of between NT$1 billion and NT$3 billion (US$28.9 million to US$86.7 million) at a cost of between NT$50 million per 40-room hotel and NT$150 million per 150-room hotel, King Chiao (焦文華), president of Hsin-Yuan Business Rehouse Co (欣元商仲), said by telephone.
“The investment return can be attractive although it takes three to five years for businesses to break even,” Chiao said.
Thirty to 50 three-star hotels in good locations needed to be developed for Chinese tourists whose room budget ranges between NT$1,500 and NT$3,000 per night, and this could be done by by renovating office buildings, he said.
For example, if an 1,800-ping office building was turned into a 100-room hotel with a room rate of NT$2,000 per night, the return could reach NT$5.4 million — based on 90 percent occupancy. Chiao said. That is much higher the monthly rent of NT$2.16 million, or NT$1,200 per ping, he said.
In Taipei City alone, 1,000 three-star hotels such as Dandy Hotel (丹迪旅店) and CityInn Hotel (新驛旅店) — most of which boast an average occupancy rate of 90 percent — have opened in the past three years, he said.
Twelve operators, including five-star chains Howard Hotel (福華飯店), Grand Formosa Regent Hotel (晶華酒店) and Leofoo Hotel (六福客棧), have expressed an interest in the three-star business, he said. Chinese chains Home Inns (如家酒店) and Jinjiang Inn Co (錦江之星) are also mulling expanding into Taiwan if the rules on Chinese property investments are relaxed.
Not everyone is as optimistic as Chiao.
Jeffrey Huang (黃增福), an assistant manager at Evertrust Rehouse Co’s (永慶房屋) research and development department, said it remained to be seen whether all the Chinese tourists expected — up to 800,000 before the end of the year — would turn up.
Meanwhile, Evertrust Rehouse’s latest statistics showed that the luxury home market in the greater Taipei area began to show signs of stabilizing last month.
The average selling price of luxury homes in Taipei and Taipei County last month reached NT$483,000 and NT$284,000 per ping respectively, down 1.4 percent and 2.1 percent from two months ago, the realtor said in a statement.
The number of deals closed last month increased by 2 percent and 4.2 percent in Taipei City and Taipei County respectively, compared with the fourth quarter of last year, the company said.
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