About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic.
Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return.
The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel.
Photo courtesy of PWC Taiwan Real Estate
Occupancy rates for hotels in Taipei have dropped below 20 percent, despite a noticeable pickup in May and last month.
Yomi has tapped the local branch of international property broker Cushman & Wakefield to help find buyers.
Cushman & Wakefield Taiwan general manager Billy Yen (顏炳立) last week said that several buyers have shown interest, but are demanding greater concessions than hotels are willing to offer.
On average, sellers would take 10 percent off their asking prices, but potential buyers are looking for discounts of 30 to 40 percent, Yen said.
Leefang Group (李方酒店管理集團), another domestic hotel group, is looking to sell its Royal Seasons Hotel Taipei (皇家季節酒店) on Nanjing W Road and Airline Inn (頭等艙酒店) in Kaohsiung for a combined NT$1.68 billion.
Other international property brokers have also been asked to help.
Colliers International Taiwan (高力國際) said that a resort hotel with hot springs in Yilan’s Jiaosi Township (礁溪) is seeking to exit the market with a price of NT$6 billion.
Medium-sized hotels that lack the support of parent groups are more vulnerable financially and have no choice but to take action to stop losses, said Andy Huang (黃舒衛), researcher at REPro Knight Frank, another international broker.
Some of the hotels cater to Southeast Asian tourists.
Even though the hospitality industry has entered a dormant period, foreign and domestic buyers have expressed interest in taking over ownership, but they do not agree with sellers over prices, citing lingering economic uncertainty, Huang said.
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