The secret of success behind resorts and real estate
In China, an average construction cost for a 200 rooms hotel is roughly $150 million RMB, and for some luxury resorts with unique styles or larger landscape the cost is double the amount. Although the average daily rate of such resort was RMB 1,500 per night, and a 35% gross profit margin with an average occupancy rate of 80% annually was maintained, it still required almost 20 years to payback.
This kind of long payback period is an extremely unpleasant experience for those developers who are used to gaining profits from a buy-to-sell property, yet many of them are still spending huge sums of money on these projects along with supporting facilities in their surroundings. Therefore, here are several resort business models that we have found in the current market, upon the analysis of which the reasons of why those savvy developers invest in such high-risk endeavors are revealed ... read more