From Kazakhstan to Abu Dhabi to Makkah, emerging markets throughout the globe continue to be hot targets for the biggest players in the global hospitality sector. This expansion often includes the combination of a hotel or resort with branded, full-ownership residences operated by the hotel manager. While these types of mixed-use projects are commonplace in many North American cities and resort areas, their presence in other parts of the world is relatively novel.
The proliferation of hotel-branded residential projects is driven in part by the robust economic growth of natural-resource rich emerging markets and the resulting wealth creation this has brought. The logic follows that as these markets continue to open and expand, the demand for high-quality hospitality products, often at the luxury and ultra-luxury end of the market, will grow. This demand is coupled with a desire to associate the project with well-known global hospitality brands.
Despite this strong logic, emerging markets pose meaningful structural risks to stakeholders involved in the development, financing, management and operation of hotel-branded residential projects. These structural risks flow from the common reality in emerging markets that local laws/regulations necessary to govern a hotel-branded residential project might be under-developed, untested or entirely nonexistent. Read more
Published in: http://www.hotelnewsnow.com