Tourism real estate is an investment asset that allows investors to earn attractive financial returns. Find out more about what is tourism real estate and the challenges of investing in this area, as well as the prospects for the tourism real estate market in 2024

Real estate is not only a place to live, but also an investment asset that allows you to safely store money, receive passive income and increase capital. At the same time, tourist real estate offers investors higher returns due to seasonal price increases. Also, this type of investment contributes to the development of the tourism sector.

What prospects and opportunities does the tourist real estate market offer for investors? Details in our material.

What is tourist real estate?

Tourist real estate includes objects that are created to serve tourists. The most common types of tourist real estate include:

- Tourist accommodation establishments, which include hotels, hostels, resort villas, aparthotels, serviced apartments, tourist cruises, campsites and other tourist accommodation.

- Shopping centers and theme parks.

- Resorts are facilities that offer a variety of services to tourists, such as private beaches, swimming pools, and restaurants.

- Heritage and cultural attractions - purchase and reconstruction of heritage and cultural objects (palaces, castles, temples, etc.) for sightseeing tours.

Advantages of investing in tourist real estate

Investing money in tourist real estate has many advantages, the main ones of which are:

- Regular income - tourist real estate belongs to investment assets that provide stable income in the long term. Due to the high demand for housing for tourists, the investor will be able to receive regular dividends from renting out real estate.

- Diversification of the investment portfolio, as well as reduction of financial risks. In addition, investing in several tourist areas can increase the chances of obtaining better financial returns.

- Rising property values mean that investors will be able to sell the property over time at a large profit after several years of ownership or use it as an asset.

- Personal use of real estate - in addition to renting out, tourist facilities can be used for personal recreation.

- Management control – investors can independently control the management of their own property or hire a special company for this. This gives them flexibility in achieving their investment goals.

Useful expert advice

Anton Taranenko is the founder and CEO of Visit Ukraine and Visit World online platforms and the owner of the international development company AntaGroup:

Investing in tourism real estate is becoming increasingly attractive to businesses and private investors. This sector offers many opportunities for profit and a stable source of income in the future.

Increased accessibility of travel and the growing number of people traveling abroad are driving demand for tourism real estate around the world. Investing in tourism real estate is a profitable type of investment, as tourism is one of the most profitable industries in the world.

The main advantages of investing in tourism real estate:

- Constant demand market: tourism is a stable sector of the economy as people are constantly traveling and looking for comfortable accommodation during their trips.

- Rising real estate prices: Tourist cities and resort regions usually have elevated real estate prices due to constant demand and limited supply.

- High rental yields: investing in tourist real estate allows you to generate additional income by renting out housing or commercial space to tourists.

- Portfolio diversification: investing in tourist real estate allows owners to spread risks and reduce possible losses.

- Possibility of personal use: investors may also have the opportunity to use the property during their vacations or leisure time.

Before implementing projects, Anta Group takes into account all liquidity indicators and creates real estate in the most promising locations for successful investments. For example, we are currently building a modern 5-star hotel complex with a unique infrastructure - ANTA Residence Canggu on the island of Bali. We have calculated that it is possible to return our investment by renting out the property in 5-6 years.

We are also currently implementing a project of a business class complex HASAN BEY RESIDENCE in Antalya. The estimated return on investment for daily rent is 9.8% per annum. Another profitable investment solution is our comfort class complex HMG GOLD RESIDENCE. These are 20 apartments with high-quality finishing, in the historical center of Antalya and 3 minutes from the Mediterranean Sea. The estimated return on investment for daily rent is 9.8% per annum.

We chose these locations not by chance, because they have good seasonality, a constant flow of tourists, and an attractive investment climate. These factors provide our investors with the most favorable conditions for generating a return on investment. Turkey and Bali are the most popular tourist destinations in the world. The annual influx of tourists ensures a stable demand for real estate and hotel services, which creates prospects for successful business.

What are the challenges of investing in tourist real estate?

In addition to the advantages, investing in tourist real estate has certain risks that should be considered:

- Volatility of demand - the success of investments in the tourism market depends on tourism demand, which is usually affected by factors such as global trends, epidemics and economic crises. Therefore, investors should be prepared for market volatility.

- Legislative restrictions – national governments can introduce changes in legislation that will affect the ability of investors to rent out their real estate or build new projects. Investors must comply with all local regulations and laws.

- Competition – the tourism market can be crowded with a large number of properties available for rent. Therefore, before investing, it is worth studying the market in detail and improving the quality of services in order to attract more tourists.

Prospects of the tourist real estate market

The tourist real estate market is very dynamic, because it is usually influenced by many factors, so here are some important predictions for investors:

- Orientation to nature - tourists are increasingly interested in untouched territories. The demand for eco-tourism facilities and resorts is expected to only grow. Investors can take advantage of this trend by building properties that meet these demands.

- The importance of infrastructure development - real estate located in a region with a higher level of infrastructure development will have a greater demand from tourists.

- Development of research and cultural tourism - research and cultural tourism is expected to be the most popular in the coming years.

- Increasing demand for domestic tourism – experts predict that due to the Covid-19 pandemic and an increase in local military conflicts, in the future tourists will focus on domestic tourism as well, which may lead to an increase in demand for real estate.

Which countries should invest in tourist real estate in 2024?

  Before buying tourist real estate, you need to analyze the political and economic situation in the country you choose to invest your savings in. It is also important to take into account the stages and rates of development of infrastructure facilities, the availability of quality transport links, tourist flow and seasonality.

Currently, one of the most promising tourist real estate markets is Turkey, because the country leads the ranking among countries with a high rate of annual growth in the cost of housing and is among the five most visited countries in the world. Also, according to forecasts, the tourist flow to Turkey from European countries and from the developed countries of the Arab world will increase significantly in the near future. This means that the investment attractiveness of the state will increase.

Examples of profitable turnkey investment offers in Turkey:

- HASAN BEY RESIDENCE business class complex, Antalya, Turkey. The price of apartments with an area of 53 m² or more (1 bedroom, 1 living room with kitchen, 1 bathroom) is €160,000. Duplex layout 4+1 (4 bedrooms, 1 living room with kitchen, 2 bathrooms) - area from 126 m², price from €307,000. The estimated return on daily rental is 9.8% per annum.

- HMG GOLD RESIDENCE, comfort-class complex, Antalya, Turkey. A complex of 20 apartments with high-quality business class decoration, in the historical center of Antalya and 3 minutes from the Mediterranean Sea. Planning 2+1 (2 bedrooms, 1 living room with kitchen, 1 bathroom, 2 balconies) - area 70 m², price from €169,000. The estimated return on daily rental is 9.8% per annum.

Read here why the Turkish real estate market is an attractive place for investment.

Another promising direction is the real estate market in Indonesia, particularly on the island of Bali. The place is maximally cosmopolitan, multicultural, multifaceted and popularized. These factors provide the most favorable conditions for obtaining income from investments, and it is here that there is a steady increase in foreign investment every year.

Examples of profitable investment offers:

- Premium class apartments in a modern 5-star hotel complex with unique infrastructure - ANTA Residence Canggu, Canggu, Bali Island, Indonesia. The price starts from $135,000 for a studio apartment with an area of 38 m². The projected increase in real estate value after construction is completed is 25%.

Read more about the benefits of investing in real estate in Bali in our article.

More offers from the reliable international developer AntaGroup at the link.

  Investing in tourist real estate can be a profitable option for investors. However, an investor should be aware of the potential issues and conduct a thorough analysis before investing to ensure the success of their investment in this sector.

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Daria Rogova, Head of Insurance at Visit World

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