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Covid-19 has interfered incredibly in the hotel business in Costa Rica over the last several years. The world watched in awe, and sometimes despair, as everything we knew and loved was uprooted and changed, seemingly overnight.
One of the industries that were hit the hardest by the restrictions and new rules of the pandemic was the hospitality industry. This was mainly due to the travel restrictions, lockdowns, and quarantines imposed by many countries around the world. However, as the global economy has recovered from the damage imposed by the pandemic. Now is a better time than ever to invest in a hotel business or the hospitality industry. The changes that occurred present a unique opportunity for explosive growth in this sector.
The hotel industry is worldwide, spanning the globe from Costa Rican hotels and Lodges to St. John Villas in the U.S. Virgin Islands. However, they all have one thing in common. Since the pandemic practically reached its end-stage and our borders are open again, hotels are gaining business fast. This increases revenues, and massive profits for the shareholders, for those who have been able to hold a strong financial position during Covid-19. In fact, due to the slimming down and streamlining that many of these businesses achieved during the pandemic, now is a better time than ever to invest in the hospitality industry.
Greater Return on Investment
Although some hotels shut down during the pandemic, many stayed open, even when operating at a loss. This forced management to make many changes, such as lower salaries for corporate and other staff. Additionally, they had to lower the variable costs of running the hotel, such as food expenditures.
Therefore, anyone looking to get in at the ground level is to buy now. “Buy low, sell high” is a favorite axiom of any legendary financial genius, and the same holds true for those looking to invest in the hotel business.
With the lifting of restrictions and lockdowns worldwide, the global economy is poised to make a major comeback. And of course, Costa Rica is not staying behind. The New York Times reports that the World Travel and Tourism Council is projecting travel and tourism to reach pre-pandemic levels in 2022, adding two trillion dollars of value to the economy. This number will only continue to grow, indicating that now is the best time in global history to invest in the hospitality industry.
Challenges of investing in hospitality
When you invest in an industry like the hotel business, you get more than just money as a return for your investment. The fun part of getting involved in the hotel industry is the challenges. Here are a few:
- optimizing the net income from each additional room night sold
- hotels trade at higher cap rates than the Big Four CRE asset classes
- property values keep going up, especially those at the beautiful beaches of the country
- You can enhance value through capitalization, renovation, operations, and contract positioning
There is no better time than now to invest in a hotel for sale in Costa Rica, no matter what size. The changes due to the pandemic have lowered costs, creating new investment opportunities. This means that you can ride the wave of global recovery to success, and wealth, and live in an incredible country while doing that.