Story :  Gareth Marshall   
Photography : Nakarin Banjerdjin
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From the clothes we wear and cars we drive to the coffee we drink and the phones we use we have all, to differing extents, been branded. Stamped. Marked. Identified. It’s our way of telling others who we are.

The word ‘brand’ comes from the same family of words as burn and brandy and even Shakespeare used ‘fire-new’ where we use ‘brand-new’, so it’s a word that’s always been related to warmth. Perhaps this is why we cling to them so lovingly as they provide comfort and piece of mind, and many often buy the brand, irrespective of the product. It becomes habit and makes purchases easier; you don’t have to think about what you are doing when you buy.

These days brands are so synonymous with the modern age that relatively new brands quickly become part of life, and even language - have you googled lately?

Really though, what it all boils down to is that the brands we choose are a reflection of ourselves, and in many cases they go some way to defining our aspirations. And we buy into it all, willingly.

International branding has found its way to the Thai property market, and even in the face of the political turmoil of the past year sales of branded properties remained buoyant, so Tropical Living invited a group with intimate knowledge of the market to answer some of our questions.

What are peoples motives for buying into branded resorts?

“Differing laws, languages, cultures and currencies combine to make purchasing resort property in a foreign land a difficult decision. A familiar, international brand name is a security blanket. It provides instant credibility and quality assurance at the position level of the brand. Professional and hassle-free, long term management is built in, which is especially important to absent owners, and the branding enhances the likelihood of a good income stream from the investment, with above-average capital growth. A strong brand name also adds considerable caché.” - David Groom

“Most resort properties are sold off plan and the addition of a hotel brand to a resort gives buyers extra confidence of the quality of the product on completion and the brand image help the buyers understand the ambience of the resort on completion.  In non branded properties this can sometimes be hard for buyers to visualize. 

Buying a property which is managed by a professional hospitality management company allows the buyer to visit their property at anytime throughout the year and arrive at a well maintained unit, and enjoy other benefits offered by hotels such as airport transfers, concierge service etc. In many cases unit owners will be offered additional discounts and benefits and receive VIP service. International 5 star branded resort properties are located on prime sites, in accessible locations often with quality ocean front or beach front available. Such sites are more desirable and also make a sensible choice for investment.  Many branded units offer the buyer a leaseback option and controlled usage and owners will receive an income which should cover management costs at the very least and in some cases guaranteed returns.” - Charlotte Filleul

“The strength of Banyan Tree Residences is that our branded properties provide buyers with confidence in the quality of the development (reputation and track record), services (established and operational hotel brand) and management (first-class service).  Branded residences offer investors the opportunity for buyers to diversify their portfolios without worrying about managing the property when they are not there, and branded hotel properties provide owners with the opportunity to rent their property out as part of the hotel inventory.  Banyan Tree Residences offer a hassle-free investment opportunity. Buyers also enjoy lifestyle benefits (amenities and services) which are synonymous with that particular brand.” -  Tamsin Edenbrow

“They buy for the assurance of the lifestyle for which they purchase into, the level of such is set by the hotel/resort brand.” - Anthony Franklin

Have you noticed any significant trend in buyers behaviour?

“In Thailand, internationally branded resort property is comparatively new. Buyers are still generally cautious and selective, and branded product is just one option from many. Location, views, pricing and design are all key decision factors at present. But where the branded property, or brand associated and managed property, fits the buyers specifications, it is selling well; in some cases spectacularly so. This trend has been developing in other countries, where some top-branded, well placed and designed resort property has been sold out on the day of launch.” - David Groom

David Groom

“Within CBRE resort property sales we have noticed that buyers into Asia are becoming more global, which is certainly aided by the fact that international brands are either developing or managing many new luxury developments. Traditionally throughout the Asia region we have seen smaller boutique brands with many expatriate buyers.  Some brands now available include W, Jumeirah, Shangri La, Conrad, Four Seasons and Raffles with more to be launched in 2008. Interest in these properties has been worldwide and buyers have come from Europe, India and North America.” - Charlotte Filleul

Charlotte Filleul

“Buyers interested in branded properties are attracted by the lifestyle and investment opportunities - it’s this combination which makes branded properties so attractive. Banyan Tree Residences offers a fixed return of 6% for 6 years plus 60 days use of their villa, so owners get the best of both worlds.

However, we are now seeing repeat purchases from existing clients, with buyers looking to have more than one property in the same resort, giving them more days to use, more flexibility and more rental return.

We have seen an increase in demand for people looking to invest in resort properties in China and also an increase in demand from buyers from China looking to invest Thailand.

Buyers in general are much more brand aware and are increasingly interested in the security of a brand name as this adds a level of comfort in the process of purchasing a property.” - Tamsin Edenbrow

“Buyers want assurances of the standard of their purchase, this goes beyond just size of the villa and location but also on to management and the on-going services and piece of mind the brand offers.” - Anthony Franklin

Anthony Franklin

What’s the difference between a branded resort and a fractionally owned property?

“With fractional ownership, each resort property is divided into investment units. One property is consequently owned by several different investors. In such a scenario, efficient and professional management of the resort is critical. Brand operators are generally far better equipped and experienced to provide hospitality management services to resorts with fractional ownership components, whether for owners’ use or investment returns.” - David Groom

“To date in the Asia region, branded resort property is usually sold in one of two ways. Either selling villas which are leased back to the hotel with owners receiving a share of the pooled revenue, like Shangri La in Phuket, or selling private residences which are not normally on a leaseback basis, like W Retreat in Koh Samui.  In both cases each unit sold and registered to the individual owner and the income is sometimes shared, but not the ownership. In the case of fractionally owned property owners can only buy a proportion of the property and have no registered ownership. This concept has not been used to date in South East Asia and is more common in US and the Caribbean.” - Charlotte Filleul

“Fractional ownership is different to whole property ownership, and both can work within a branded resort environment. 

Fractional ownership properties were very much the mainstays of beach and ski resorts, but increasingly branded city hotels and branded resorts in exotic locations are now offering guests fractional ownership opportunities. Fractional ownership offers regular guests the chance to own a piece of that brand and a cost-effective way of holidaying in the year’s to come.  It is the first step to owning a property within a resort environment.” - Tamsin Edenbrow

Tamsin Edenbrow

“In the case of Jumeirah Private Island, they are non-comparable. Our homeowners are looking for exclusive second or third homes, whereas fractional ownership would be sought by families requiring a holiday home.” - Anthony Franklin

How much room for negotiation is there when buying a branded resort product?

“Usually not much. The brand operator regards this investment property as hotel inventory, sets the tariff rates, provides all guest and room services, and takes a pre-determined share of the gross revenue it achieves for the owner. Uniformity in design, furnishings and equipment is required, together with acceptance by the buyer of the brand operator’s standards, management systems and conditions. It is not operationally practical to deviate from standard contractual conditions to accommodate the personal requirements or expectations of buyers.” - David Groom

“If you mean price negotiation then we see very little movement, especially in cases where there is a pooled income. My feeling is that buyers who want the best price need to buy early as prices rise throughout the construction and sales process. Those who buy early can also choose the units which have the best locations within the scheme.  I have seen prices being slightly discounted for multiple unit purchases.

In terms of negotiating changes to the planned units there is very little scope. When the product is to be leased back to the resort, even finer details on interior finishing cannot be altered as they must be to the hotel standard and design.  For private residences with hotel management this is often a lot more flexible and in most cases we see buyers altering the unit to fit their specific requirements - no two units are ever the same.” - Charlotte Filleul

“There is little room for negotiation. We have fixed prices and we have found that it works better for all of our owners that way.” - Tamsin Edenbrow

“None with ourselves. We are priced competitively in the luxury market and offer a totally unique purchase.” - Anthony Franklin

What marketing strategies work in your/branded resorts favour?

“Promotion of the brand name, with assurances of professional management and on-going investment yields, combined with personal use rights and other privileges available to the buyer, such as free or discounted use of a wide range of resort amenities not normally available in unbranded projects, from golf course to spas and children’s clubs. Even, in some cases, discounts or personal use rights at other resorts and hotels under the same management.” - David Groom

“Branded resort properties being sold by CBRE currently are expensive luxury items with prices ranging from around 1.5 to over 6 million USD. They need to be marketed professionally with quality international campaigns and materials.” - Charlotte Filleul

“Word-of-mouth is still by far our most effective form of marketing.  Our buyers are our guests and friends of guests.” - Tamsin Edenbrow

“Marketing has been successful as we have marketed exclusive homes with access to a super-yacht Marina, with service and management provided by one of the worlds most recognized luxury hotel brands “Jumeirah” and located on a private island located in the gateway to Phang Nga Bay, Thailand. All this with international infrastructure within 20 minutes including, schools, hospitals, one of Asia’s best golf course Blue Canyon G & CC, and Phuket International airport.” - Anthony Franklin

Can you identify the key markets for the mid-term?
  
“In Thailand, the key short and mid-term resort property markets are Phuket and neighbouring Phang Nga and Krabi, Samui and the Pattaya region. Regionally; Malaysia, Bali and Vietnam, especially Phu Quoc, Nga Trang and the Da Nang area, with India emerging in the mid-term.” - David Groom

“I think we will see buyers from around the world with western expatriates based in Asia still an important group. Europeans find Asian resort property more attractive in general than northern Americans, as journey times are much shorter and the properties more accessible. This market will continue to grow.  Within Asia we will see more buyers including Non Resident Indians, Koreans and mainland Chinese.  Thailand in particular has always been very popular with Scandinavian buyers and this too is an ever growing market.” - Charlotte Filleul

“China, Middle East, India.” - Tamsin Edenbrow

“Although we have sold to 15 different nationalities, the major influence has either been Europeans requiring a winter home or families with ties to Singapore or Hong Kong, be this through business or personal reasons.” - Anthony Franklin

How do you measure the value of a branded resort?

“The value is determined by the perceived quality and market strength of the brand itself. The top, world-wide luxury-level brands can command a considerable premium for resort property, just as they do for their room rates. This could be 30-40% or more. At the other end of the scale, national or small regional, mid-market brands may command little or no premium. Ultimately, the value of branded resort real estate is dictated by its location and market demand.” - David Groom

“The value of the property can be very difficult to measure. Some of the most important factors are the perception of the level of the brand. Even within five star brands I think there is a perceived hierarchy which actually depends on the individual and their own tastes and experiences. Property values are affected mainly by location, which in resort property includes view quality, ocean or beach frontage, beach quality, access roads and accessibility by air.” - Charlotte Filleul

“This is a difficult question as the property can be valued in many ways.  The traditional methods of valuing a branded resort is based on ‘how much income can be generated from the resort property’ which is composed of recurring income generated and how much one can resell the property.

The income method for a branded resort is very similar to an unbranded resort i.e. popularity of the destination, the specific location within that destination, like proximity to beach, quality of product and services etc.  However, the value of a branded resort is very much affected by the strength of the brand, its time in the market place, market-share, plus all the facilities and services that the brand name has become synonymous with and, of course, its reputation.” - Tamsin Edenbrow

“The higher the value seen with the brand relates to the higher the value in the product seen by the consumer. This may be seen in higher prices or, with ourselves, through a relatively short sales period, even through the unrest of the past year.” - Anthony Franklin