Love hotels- A New Adventure

“Love Hotels” Emerging Opportunity?!

There is a chance that our Indian investors might get enticed in this venture as it is very lucrative. With a majority of Indian population in the youth segment we are ideally poised to get into the love hotel industry with the boom in real estate and property development boom.

I believe this is an ideal opportunity for Finance profesionals to get into with Structured products suited to cater to the varied investor class.In this way we can reach out to the retail class to grow. In recent years, and as Japan continues to change, the love hotel business has drawn the interest of the structured finance industry. Several transactions have been completed in Japan where the cash flows from a number of hotels have been securitised and sold to international investors and buy-out funds.

Love hotel is ideally suited for amorous couples who want to spend time together. Rather than get hardon in public places likes beaches and parks this kind of facility offers ample scope and more privacy. This is already a hit in the Asian countries like Japan,Korea and Taiwan with lot of investors showing appetite for these emerging opportunities.

In the concrete wasteland of the modern Japanese city, the love hotel stands out as a refreshingly off-the-wall escape from conformity, a monument to hedonism, and a libertine's paradise.Love hotels are right there from budget to the swanky in Japan where in every need of the customer is taken care of. These kinds of boutique or fashion hotels are easily identifies by there different looks. With the right ambience and soothing atmosphere customers are bound to have a whale of a time. More over the quick turnover ratio brings in more profitability as the rooms are not occupied for more than 2 hours. So this translates to higher rental and better margins for hotel owners.

The above hotels provide total privacy .

A closer view will let you know that there are no windows(left pic) and provide multiple entry exit points(right)

A typical overnight cost about 8000 yen which can shot up during weekends. A surprise is that there is no visible receptionist for that added comfort zone. Ocupancy rate are known to zoom during festival times and Christmas and New year are great excuses to jump on from romantic dinners to Love hotels. Guest choose room by selecting the available rooms themselves and pay to a invisible person. Rooms vary from pink cadillac to Romantic reds.However strange the theme may be a Love Hotel caters to the requirement.

This can lead to high cost in the intial stages which can be recouped as the theme cathces fire.So a well advertised theme will sell well.More over themes need to be changed to capture the attention on the season.

But the cons factor is that this is a high risk area and this can lead to cartalisation by the organized crime gangs. This can affect a hotels reputation which can potentially drive away customers. This can be more suitable for BIG guns with the right connections. More over it depends on the the law of the land to allows such kind of open culture as it might seem "against customs and ethics"

So given the current sentiments that prevail the opportunity is beckoning but the risk far out-weighs against the pros.

What about the so-called "family values" crowd harping about morality?

Hey, the mindset here is if you're old enough to pay, you're old enough to play.

**This article is mainly for information sake**

**This writer has sourced information fromthe web solely for knowledge dissemination sake.Not for profit**