Is renovating an old resort
truly more worthwhile than building a new one?
Case Study: Baan Khao Noi, Khao Hua Khwai, Phunphin District, Surat Thani
Experienced hotel business investors often agree that "the most expensive thing in the resort business is the location, not the building." And that is the main reason why buying an old resort in a good location and renovating it often yields significantly better returns than starting from scratch.
1Why renovating is more worthwhile than building new: A comparison of actual costs
Before looking at the specific figures for Baan Khao Noi, it's important to understand this principle. A resort with a good view in a good location has three layers of cost components hidden within its purchase price.
| Cost Component | Build New on a Hill with a Good View | Buy Old Resort + Renovate |
|---|---|---|
| Land on a hill with river + mountain view | 5–15 million baht (if available) | Included in purchase price |
| Building structure for 9 rooms (40 sqm/room) | 6.5–9 million baht | Already exists, only needs renovation |
| Utilities (water, electricity, roads) | 1–3 million baht | Already exists |
| Licenses + architect + construction period 12–18 months | 1–2 million baht + time | Business is already operating, generating income during wait |
| Customer base and reviews | Needs 1–2 years to build | Already exists |
| Total cost for 9 rooms with good view in Phunphin | 20–35 million baht and above | 15 million (purchase) + 6–9 million (renovation) = 21–24 million |
With a budget of 24 million baht, you get land on a hill with a good view that is no longer available in Phunphin + 9 ready-to-use rooms + a customer base and reviews. But if you build new with the same budget, you might only get bare land and a mediocre structure without a good view.
2How location is critical for a resort with a view: What money can't buy
A resort business with a view has a very clear formula: "View = Room Price = Yield". Rooms that open to mountains, rivers, and both sunrise and sunset can command prices that ordinary rooms in ordinary locations simply cannot. And this is something competitors cannot replicate, no matter how much money they have.
3Analysis from actual photos: What renovation budget is needed?
From the received images, comparing the current state of the resort (left) with a possible concept, the investments needed, listed in order of importance, are as follows:
| Total Renovation Budget Summary | Low Budget | High Budget |
|---|---|---|
| Renovate 9 rooms | 1,350,000 | 1,800,000 |
| Restaurant/cafe with view | 1,500,000 | 3,000,000 |
| Landscaping + lighting + signage | 500,000 | 1,000,000 |
| Photography + OTA + Social | 200,000 | 400,000 |
| Swimming pool (if built) | 1,500,000 | 2,500,000 |
| Emergency reserve 10% | 505,000 | 870,000 |
| Total Renovation Budget | 5,555,000 | 9,570,000 |
| Total Cost (Purchase 15M + Renovation) | ~20.5 million baht | ~24.5 million baht |
4What are the actual room rates in the Phunphin and Khao Hua Khwai market?
Based on actual market data (Traveloka / Tripadvisor / Kayak, May 2026), room rates in Phunphin vary widely, and the view is the most critical factor in pricing.
| Accommodation Level | Price/Night | Customer Group |
|---|---|---|
| Budget / No View | 350–600 baht | Business travelers, transit |
| Standard Phunphin (Market Average) | 600–900 baht | General tourists |
| Baan Khao Noi Current | 600–1,200 baht | Not yet optimized |
| Resort with good view, after renovation (Target) | 1,200–2,000 baht | Couples, families, view-seekers |
| Jantara Resort (with pool, main competitor) | ~2,700 baht | Premium Weekend |
| Benchmark Chiang Mai/Khao Yai, similar view level | 1,200–8,000+ baht | Thai and international tourist market |
The target price of 1,500 baht after renovation is still 1,200 baht/night cheaper than the main competitor (Jantara). This means there is still significant "room" to increase prices, and it has not yet tapped into the market that international tourists are willing to pay for.
5How many competitors are in Khao Hua Khwai? How saturated is the market?
Khao Hua Khwai is a small area, and from Tripadvisor and Traveloka data, there are only 3 main registered accommodations in this area, which is very few compared to its tourism potential.
6How many additional rooms can be built on the remaining land?
This is an upside that many investors overlook. Out of 7.5 rai (12,000 sq.m.) of land, if the current structure and common areas are estimated to occupy 2,500–3,000 sq.m., there will be over 9,000 sq.m. of land remaining for development.
7Summary of Payback Period for 3 Scenarios
Assumption: Purchase at 15 million baht + renovation at 7 million baht (mid-range budget, including small pool) = total cost 22 million baht. Calculated from net income after deducting operating costs (~45% of revenue).
The answer to the question "Is renovating an old resort more worthwhile than building a new one?" is clear in this case — yes, if you understand that you are buying an "irreplaceable location," not just a building. And the money saved by not having to build a new structure is the same money that should be invested in renovations to push up room prices.
ProView Living takes you to see Baan Khao Noi right now
Our team will help analyze the figures, check documents, and estimate renovation costs with real contractors, before this view becomes someone else's.
Contact ProView Living
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