Why Real Estate Projects Fail: Lessons from Asia’s Skeleton Structures

Asia’s Real Estate Landscape is Littered with Unfinished Dreams

Many abandoned projects never made it to completion. These “skeleton structures” serve as cautionary tales of what happens when planning, execution, and foresight go awry. A prominent example is the Sheraton Phu Quoc, originally conceptualized in 2016 but now lying dormant in 2025.

Sheraton Phu Quoc Orginal Render

Sheraton Phu Quoc Now 2025

So, why do these failures happen? Understanding the root causes is the first step in avoiding the same fate.

Top Reasons Why Projects Fail:

1. Underestimating Timelines:
Luxury developments are not quick endeavors. Many require 5–11 years from concept to opening. Unrealistic schedules derail even the most promising projects.

2. Poor Site Suitability Studies:
Inadequate analysis of costs, accessibility, and environmental challenges often leads to unforeseen roadblocks.

3. Lack of Feasibility Studies:
Without understanding market demand and financial viability, projects are set up to fail from the start.

4. Unqualified Advisors:
Decisions based on advice from “friends in construction” instead of seasoned professionals often lead to costly mistakes.

5. Insufficient Funding:
Development requires a solid financial plan, covering expenses from acquisition through post-opening operations.

6. Operator Misalignment:
Many developers don’t understand the requirements of hotel operators, leading to clashes and delays.

7. Wrong Team Structure:
Hiring architects before assembling an experienced client representation team often results in inefficiencies.

8. Neglecting Regulations:
Permitting, infrastructure planning, and code compliance are critical and time-consuming but often overlooked.

Conclusion:
Real estate development is complex and unforgiving to errors. However, these lessons can help avoid common pitfalls. Stay tuned for the next blog, where we discuss how to turn these skeletons into profitable opportunities.

Have you encountered or inherited a failing project? Let’s connect below and discuss strategies to revive it!