For accuracy, please read the full master’s thesis in Portuguese; it can be found here.
Maria Rita de Oliveira Nunes d’Angelis published a 2019 Lisbon University master’s degree study that explores the dynamics of real estate-touristic activities in the municipalities of Óbidos, Portugal (including Bom Sucesso Resort, Royal Óbidos, Quinta de Óbidos Country, West Cliffs) and Tibau do Sul, Brazil. It investigates the causes and consequences of failed second-home enterprises, resulting in ruins. The research analyzes the impact of capitalist inconsistencies, private conjectures, and the 2008 global financial crisis on these localities. Financial issues were a major cause in Óbidos, while Tibau do Sul faced diverse factors. The study highlights the vulnerability of the real estate-touristic market when dependent on banking financing and influenced by global instability. Both locations experienced similar outcomes, revealing unmet economic expectations and the sector’s fragility.
The summary of the paper focuses on the Bom Sucesos Resort resort:
The Bom Sucesso – Design Resort, Leisure & Golf project obtained its construction permit in 2004 but remained incomplete until 2017. The resort, spanning approximately 156 hectares, was planned to comprise 601 houses designed by 23 internationally renowned Portuguese architects, including figures like Álvaro Siza Viera and Eduardo Souto Moura. The houses varied from one to five bedrooms, totaling 2,966 beds.
The resort featured a heliport, a Hilton hotel, a dog hotel, a supermarket, convenience stores, a laundry, a hair salon, an equestrian center, a restaurant, and an 18-hole golf course. The unique concept allowed buyers to acquire a home and a living work of art designed by their chosen architect.
Despite ambitious plans, only 338 out of the 601 planned houses were built, and the resort faced insolvency in 2014. The ownership structure was complex, involving entities such as Acordo Óbidos S.A., Bom Sucesso SGPS, the Graça Moura family, Banco Espírito Santo PME Capital Growth, and the Portuguese state through Portugal Ventures.
| Accommodation Units | T1 | T2 | T3 | T4 | T5 | Total | Total Beds |
| Total | 55 | 175 | 210 | 147 | 14 | 601 | 2.966 |
The resort initially benefited from the Agência Portuguesa para o Investimento (API) and COMPETE funds. It was designated a Project of Potential National Interest (PIN), a classification aimed at facilitating large investments. However, it encountered financial difficulties, and the completion of key structures, such as the Hilton hotel, was halted.
In 2014, Onebiz Group acquired BS Villas, which managed the tourist exploitation of villas and the golf course. This marked a shift towards direct tourism use rather than an investment model tied to the resort. Onebiz, a multinational company specializing in franchise management, became involved in the resort’s management. Currently, the resort focuses on tourism, renting houses to temporary users unconnected to its investment, and maintaining the golf course as its primary offerings. Despite ruins in the condominium, customers continue to use the resort’s facilities.
Failure:
According to her study, the failure of Bom Sucesso resort is attributed to various factors:
- Banking Issues: The implosion of Banco Espírito Santo (BES) is mentioned as a significant factor. BES was a crucial partner for financing home acquisitions in the resort. The structural problems in the Portuguese banking sector, characterized by excessive optimism in funding large real estate projects and exposure to bad credit, contributed to the failure.
- Global Financial Crisis: The resort’s emergence coincided with the global economic recession, making it a particularly unfavorable time. The international economic downturn led to a contraction in real estate purchases by both national and foreign investors, as well as a reduction in financing for project continuation.
- Over-Optimism and Mismanagement: Stakeholders point to problems in the initial planning and management of the resort. There is criticism of the resorts’ overemphasis on golf as the main attraction and their strong connection to real estate. Some stakeholders suggest that resorts were managed and promoted by individuals from the real estate sector rather than tourism, leading to a focus on construction and sales rather than understanding and meeting the needs of the tourism market.
- Lack of Diversification: The resorts in Óbidos, including Bom Sucesso, faced criticism for their specialization in real estate-tourism, particularly with a focus on golf resorts. The text suggests that this strategy may have been a wrong choice, as it led to high prices, difficulties in selling properties, and insufficient attractions beyond golf, which impacted the ability to attract a diverse range of visitors.
- Financial Fragility and Dependency on Banks: The financing model, heavily reliant on bank loans, proved fragile. When the banking sector faced challenges during the global financial crisis, it affected the resorts’ ability to continue construction. The resorts were heavily dependent on bank financing for both the construction of infrastructure and the purchase of properties by consumers.
In summary, Bom Sucesso’s failure is attributed to a combination of factors, including banking issues, the global economic downturn, poor planning, over-optimism, mismanagement, lack of diversification, and heavy reliance on bank financing. These challenges collectively contributed to the downfall of the resort project.
Solutions:
The text discusses the future prospects and proposed solutions for the continuation of the projects in light of the ruins of the developments in Óbidos. When stakeholders were questioned about the solution, there was a lack of hope for a short-term resolution. According to the interviewee from the Câmara de Óbidos, the future involves exercising more caution and attempting to sell the resorts, claiming that this situation will normalize. There is a legal gap concerning the insolvency of resorts, leaving uncertainties about who should take responsibility for completing the works in case of bankruptcy.
The interviewee from CCDRLVT mentioned that future projects will be subject to the new legal framework, requiring proof of financial viability for project execution. The recent revision of land policy laws ensures that if the construction of large-scale projects, such as tourist complexes, is authorized and the installation deadline is not met, the land will revert from urban to rural. However, there is no clear legal directive from the Portuguese government regarding what to do with the existing resorts, leading to complex debates and conferences to find a solution.
CCDRLVT is cautious about revising master plans in other municipalities, integrating discussions to anticipate and control situations similar to those in Óbidos, which were ultimately dependent on the actions of the property owners.
All interviewees agreed that any action towards the resorts should come from the private sector, as they are the legitimate entities to handle such projects.
Regarding solutions proposed by resort managers, they leverage the initially implemented tourism facilities, such as golf, hotels, and country clubs, to make the investments profitable, albeit insufficiently. The Resort Bom Sucesso, for instance, resold the tourist operation of the houses to the Onebiz company to make the constructed properties profitable. The resort still offers the built houses for tourist accommodation. Additionally, the golf course hosts national and international championships, accommodating players in the resort’s houses and ensuring all equipment rentals, carts, as well as the use of restaurant spaces.
Other resorts like Royal Óbidos and Quinta de Óbidos adopt similar strategies, focusing on hotels, golf courses, and additional amenities to enhance profitability. The text concludes that these solutions are precarious and do not allow for results as lucrative as when the developments were fully operational.