Hotels in Vietnam attract on cost
Unlike real estate in other Asian countries, hotel prices in Vietnam remain fairly democratic. As a result, more and more investors are looking at local properties. The emergence of international brands in the Vietnamese market is also contributing to the increase in demand for complexes.
In the spring of 2023, the American hotel chain Marriott took over the management of seven hotel complexes in Vietnam owned by Vinpearl. Three of these are in three major cities and are already operational, while four hotels are under construction. The properties will be open by 2028. The total number of rooms will be over 1,200.
In early 2023, Singapore-based Lodgis Hospitality teamed up with South Korea’s Hanwha to invest in the tourism sector of several Asian countries, including Vietnam. Lodgis plans to manage around 10,000 rooms in the Asian market by 2025. The company operates nearly 1,950 rooms in Vietnam and Cambodia and owns 11 complexes. US-based Bain is also on the lookout for hotel acquisitions.
Peculiarities of the hotels in Vietnam
Experts note that the attractiveness of Vietnam’s hospitality industry is not only due to low property prices. They see great potential for the development of the tourism sector in Vietnam. The industry is now actively recovering from the pandemic.
According to Savills Vietnam, several hotels in popular areas of Da Nang City were recently put up for sale. These properties are located on coastal roads, making them more attractive to buyers. The main reason for the sale of the promising complexes, analysts say, is that private businessmen own them. The owners could not cope with the consequences of the pandemic and could not compete with the complexes of international brands.
It is worth noting that the profitability of hotels owned by foreign companies is higher than that of local ones. According to the statistics for the second half of 2022, on average, the room prices of international chains exceeded the prices of local hotels by 40 per cent. The occupancy rate in hotels owned by foreign companies was 8% higher than that of local owners. This is due to the well-established system of operating complexes the brands use.
The increase in investment in Vietnam’s tourism sector is due to its strong growth:
– in 2022, the number of domestic travellers was more than 101 million;
– 102 million forecasts for the current period;
– 2.7 million domestic guests booked apartments on the Klook platform in the first quarter of 2023.
By 2023, the tourism sector will have a good recovery momentum not only in Vietnam but also in other Asian countries, according to Nguyen Thi Hoang, director of the platform. He said that the hospitality sector is ready for a quick recovery after a decline in activity during the pandemic.