Vnre.blogspot.com - Despite recent volatility, Vietnam’s hospitality market remains bright for developers and investors if they adapt to market changes and offer innovative products, a property expert said.
“Better medium- and long-term investment opportunities are appearing in Vietnam due to its stunning coastal areas, beautiful high-rise hill destinations and highly populated cities,” said Robert McIntosh, executive director of CB Richard Ellis (CBRE) Hotels for Asia Pacific region.
“A number of projects have been successfully completed and launched over the past years, making Vietnam a promising market for hospitality investments.”
McIntosh said Vietnam’s hospitality industry was becoming more complex, as more opportunities arose.
Developers and investors need to be more proactive, he said during a presentation at Sheraton Saigon Hotel in HCMC last week.
The performance of hotels and resorts in Vietnam had begun to stabilize over the past few months as tourist arrivals increased and business visitors returned.
McIntosh said the country’s growing economy, increased consumer spending, infrastructure investments, political and social stability has supported the local hospitality market with a re-entry of international and local investors.
He noted that the hospitality sector in Vietnam is still a burgeoning industry subject to rapid and constant change.
According to CBRE, Vietnam has still the second highest average daily rate (ADR) in Asia Pacific after Singapore as it reached nearly US$150 in late 2008 but dropped to US$130 due to declines in business clients during the economic slowdown.
In terms of business performance compared to other countries in the region, the country had the largest drop in occupancy, around 25 percentage points from its highest, followed by Thailand around 20 percentage points and Singapore 15 percentage points. However, in terms of revenue per available room (RevPAR) Vietnam’s hotels look more positive as compared with Thailand, Malaysia, Indonesia and the Philippines.
Mauro Gasparotti, manager of hospitality service for CBRE Vietnam, said the change in the hospitality business was partly due to clients with increasing options demanding more.
Gasparotti said the competition was getting stiffer, making the market ready for “more refined products targeting more refined clients”.
Talking about second home market, McIntosh said Vietnam would be able to considerably increase the number of international buyers purchasing coastal projects once the country’s infrastructure and tourist attractions are developed enough to attract visitors for repeated or extended holidays.
He noted that like developing countries, local demand in Vietnam was the main source of business for local hotels and resorts, providing potential for resort and hotel development, thus it was important for developers of new and existing properties to recognize these changes.
“As witnessed in other countries, developers that foresee consumer changes increase their chances of building a successful product that is well suited to the market,” McIntosh says, “Developers that simply replicate existing concepts can face many difficulties in a rapidly evolving market like Vietnam.”
He said economy or budget hotel properties in Vietnam that were still independently operated with limited managerial control, weak branding recognition, and no standard design or services were under threat.
Reported by Dinh Dung/ The Saigon Times Daily