Hanoi grows attractive to hotel investors

More hotels have got underway in Hanoi, indicating that the capital city is growing attractive to hotel investors.

Intimex has recently commenced construction on six-star hotel Four Seasons Hanoi at 22-32 Le Thai To Street, Hoan Kiem District, the former site of Intimex supermarket.

The first Four Seasons hotel in the city is designed with 100 guest rooms. Four Seasons is the world’s leading hotel group, which is 47.5% owned by Bill Gates and manages 102 hotels in 43 nations.

At the groundbreaking ceremony of the Four Seasons Hanoi last month, Hanoi chairman Nguyen Duc Chung said the city was running short of high-end hotels.

At 146 Giang Vo Street, about three kilometers from the Four Seasons Hanoi, the two-decade-old three-star Dong Do Hotel has recently been demolished to pave the way for construction of a five-star hotel, also called Dong Do. The VND350 billion project is scheduled for completion within this year.

Some three kilometers from the landmark Hoan Kiem (Sword) Lake, another five-star hotel is under construction on Yen Phu Street as part of the hotel, commercial center and apartment complex Aqua Central Hanoi. Developed by Hanoi Water Tower JSC, the project is expected to go into operation in the second quarter of 2018.

Do Thu Hang, head of research at Savills Vietnam in Hanoi, said the city would have an additional 33 hotels of 3 to 5 stars. Two projects will start service this year, including a four-star hotel with 200 rooms, and five others will become operational in 2018.

Hanoi is looking to promote tourism development. City chairman Chung said the city would build an extra 20,000 hotel rooms in the next five years.

At prime sites in the city a number of office and luxury apartment buildings will be converted into top-notch hotels in the future.

Hang of Savills attributed growing hotel investment activity in Hanoi to the city’s new resolution on tourism development. The capital city will strive to attract 30 million visitors, with 5.7 million of them from abroad, and achieve average hotel room occupancy of 60-65% by 2020.

There is a lot of favorable information that may boost the demand for hotel rooms in the city in the future, Hang noted. For example, travel website TripAdvisor voted Hanoi as one of the 20 cheapest destinations for a short tour in the summer of 2016. In addition, along with HCM City, Hanoi is recognized as one of the 20 most-visited destinations in the world.

According to data of CBRE Vietnam, Vietnam is becoming an attractive tourist destination in Southeast Asia. This is evident in high room occupancy, which reached 75% in Hanoi in June 2016, the highest in five years.

Experts believe high guest room occupancy, rising room rates and a pickup in tourist arrivals are behind investors’ decisions to build hotels in Hanoi.

International tourist arrivals to Vietnam reached eight million in 2015 and surged to 10 million last year. Tuncay Bockin, former general manager of Crowne Plaza West Hanoi Hotel, noted Vietnam even had greater tourism development potential than Thailand, which lures about 20 million international visitors a year.

With more international hotel management corporations arriving in the country, Bockin predicted this market would become more competitive.

Source SGT