Vietnam luxury hotel market becomes ‘hotspot’ in SE Asia

As luxury hotels prosper, more and more investors are pouring capital into the sector.



The high growth rate in the tourism sector and strong investment growth in Vietnam has created a new momentum for the hotel service sector, helping it gain a new record revenue of $15 billio.

In 2016, Vietnam served 10 million travelers, an increase of 26 percent over 2015. The tourism sector made up 6.6 percent of GDP, while the figure is expected to increase to 10 percent in 2017.

According to CBRE, the indexes of both the hotel room rate and hotel room revenue in Vietnam both increased in 2016. The hotel room occupancy rate in Hanoi was 75 percent, rivaling the Number 1 position with Bangkok of Thailand, while it was 65 percent in HCMC.

A Savills Vietnam report shows that in the fourth quarter of 2016, though the hotel room supply increased by 5 percent quarterly, the room occupancy rate rose by 4 percentage points yearly. It is expected that in 2017, Da Nang would have nine 4-5-star hotels with 2,200 rooms to join the market.

JLL has recorded a series of hotel M&A deals in 2016. One of them was the Mapletree purchase of Kumho Asiana Plaza from Kumho Industrial and Asiana Airlines in a deal worth $215 million.

The other big affair made in the year was the transfer of Duxton Hotel Saigon from Low Heng Huat to New Life RE, worth $49.4 million.

JLL predicted that many large M&A deals would be made in 2017.

The prediction that about 200 sea tourism projects would be licensed in 2016-2030 has caused analysts to believe that the resort real estate, tourism service, restaurant and hotel markets would be bustling with the expected arrivals of many international hotel brands.

Vietnam, for example, has seen many Japanese brands such as Rounte Inn Group, Super Hotel, Kuretakeso and Azumaya Hotel with a series of hotel chain projects in Hanoi, Da Nang and Hue.

Starwood has announced that it would open six new resorts and hotels in Vietnam.

Route Inn Group from Japan last April put Grandvrio City Da Nang, a 4-star hotel, into operation. The VND400 billion hotel is expected to be the first that the Japanese hotel group will launch in the mid-end hotel segment.

Thanh Mai / vietnamnet