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5-star hotels to take up Hanoi’s market

VietNamNet Bridge – Market survey firms, which believe that more and more
high income tourists would come to Hanoi, have all predicted that more 5-star
hotels would be available in the city by 2015.


Vietnam, 5-star hotels, Hanoi, tourists, tourism promotion, tour fees

Dau tu has quoted the report of the Vietnam National Administration of Tourism (VNAT)
as saying that 1.8 million foreign travelers came to Vietnam in the first 3
months of the year, a decrease of 6.2 percent in comparison with the same period
of the last year.

Meanwhile, according to CBRE, a real estate service provider, 425,000 foreign
tourists came to Hanoi during that time, up by 18.9 percent over the same period
of the last year.

The increase in the number of tourists to the capital city has brought benefits
to local hotels in the context of the economic recession and less spending on
tourism. The hotel occupancy rate has increased slightly by 0.65 percentage
points to 58 percent.

However, the occupancy rates varied for different market segments. While 5-star
hotel room occupancy rate increased by 1.29 percentage points to 61 percent, the
ratio of 4-star hotels decreased by 1 percentage points to 52 percent.

The 5-star occupancy rate improvement has been attributed to the 4.8 percent
room rate decrease, now hovering around $103 per night. Meanwhile, the hotel
room rates of 4-star and 3-star hotels decreased by 4.16 percent and 0.74
percent, respectively to $62.3 and $34.47. This has led to the increase of the
RevPar (revenue per available room) of 3-star hotels and the decrease of the
index for 4-5 star hotels.

According to Savills, also a real estate consultancy firm, Hanoi had 7,750 hotel
rooms from 53 hotels in the first quarter of 2013. The three hotels Golden Silk
Boutique, Lan Vien and Tan Da Spa Resort have just been recognized as 3-star
hotels. The average revenue per room available was VND930,000 in the first
quarter, down by 5 percent in comparison with the quarter before, but up by 2
percent if compared with the same period of the last year.

The yearly occupancy rate remains unchanged at 57 percent, while the hotel room
rate was VND1.64 million per room per night on average, a slight increase of 0.2
percent over the quarter before and 2.4 percent over the same period of the last
year.

In general, the Hanoi’s hotel market remains stable, while there have been signs
showing the increase in the hotel room supply and the upgrading in the quality
to better satisfy the market demand.

Commenting about the Hanoi’s hotel market in the near future, Do Thu Hang from
Savills said 5-star hotels would dominate the market by 2015.

According to Hang, 8 hotel projects would provide 1,400 more hotel rooms to the
market in 2013. Many hotels would be managed by international firms like
Intercontinental, Marriott, Hilton Hotels Resorts and Candeo.

It is expected that by 2015, the Hanoi market would have 1,765 rooms from the 10
out of the 13 new projects, of which 5-star hotel rooms would account for 54
percent.

Richard Leech from CBRE believes that the demand in Hanoi does not change
heavily like other markets thanks to the regularly organized conferences,
exhibitions and other entertainment activities.

According to the International Air Transport Association, Vietnam would become
the third fastest growing cargo and passenger transport market in the world.
This has given more reason to investors to pour money into high end hotels.

Compiled by C. V

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