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PROPERTY

with the Chinese market still to fully recover
to pre-pandemic levels. Occupancy on Phu
Quoc Island is slightly lower, given the
many new properties entering the market
and working to establish their presence.

BARRIERS IN PLACE
Prior to the pandemic, Vietnam posted
steep annual increases in domestic and inter-
national tourism. In 2019, it recorded its
fourth consecutive year of double-digit growth,
with international arrivals increasing 16.9
per cent each year between 2009 and 2019.
According to Savills Hotels, this robust growth
in turn fueled the development of the hospi-
tality industry, primarily in beach destinations
like Phu Quoc Island, Nha Trang, and Da
Nang, which have added 15,000 additional
Coming ashore
rooms every year since 2016.
“This resulted in a two-fold increase in
base supply within six years,” said Mr. Gas-
parotti. “However, the pandemic put a
once more
brake on growth momentum. As a result,
Issues remain, but Vietnam’s hospitality market
hotels in Vietnam are not only facing
is well on the way to recovery. reduced international demand but also
stronger competition.”
| By HOANG TU
Mr. Wong agrees that leisure travel is
still much lower than in 2019 and resort
hough hotel operations are yet to been very strong year-to-date, and in most hotels are therefore still struggling to reach
recover to pre-pandemic levels, overall cases above 2019 levels.” capacity. “Key leisure source markets have
T occupancy reveals signs of improve- Rubix International also believes that not returned to pre-pandemic levels as yet,
ment in the hospitality market, according Vietnam’s hotel and resort market is recov- coupled with fewer flights from these key
to Savills Hotels. “There is no doubt that ering strongly. In the third quarter of this markets,” he said. “Other regional destina-
the hospitality industry will continue to year, Lotte opened L7 West Lake Hanoi tions are also aggressively driving promotions
play a fundamental role in the country, cre- by Lotte, with 264 rooms and 192 serviced
ating jobs and giving rise to new destinations, apartments. This is the fourth hotel under
among other benefits,” said Mr. Mauro Gas- the L7 Hotels by Lotte brand, and L7
parotti, Director of Savills Hotels. “However, Hotels’ first 5-star hotel operating overseas,
for Vietnam to remain competitive, the joining three establishments in South
market must change and update its offerings, Korea. Accor, meanwhile, opened the Novo-
with a focus on local culture and the creation tel Living South Saigon hotel in Ho Chi
of communities.” Minh City, with 175 rooms.
The Savills Hotels report revealed that
ROAD TO RECOVERY city destinations like Hanoi and Ho Chi
Officially opened at a time of great sig- Minh City have performed relatively well,
nificance, when Vietnam had just fully re- with over 65 per cent occupancy. “Vietnam’s tourism industry must also take
opened to international tourism in 2021, Hotel performance is undoubtedly recov- proactive steps to redefine its destination
Ms. Hannah Loughlin, Director of Sales ering in Vietnam but at a slower pace than image and international presence, upgrade
& Marketing at Capella Hanoi, said that hoped for and is quite fragmented, according tourism infrastructure, preserve the natural
as of September it had already surpassed to Mr. Gasparotti. Compared to other desti- environment, and provide better support to
its revenue target for the year as a whole. nations in the region, Vietnam is taking travelers before, during, and after their
“We obviously had challenges in the longer to recover to pre-pandemic levels. journey. There also needs to be better
first full year of operations,” she said. “How- Firstly, this is due to the slow recovery of infrastructure and increased attention to
sustainable tourism. Attention should shift
ever, we are now on course for a record- Chinese tourists, who accounted for over towards sustainability, eco-tourism, senior
breaking average level, measured using one-third of international arrivals in Vietnam living products, and medical and regenerative
the Revenue Generation Index (RGI). We before the pandemic. Secondly, some desti- tourism. However, there is also the possibility
only have 45-47 rooms, compared to the nations are facing the risk of accommodation of succeeding by redirecting some attention to
competition, which has 100-150.” oversupply, which intensifies competition. the entertainment elements of the hospitality
Average occupancy in Sheraton Saigon The report noted that properties in industry. Several aspects of the industry’s
Hotel & Towers, meanwhile, is 10 per cent leisure markets like Nha Trang - Cam global trends should be clearly understood by
both private developers and local authorities,
higher than in pre-pandemic 2019. “2019 Ranh, Da Nang, and Phu Quoc Island are as these will have a profound impact on the
was our best year since opening, so this struggling to improve occupancy. Da Nang evolution of tourism in Vietnam.”
year has seen very encouraging perform- is the leading beach destination in terms
ance,” said Mr. Julian Wong, General Man- of occupancy, reaching approximately 60 Mr. Mauro Gasparotti
ager of Sheraton Saigon Hotel & Towers. per cent. Nha Trang - Cam Ranh has Director, Savills Hotels
“Urban and city hotel performance has achieved about 30 per cent occupancy,

38 | VIETNAM ECONOMIC TIMES | DECEMBER 2023 en.vneconomy.vn