Vietnam hotel industry records growth

Record growth in visitor arrivals, hotel occupancy and room rates and an increase in interest from major hotel groups all occurred in 2006, according to a new survey conducted by financial and accounting firm Grant Thornton Vietnam. Five-star hotels in Hanoi and HCMC recorded significant increases in average room rates and occupancy rates last year, the survey said.

Northern Vietnam remained the market leader in terms of occupancy with over 70% in 2006, according to Grant Thornton’s annual Vietnam Hotel Survey 2007. Grant Thornton surveyed 29 hotels with 3,946 rooms in different cities in three main regions of the country during 2005 and 2006. This third survey by the firm serves as an overview of hotel industry market and reports how Vietnamese hotels are performing. The survey showed a price increase in the average room rate of 7.7%, from US$55.78 in 2005 to $60.06 per room night in 2006. Average prices saw an increase of 21.1% in the North and 15.7% in the central region while the South saw no change. In 2006, average occupancy and price of five-star hotels were 73.1% and $69.06 per room night, respectively. Net income as a percentage of revenue of four - and five-star hotels was 21.1% and 39.7%, respectively, much higher than the 0.4% of three-star hotels. Room sales made up more than 60% of total revenues in both 2005 and 2006. Reservations via the internet, travel agents and tour operators increased, from 44.76% in 2005 to 57.35% in 2006 (as a percentage of room sales). A significant decrease occurred in direct reservations, from 41.21% to 29.80%. Favourite destination Survey results indicate that Vietnam is becoming a more appealing destination for Asians and Europeans. An important trend was the strong 6% increase (from 77% in 2005 to 81.6% in 2006) in international arrivals reported by hotels participating in the survey. Foreign visitor arrivals in 2006 reached 3.6million, of these, 22.7% were business travelers, and 59.9%, tourists. East Asia remained the largest international market segment for Vietnam’s tourism and hospitality industry, accounting for 38% of total international arrivals. Of the 18million Vietnamese tourists who traveled within the country in 2006, many stayed at luxury hotels, the survey discovered. Domestic tourists in 2006 generated $2.25billion in tourism revenue. Grant Thornton said the lack of new hotel development since the Asian financial crisis had finally caught up with demand, resulting in a lack of rooms at certain peak times in both Hanoi and HCMC and particularly around the APEC summit meeting in November of 2006. This shortage still exists, the firm said. The survey shows that hotel developers and operators are now showing renewed interest in the market in the five-star hotel, resort and spa sectors. Such groups include Kingdom Hotels with the Raffles, 4 Seasons and Movenpick brands, Banyan Tree, Colony Resorts and Intercontinental. With the huge volume of money being channeled into investment funds focused on real estate investment in Vietnam, a number of sales of interest in major hotel properties that took place in the last two years included the Hilton, Sofitel Metropole and Guoman in Hanoi, the Duxton and Omni in HCMC, and the Furama in Danang. The group Accor Hotels continues to dominate the scene as the group has the largest number of city hotels and with the Six Senses/Evason spas/resorts under its management.

VinaLand is the largest hotel investor in the foreign-invested sector, according to Grant Thornton. Hotels participating in the survey are located in the cities of Hanoi, HCMC, Halong, Danang, Hoi An, Hue, Nha Trang, Phan Thiet, Vung Tau and Dalat.

( Source : Vietnam News )


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