High-end hotels see drop in occupancy rate as 2-, 3-star hotel supply increases
VietNamNet Bridge - While the number of travelers to Vietnam has been increasing rapidly, the number of guests staying at high-end hotels has not risen.


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The number of foreign travelers to Vietnam increased from 7.9 million in 2015 to 10 million in 2016. In the first eight months of the year alone, Vietnam received 1.2 million foreign travelers, an increase of 35.1 percent compared with the same period last year. 

In principle, the increase in the number of travelers will have direct impact on accommodation services. However, high-end hotels have not felt the impact.

A report from Grant Thornton released in July showed that foreign travelers to Vietnam tend to stay at 3-star hotels rather than luxury ones.

In principle, the increase in the number of travelers will have direct impact on accommodation services. However, high-end hotels have not felt the impact.

In 2016, the number of foreign travelers to Vietnam increased by 26 percent. However, many of them did not stay at luxury hotels as they had many choices for 2-3 star hotel rooms. 

Tao Van Nghe, president of Odyssea Hospital, which runs the Liberty hotel chain, luxury hotels also have to share their customers with serviced apartments as well.

Therefore, despite the higher number of travelers, the occupancy rate has decreased and room rates increased at luxury hotels.

Grant Thornton found that the average room rate at 4-star hotels was $75/room/night in 2016, 3.8 percent higher than in 2015, but still lower than the $87.2 rate in 2014.

As for 5-star hotels, the room rate was $104.4 on average, lower than the 2015 $106.8 rate and 2014’s $110.1.

2016 was the year that marked the recovery of the hotel sector with improvement in the high-end hotel capacity. 

However, as the supply of high-end hotel rooms is expected to increase significantly, the competition among high-end hotels will be fierce. More than 90 percent of polled 5-star hotels said the new supply was their major concern.

Hanoi and HCMC are the main sources of high-end hotels. HCMC is expected to have 3,500 more rooms from 13 hotels developed by private investors in the next three years, and nine of them are luxury hotels.

In Hanoi, according to JLL, about 3,000 rooms at 12 hotels will join the market, most of which will be in the high-end market segment.

Analysts noted that Samsung has been a big client of high-end hotels in Hanoi. Tony Chisholm from Accor Hotels in Vietnam said Samsung sometimes orders 3,000-4,000 rooms at the same time.

Samsung may think of building hotels in Vietnam as it did in other markets, adding even more rooms to the supply.


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Thanh Mai

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