Vietnamese five-star hotels see improved occupancy

The hotel segment performed well in terms of occupancy and price in the first quarter this year, the company said. Average room rates were up 21 per cent QoQ and 41 per cent YoY. Revenue per available room was up 28 per cent QoQ and 64 per cent YoY.
Nguoi Dong Hanh online newspaper quoted Do Thu Hang of Savills Hanoi as saying that the good performance of the five-star hotel segment in the first quarter was partly due to strong growth in the number of foreign visitors – a 10-per-cent increase to 1.3 million in the first quarter, with supply unchanged.
“Forty per cent of foreign visitors to Vietnam stay in Hanoi, leading to higher demand for five-star hotels, while supply was unchanged. So existing five-star hotels in Hanoi had to operate under full capacity, pushing the average room rate up,” Hang said.
In 2017, more than 900 new rooms will be introduced, Savills Hanoi said.
Hang said northern cities and provinces, including Quang Ninh, Hai Phong, Lao Cai and Vinh Phuc, have upgraded transport infrastructure and expanded entertainment venues, such as SunWorld He Long Park, to attract customers to resort and hotel projects.
The hotel market has recovered in some northern cities and provinces, Hang said. In Quang Ninh, the three-star to five-star hotel segment has had average occupancy at 60-70 per cent while occupancy of four-star and five-star hotels reached 70 per cent in Lao Cai Province.
With a recovery in the hotel segment, the success of resort projects in the North will depend on design, views and operation mode, Hang said.

Hotel supply up
Troy Griffiths, deputy managing director of Savills Vietnam, said HCM City had the largest hotel supply in Vietnam, with approximately 16,000 three to five-star rooms, 70 per cent more than Hanoi. In 2016, both had similar occupancy rates of approximately 70 per cent, but future supply rates will diverge.
Over the next three years, HCM City expects 3,500 new rooms, a 22 per cent increase. Pressure will be higher in Hanoi, with future supply accounting for up to 50 per cent of the current stock.
In 2016, a tropical and island location makes Phu Quoc an attractive destination and new alternative for international travellers with an arrival growth rate of 40 per cent. Da Nang at over 30 per cent and Nha Trang at 23 per cent also exceeded the growth in international arrival rates of HCM City (10 per cent) and Hanoi (19 per cent).
By 2017, the current Da Nang domestic terminal with its capacity of 9 million passengers per year will be expanded by an additional 4-6 million passengers per year. Nha Trang is behind schedule, with the operation of the first phase of the Cam Ranh airport expansion pushed back from early 2016 to the first quarter of 2018. With 4.8 million arrivals in 2016, the planned capacity upgrade to 2.5 million passengers per year will be insufficient, even given current levels, he said.
According to the government’s master plan, approximately US$5.6 billion in investment is needed for airport infrastructure up to 2020.
“Infrastructure development is a key factor when evaluating hospitality development, particularly as there has been new supply growth of up to 30 per cent per annum over the past three years in Da Nang, Nha Trang and HCM City,” Griffiths said.