Hotel surplus threatens Da Nang

Monday, Oct 19, 2015 09:00

According to the department, as of last June the city had 478 accommodation facilities with 17,671 guest rooms, including 8,393 in one- and two-star hotels. — Photo vietnamnet

Compiled by Le Hung Vong

Da Nang city authorities warn of a hotel construction boom that could lead to a glut in rooms, saying the rapid development of many small hotels could affect the tourism industry and cause an infrastructure overload that could affect people's living standards.

The coastline from Hoang Sa-Vo Nguyen Giap streets to Truong Sa Street is filled with one- to three-star hotels, operational or under construction. But the roads near the beaches in Son Tra District's Phuoc My Ward are the busiest in the city.

More than 20 small hotels and guesthouses are located on a 300-metre stretch of Ha Bong Street, making this narrow street permanently and fully occupied by vehicles of all kinds, including taxis and private cars.

Similarly, the 7.5m wide Duong Dinh Nghe Street in An Cu Residential Area No 2 (a project to resettle families moved out to make way for development projects) is overloaded because of the mini hotels and guesthouses built here in the past decade.

Son, a resident of Phuoc My Ward, said: "This area, which was very quiet in the past, has become crowded and noisy recently after many hotels were built, attracting tourists day and night.

"A number of people in the area had to sell their homes and move to new places."

He said not only were local people's daily routines affected, but they also face the risks of explosion and fire, accidents and crime.

The roads in My An and Khue My residential areas in Ngu Hanh Son District face similar problems. Hotels have been built along the streets which are only 5.5-7.5 metres wide. A resident of An Thuong Road No 30 said infrastructure facilities are now overloaded since many hotels and guesthouses have been built in the area, resulting in problems with water and power supply.

Tran Chi Cuong, deputy director of the municipal Department of Culture, Sport and Tourism, said with the construction boom the hotel industry is causing problems for itself too.

So many hotels mean room rates have fallen sharply, often to less than 10 per cent of normal in the low season, he said.

To minimise the risks, the department has told prospective investors to carry out studies of the accommodations/tourism market before making investment decisions.

According to the department, as of last June the city had 478 accommodation facilities with 17,671 guest rooms, including 8,393 in one- and two-star hotels.

The municipal People's Committee has instructed the departments of Culture, Sport and Tourism, and Construction and the Institute for Construction Planning to conduct a study and draft a zoning plan for construction of hotels in the area to prevent a repeat of the unplanned construction that has led to the current situation.

Foreign dairy prominent

Imported dairy products, worth over US$1 billion a year, account for 70 per cent of the market on average, and their dominance seems set to continue since the tariffs will become zero when the Trans-Pacific Partnership (TPP) agreement become valid.

Viet Nam's TPP accession will see consumers enjoy cheaper milk and other products, though the domestic dairy industry is likely to be broadsided as cheap products will flood the market.

The dairy imports are mainly from TPP members like Australia, New Zealand, and the US.

Trinh Quoc Dung, a manager at dairy giant Vinamilk, said Vietnamese producers would also benefit since the prices of imported dairy raw materials would drop.

According to the Viet Nam Dairy Association, imports of dairy products from Australia and New Zealand have increased relentlessly. In 2013 imports from New Zealand were worth $6.3 million and from Australia, $2.6 million.

The import tariffs are currently 3-5 per cent on dairy raw materials and 7-10 per cent on dairy products, and they stand to be eliminated under TPP.

"There are reasons for foreign dairy products to flood Viet Nam," said Pham Ngoc Chau, deputy director of Hancofood.

Dairy companies believe foreign dominance will only become stronger. After all, even before TPP, many new dairy brands from the US, France, Japan and Canada have appeared in Viet Nam. —VNS

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