The resort property market in Viet Nam was being fuelled by the tourism boom in recent years, making it an attractive investment channel in the eyes of investors.
Le Minh Dung, deputy general director of BIM Group, one of the largest property developers in Viet Nam, speaks about the development of resort property in 2018.
What are the major factors affecting the development of the resort property market in 2018?
Le Minh Dung
The key factor, which promotes the development of resort property is the significant resort tourism potential of Viet Nam. Tourism statistics are really impressive in recent years. In 2017, the number of foreign tourist arrivals hit the 13 million threshold – a record high.
A new point of the tourism industry in 2017 was the significant increase in spending by local travellers. Five to ten years ago, local travellers mainly chose to stay at popular hotels for their holiday. However, things have changed. Many local travellers now choose luxury hotels and resorts for their stay.
This has inserted a considerable impact on the resort property market. More than 73 million local tourists every year is an attractive pie to investors.
Experts forecast that the tourism of Viet Nam will continue its momentum for strong growth in 2018, fuelled by the expansion of budget carriers, the advancements in tourism technologies and the government’s policies of visa exemption. In addition, tourism demand is improving, thanks to the economic development and increasing income per capita.
Other factors, which might positively influence the resort property market are the macro-economic stability and development; the rising middle-income class, who have idle money and are seeking investment channels; and the improved legal framework.
What is your forecast for the 2018 resort property market?
Along with the rapid development of the tourism industry, the resort property market will continue to be vibrant.
The developers’ policy of guaranteeing profits will play a key role in attracting individual investors. However, in my opinion, buyers will be more wary of these guaranteed returns, which will pull the resort property market towards their real values.
At the same time, through the process of development and selection, the market and investors will certainly have stricter requirements for investment products. Thus, the space for small projects or inexperienced developers will be narrowed, while high-profile projects of prestigious investors with professional services and quality, as well as synchronous planning, will be preferred.
There are opinions that the supply of condotels is exceeding demand. What do you think?
I agree that the supply of condotels in the market is huge, indicating that this segment is going through hot development in recent years. In my opinion, there are several points that need to be paid attention to.
The hottest development and even signs of market saturation are seen in Nha Trang and Da Nang cities, where a number of projects have opened for sale recently. In these two cities, the hotel room supply is already huge, which together with the supply of condotels might result in supply surplus in the medium-term.
Other localities such as Ha Long, Phu Quoc and Vung Tau, despite also seeing strong increases in the number of condotels, have room for development.
In addition, I think the number of high-quality condotels remains limited. Projects, which meet three factors - prestigious developer, renowned and trustworthy operators and are well-planned - will certainly find a firm standing in the market.
In the market of fierce competition, what is BIM Group’s strategy for resort property development?
The leading and only guideline of BIM Group is bringing the best property products and investment opportunities for customers.
In the resort property market, BIM Group will pursue three main goals in the near future.
First, focus will be placed on emerging markets with significant untapped potential, namely Phu Quoc and Quang Ninh. With large tourism potential, Phu Quoc and Quang Ninh will attract more investments in the future and soon become tourism hubs of Viet Nam , similar to Nha Trang and Da Nang.
Second, diversifying products is also an important goal of BIM Group. Our resort property products will target a wide range of customers in different segments. Specially, in our short-term plan, our target is to ensure even mid-level investors can own their own luxury second homes.
Thus, BIM Group will continue to boost cooperation with reliable global and domestic hospitality operators. The success of our recent projects largely comes from this cooperation, which makes us different in the resort property market and creates trust among investors. — VNS