Much of the recovery of the hospitality market in Southeast Asia will depend on the opening of China, and Viet Nam is no exception, according to Savills Hotels Asia Pacific.
Although several major international markets have already reached occupancy levels similar to 2019, Southeast Asian markets have only 70 per cent of the 2019 level.
Viet Nam has only achieved 60 per cent of the 2019 occupancy level.
Before the pandemic, China was the largest outbound travel market in the world, with as many as 150 million overseas trips in 2019.
Many airlines have announced the resumption of flights between China and Viet Nam, which is welcome news for the Vietnamese hospitality sector.
Mauro Gasparotti, Director of Savills Hotels Asia Pacific, said, “operations are still fragmented in Viet Nam and certain locations perform better than others."
The recovery of coastal resorts has been slower than anticipated, especially for those that rely on international demand. For example, Nha Trang-Cam Ranh and Da Nang have only achieved 50 per cent of 2019 occupancy levels.
Several hotels in HCM City and Ha Noi have recovered well with encouraging results from business travellers, long-term guests, and MICE groups.
However, room rates in Ha Noi and HCM City are still 15 per cent to 20 per cent less than in 2019.
The luxury segment was resilient throughout the pandemic and continues to perform well, with luxury rate recovery outperforming the overall market.
With the announced resumption of air services from China, Viet Nam’s coastal destinations that are heavily reliant on international tourists can anticipate strong demand rebound in 2023, according to Mauro.
Viet Nam has received increasing attention from international operators keen to establish a brand presence.
Established destinations such as Nha Trang, Da Nang, and Phu Quoc as well as emerging destinations like Ho Tram, Quy Nhon, and Phu Yen are attracting international players.
In the next three years, an addition of approximately 80 branded hotels and resorts are slated to be operational, adding to the existing base of 132 properties.
In 2023, notable openings include Angsana & Dhawa Ho Tram, JW Marriott Cam Ranh, Hyatt Regency Nha Trang, La Festa Phu Quoc Curio Collection by Hilton, and Voco Ma Belle Hotel Da Nang.
Uyen Nguyen, head of consultancy at Savills Hotels APAC, said, “cooperation between developers and hotel operators is beneficial if the process is facilitated and executed properly. Brands bring expertise, a good reputation, and access to extensive marketing and distribution networks, but they also have several requirements to be met. As this is usually a long-term partnership, developers should know their business inside out before approaching hotel management companies,” Uyen said.
New trends are emerging, such as a rise in millennial travellers and travellers with hybrid lifestyles who can work remotely from anywhere in the world, including their favourite holiday destination.
Given tourism’s pressure on natural resources and the environment, there is rising demand for sustainable tourism options. Travellers want to engage in positive practices, including wellness activities, contributing to local communities, and minimising their impact on the environment.
The current market uncertainties had slowed or postponed construction and launches, however, it had also given developers the chance to revamp and advance their business more sustainably, Mauro said.
"We expect an improved recovery after Q1. Overall, we remain optimistic about market potential and look forward to a far more positive year," he added. —VNS