Hoteliers are attracted by Vietnamese rapidly growing tourism sector, robust economic development and infrastructure investments, real estate consultancy Jones Lang LaSalle said in a recent report.
With a record 10 million international visitors arriving in 2016 and 20 million being targeted by 2020, Viet Nam is set to generate US$30 billion in tourism revenues by the end of this decade.
The dramatic rise in arrivals has gone hand in hand with significant infrastructure investment: the country spends a larger proportion of its GDP on infrastructure than any other Southeast Asian nation.
This investment is set to lead to 2,000km of new highways, metro systems in Ha Noi and HCM City, and a slew of new airports and expansions.
This is complemented by investments by both State and private airlines to expand and improve their fleets.
It is therefore unsurprising that investors and hotel operators alike are keen to commit to this high-growth market.
Adam Bury, senior vice president, investment sales, Asia Pacific, hotels and hospitality group at JLL, said “With the huge commitments made by both State and private stakeholders into infrastructure and transport linkages, hotel investors are keen to capitalise on the Vietnamese market. 2016 saw record levels of hotel transactions, with the dollar value of deals completed during the year representing 83 per cent of deals completed in Thailand, a market which is often perceived to be significantly larger and more liquid.”
Frank Sorgiovanni, head of research, Asia Pacific, hotels and hospitality group at JLL, said “We have seen an increasing amount of internationally branded hotels open in Viet Nam over the past 24 months, and expect further diversification of hotel management companies and brands in the market.
Viet Nam should not be seen as just a tourism destination, as the country’s rapid economic development, led by industrial manufacturing and production has driven corporate demand in the market.
Further, increased connectivity combined with new hotel product offerings has made the destination ever more important as a MICE destination.
Bury said “Viet Nam’s hospitality industry has progressed rapidly in recent years. We have observed considerate corporate and business demand within hotels across HCM City and Ha Noi as multinational manufacturers have entered the country and relocated staff from other Asian markets on a temporary or semi-permanent basis.” — VNS