Vietnam is attracting luxury hotels, creating space for resort real estate recovery

Tourism returned to near pre-epidemic levels

Vietnam’s tourism market has continuously recorded positive signs in recent times. According to the socio-economic report for the first quarter of 2024 published by the General Statistics Office, gross domestic product (GDP) in the first quarter is estimated to increase by 5.66% over the same period last year, higher than the growth rate of the first quarter of the years 2020-2023. Of which, the service sector increased by 6.12%, contributing 52.23% to the increase in total added value of the entire economy.

Trade activities were vibrant, the tourism industry recovered strongly thanks to the effectiveness of favorable visa policies and tourism stimulus programs, and export turnover of key products increased.

From the beginning of 2024 until now, Hanoi, one of the key cities in tourism, has welcomed 6.5 million visitors, an increase of 11% year-on-year. Of which, international visitors reached 1.4 million, an increase of 40% year on year; Domestic visitors reached 5.1 million, up 5% year on year. The increase in tourist arrivals has opened up great opportunities for the hotel industry. Especially when this number is only 87% of the 2019 figure, meaning the market still has room to develop.

Mr. Matthew Powell – Director, Savills Hanoi, assessed that domestic tourism, including leisure and business travel, contributes largely to this effort. Room occupancy in markets like Hanoi in particular is considered quite good, at 65% in the first quarter of 2024, an increase of 1 percentage point quarter-on-quarter and 7 percentage points year-on-year.

Regarding the source of international tourists coming to Hanoi in the first 3 months of 2024, the market recorded 4.6 million arrivals, an increase of 72% year-on-year and 3% compared to the first quarter of 2019. Leading the way is Korean visitors with 1.2 million visitors, up 150% year on year. Followed by Chinese visitors with 890 thousand visitors, 6 times higher than the first quarter of 2023.

Mr. Matthew Powell said that although the number of Chinese visitors to Vietnam is relatively stable compared to other markets in the region, it is still considered less than in the pre-pandemic period. However, the market has a more diverse source of international visitors, including Japan, Malaysia, Australia, Thailand, Cambodia and the US.

In particular, the growth in the number of Indian visitors is also remarkable. Currently, the market has received a large number of flights from major Indian cities to Vietnam, and it is expected that in the future there will be more direct flights to meet Vietnamese tourism demand. Nam is rising from Indian tourists.

“Vietnam has achieved remarkable achievements in revitalizing the tourism industry, with great tourism potential, meeting diverse travel preferences of tourists such as natural landscapes, from cities to mountains mountains, from blue sea and white sand to lively primeval forests, accompanied by cultural values ​​and attractive cuisine. With its advantages, Vietnam is attracting the attention of luxury hotel chains, creating more room for the recovery and development potential of the tourism industry in general and resort real estate in particular” – Director of Savills Hanoi commented.

There are not many 3-star hotel projects left in Hanoi

In addition to the strong recovery of the tourism industry, the performance of the 4- and 5-star hotel segment is also growing strongly, while the supply of the 3-star hotel segment is gradually disappearing from the market.

Based on information from Savills, hotel supply in the first quarter of 2024 recorded 11,120 rooms from 67 projects, down 1% quarter-on-quarter. However, with two hotel projects officially granted 4-star status and four projects officially granted 5-star status in 2023, supply recorded an 8% year-on-year increase.

Commenting on the supply distribution of the hotel segment, Director of Savills Hanoi commented that the trend is gradually shifting to the 4 to 5 star hotel segment. The market has recorded closures for poor quality supplies.

In fact, in the past year, Hanoi welcomed the reopening of many 5-star hotels such as Movenpick, or soon Hilton and Fusion hotels. Some other notable 5-star projects include L7 Westlake, Dusit Tu Hoa Palace, The Ritz Cartlon, Four Seasons, Waldorf Astoria Hanoi and Fairmont./.