Grant Thornton Vietnam just released the results of the Vietnam Hotel Survey 2018.
Kenneth Atkinson, Executive Chairman of Grant Thornton Vietnam said, the report this year marks the 15 consecutive year Grant Thornton conducting the only comprehensive research on high-end hotels and resorts in Vietnam.
Continue with last year’s momentum, Vietnam is rapidly growing as a top tourism destination among SEA countries. The country is the 6th fastest growing country in the world as a tourist destination, and the fastest in Asia, according to a report by UNWTO.
Total arrival rose by 19%, from 72 million in 2016 to 86 million in 2017, of which international arrivals increased 29%, and domestic arrivals increased 18%.
The hotel industry, following the increase in number of guest, is receiving massive amount of investments. According to the Ministry of Culture, Sport and Tourism, in 2017 there were 79 new upscale (3-5 star) hotels brought into operation, 10 of which are 5 star, with a total of 101,400 rooms, an increase of 10% over last year. AirBnB, an emerging player in the hospitality scene, is also growing in number of listing, with over 16,000 listing in and around two key cities, Hanoi and HCMC.
Average Room Rate
The analysis of upscale hotels was performed by Star Ranking and Region. By Star Ranking, Room Rate for 4-Star hotels continues to increase, though only slightly by 1%, reaching USD75.2 in 2017. 5-Star hotels have their rates recovered from last year’s decline, reaching USD107.6, an increase of 4.2%.
RevPAR
RevPAR for hotels continues to increase, but with different paces for each star ranking, 7.6% for 4-Star hotels while 5-Star’s is higher, at 10.2%.
Occupancy Rate
Overall, occupancy rate improved by c.5% for both star rankings (4.8% for 4-Star and 5% for 5-Star). However, on the regional scale, the change in occupancy rate was not the same for all three areas. Central region saw the most significant rise in occupancy rate of 7.5%, followed by the North of Vietnam (6.4%) and the Southern region (2.2%).
Profitability
2017 witness a continued improvement of the upscale hotels sector’s profitability. EBITDA increased by 1.7%. This increase was attributed to the drop in Undistributed Operating expenses by 1.8%, while other expenses remained roughly the same.
Regarding guest components, FIT/Leisure travelers and Tour groups accounted for the highest proportions of guests staying at upscale hotels, together they accounted for more than 60% of total guest. The third biggest portion – the Corporate/Business travelers was observed with a slight increase of 0.5% in 2017.
The structure of reservation channels in 2017 remained unchanged from 2016. Tour operators/Travel Agency is the major channel of reservation for 4-Star and 5-Star hotels at c.33%, while there was a slight drop of 1.6% in Direct Bookings and a marginal increase in OTAs increased and Corporate.
On a Star Ranking basis, proportion of guest at 4-Star hotels who booked their rooms via Travel agents and Tour Operators rose to 43.1%, while 5-Star hotels only have 22.7% of its sales via this channel.
2017 saw an increase in the number of hotels who have decided that digital technology is vital to their business to help combat growing competition and to set them apart from those older hotels or those with an older mind sets. Vast majority of the hotels considers Integration of digital technologies into the Hotels services a factor that will change Vietnam hotel market.
Hotels that consider the Integration of digital technologies into the hotels services is a factor that will change Vietnam hotel market.
In 2017, all participant hotels have integrated one or more digital technology into their operation. While digital marketing and using of data mining and analysis have become basic, being used at almost all the 4-5 Star hotels, the trend of applying mobile application for guests personalization and online check in/check out is becoming more and more popular, and increasing quickly, with more than 50% of 5 Star hotels, and 30-40% of the 4 Stars. It is predicted that these digital technologies will soon taking over the industry.
100% of the proceeds raised from sales of the Hotel Survey 2018 by Grant Thornton Vietnam will be donated to Newborns Vietnam.
Copies of Grant Thornton Vietnam’s Hotel Survey 2018 can be ordered by visiting Grant Thornton Vietnam’s website, http://www.grantthornton.com.vn, or by contacting its office in Vietnam. 100% of the proceeds raised from sales of the Hotel Survey 2018 will be donated to Newborns Vietnam, a United Kingdom registered charity in Vietnam, dedicated to reducing neonatal mortality in South East Asia, with a specific focus on Danang, Vietnam.
About Grant Thornton Vietnam
Grant Thornton Vietnam is a member firm within Grant Thornton International Ltd (Grant Thornton International), which was established in 1993 with offices in Ho Chi Minh City and Hanoi and has enjoyed growth and success since its establishment. The firm has 13 Partners and over 230 professionals in two offices, in Hanoi and Ho Chi Minh City, providing quality services in assurance, consulting and development services, corporate finance and tax services, designed to help clients in various industries achieve their business objectives. We operate with the highest standards of professional integrity with solid principles. Our dedication, teamwork and commitment result in a world-class professional service to our clients in Vietnam.