The global hotel and resort sector is recovering well from the COVID-19 pandemic with improvements on occupancy and room rates, and Vietnam is no exception, Mauro Gasparotti, director of Savills Hotels Asia Pacific, said.
The performance during the summer vacation period suggests a positive outlook.
Coastal locations such as Bà Rịa-Vũng Tàu, Hồ Tràm, Đà Nẵng, Nha Trang, and Phú Quốc performed well, largely due to the return of domestic travellers. Occupancy reached 50 per cent to 70 per cent in some resorts.
However, for performance to reach 2019 levels, international arrivals need to recover fully, Mauro said.
Three factors are hindering tourism’s recovery, including inflation, rising flight costs and continued disruptions in key source markets such as China and Russia.
“We expect demand to fully recover by 2024. However, Vietnam’s tourism industry also faces the challenge of oversupply. Over the next three years, supply in key tourist destinations is expected to grow at an average rate of 20 per cent per year. At this rate, if demand does not increase, it may lead to oversupply, which will impact occupancy,” he said.
There is great potential for resort real estate in Vietnam as the country saw the largest increase in international arrivals in Southeast Asia between 2009 and 2019 at 16.9 per cent a year.
The supply of mid-scale to luxury rooms has increased to 94,000 this year from 14,000 in 2009.
“To place Vietnam firmly on the international tourism map, agencies, investors, and professional consultants need to cooperate to deliver quality projects that reflect the demands of the changing market and the local features. This is essential for long-term sustainability,” Mauro said.
In the Asia Pacific, hotel occupancy was decimated by the pandemic and ranged from 25 per cent to 40 per cent in major destinations since 2020. However, the market has seen upticks since the second half of 2021, following successful vaccination campaigns across the region, which instilled confidence in investors.
According to Savills Asia Pacific Hospitality Spotlight published in June, hotel investment volumes reached US$14.9 billion from 459 deals in 2021, surpassing the pre-pandemic five-year average of US$14.6 billion.
The market saw an uptick in both investment volumes and the number of transactions in 2021, up 42.1 per cent YoY and 25.8 per cent YoY, respectively.