The owners of small and 3-4-star hotels, valued at tens or hundreds of billion of dong, have suffered the most from COVID-19.
“We want to transfer a 3-star hotel, nine stories, with gym, massage and sauna rooms, mini bar and conference room. The monthly revenue was VND2.5-3 billion before the epidemic,” an ad said.
“We are seeking buyers for a hotel in Cat Ba, located on Nui Ngoc Road in an advantageous position. It takes five minutes to walk to the sea and two minutes to the seafood market,” another ad said.
Some owners said they ‘cannot arrange a workforce to prepare for the summer sale season’, and others said they wanted to sell hotels immediately because they ‘need money for other investment affairs’.
However, analysts said the major reason is that the hotels are not earning money for their owners these days because of the epidemic.
Phan Xuan Can, chair of Sohovietnam, a consultancy firm in real estate M&A, said many people have had to sell their assets. Small hotel owners bear the worst pressure and they can be divided into three groups.
First, the investors who lease hotels in large cities or coastal areas. Some investors lease 10-15 hotels. As the tourism industry has entered the ‘hibernation’ period, the investors have to assign the right to do business with hotels to others.
Second, investors who build hotels with borrowed money and run the hotels themselves. Because of Covid-19, they have had to close the hotels.
According to Can, these investors have no other choice than to sell the properties, because they don’t have revenue coming in, and they still have to pay interest on loans.
Third, investors who build hotels with their own money. These investors have to halt operation because there are no guests m, but they won’t have to sell their hotels.
Who are the buyers then? According to Can, many investors have contacted Sohovietnam and said they want the hotels with 100-500 rooms which have been built, are operational, or still under construction in HCM City, Hanoi, Da Nang, Nha Trang, Phu Quoc, Hoi An, Ha Long, Hue, Quy Nhon and Vung Tau.
Vietnam’s GDP growth rate of 3.82 percent in the first quarter of 2020, a record low since 2011. This rate is much lower than the 6.52 – 6.77 percent originally forecast.