VietNamNet Bridge – The competition in the market is heating up and luxury hotel developers are struggling to scramble for clients. Still, the market is large enough thanks to the increasing number of travelers to Vietnam.
Grant Thornton’s 2017 report shows that the number of domestic travelers, mostly businesspeople, staying at luxury hotels and resorts (4-5-star) in the last three years (2014-2016) has been increasing rapidly.
In 2016, Vietnamese guests accounted for 20.4 percent of total clients booking rooms at luxury hotels, an increase of 3.4 percentage points over 2014.
According to Grant Thornton’s Trinh Kim Dung, the figure showed that Vietnamese now have better payment capability. The 5-star hotel room rate in 2016 was $104.4 for one night, a slight decrease from the previous year, while the 4-star hotel room rate increased slightly to $75.
Kent Atkinson, chair of Grant Thornton Vietnam, noted that there is a sharp increase in the number of investors and businesspeople from Japan and South Korea to Vietnam, which brings opportunities to luxury hotels, though the clients tend to lease houses.
John Gardner, CEO of Chains Caravelle (Caravelle Saigon Hotel), believes that the 5-star hotel room rate decreased in 2016 partially because of clients from countries which have high investments in Vietnam. Booking hotel rooms in large quantities, some groups of clients tried to negotiate for better prices.
|In 2016, Vietnamese guests accounted for 20.4 percent of total clients booking rooms at luxury hotels, an increase of 3.4 percentage points over 2014.|
Gardner said he once had to refuse a big group of clients because of the price, adding that it is easier for hotel systems to deal with big groups of clients than separate hotels.
Tony Chisholm from Pullman Saigon Centre said the tendency has affected hotels. Samsung, for example, once booked 4,000 rooms at Accor for one night. Accor’s newly opened hotel in Hanoi had half of its guests from Samsung at one time.
With such big changes in sources of guests, luxury hotel owners and managers have had to adjust their business strategies.
As for clients from South Korea and Japan, multinational conglomerates, which usually need high numbers of rooms, may build hotels in Vietnam for their staff to stay in for 18-20 years. Samsung has done this in some countries.
Realizing that the number of Vietnamese guests is on the rise, the Accor chain is trying to attract more Vietnamese clients. Vietnam is expected to be among the top 3 countries which have the highest numbers of citizens staying at the hotel chain.
The attractiveness of the hotel service market has prompted many investors to pour money into Vietnam. A series of successful M&A deals were made in 2016, including the transfer of Sofitel Metropole Legend Hanoi, Novotel Saigon Center and Kumho Asiana Plaza Saigon.