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The Covid-19 epidemic changed the landscape of the resort real estate market in Vietnam

Tuesday 02, 06 2020
According to Savills Hotels' report, the hospitality market in Vietnam has been showing signs of "reviving" after the Covid-19 pandemic was completely controlled by Vietnam.
The Covid-19 epidemic changed the landscape of the resort real estate market in Vietnam

Most hotels and resorts have reopened

After 22 days of social isolation, hotels and resorts have been allowed to come back into operation, but still have to implement measures to prevent and control epidemics as prescribed. To assess the "post-COVID-19" business situation, Savills Hotels conducted a survey of 635 hotels and resorts in the four and five-star segment in Vietnam.

According to the survey results, there are 493 accommodation establishments, equivalent to 78% that have opened to welcome guests. In which most hotels and resorts have provided sufficient facilities, only a small number of establishments have adopted a partial suspension strategy to cut costs. The survey also found that 22% of facilities remained closed until international visitors returned.

Mr. Mauro Gasparotti - managing Director of Savills Hotels Asia Pacific, said, "The reopening of hotels and resorts to welcome guests is considered a courageous step for Vietnamese investors, especially. When compared with neighboring countries like Thailand, where most of the hotels are still temporarily closed to wait for the recovery of the international tourist market. are reopened to retain key personnel and avoid losing market share in case the market recovers rapidly after a pandemic.

Accommodation in the coastal market seems more cautious in the decision to open the door to welcome guests, such as Phu Quoc or Quang Nam with re-opening rates of 58% and 55% respectively. Business activity is expected to slow down in the coming months although the average capacity in the first weeks of May has reached about 16%, indicating that the market has begun to show signs of recovery. This increase in capacity mainly comes from accessible tourist destinations by vehicles such as Ho Tram Long Hai, Da Lat, and Ba Ria Vung Tau; Of which, some locations operate at full capacity by the end of the week because most tourists still hesitate to travel by air after the Covid-19 epidemic.

High-class and luxury hotels in big cities depend mainly on international and business travelers, so their capacity drops to only one digit, in which some establishments only reach 5%. Some accommodation establishments are able to maintain occupancy at a higher rate thanks to long-term visitors. The domestic tourist market, although accounting for 83% of the total number of tourists in 2019, is considered a more sensitive group in terms of travel budget than international and business travelers. This group often selects hotels and resorts with a medium budget so it does not affect the performance of 4 and 5-star hotels in the city. However, some high-class resorts can still attract domestic customers if they offer attractive and appropriate incentive programs, we hope this strategy will bring positive results in the period. Summer vacation is coming.

The Covid-19 epidemic changed the landscape of the resort real estate market in Vietnam

Many accommodation establishments offer attractive promotions

Most hotels and resorts have reopened in May with a variety of incentive programs. Survey results of Savills Hotels show that nearly half of the properties have launched incentives and discounts after reopening.

The properties in the high-end segment often offer incentive programs such as providing attractive service packages, free services such as dining, transportation, etc. to attract tourists in the country. The reduction of room rates and the combination of many attractive incentive programs are considered a good strategy to help accommodation establishments improve their competitiveness to catch up with the recovery of the tourism market in the coming time.

Mr. Mauro commented that: "The sharp decline in the number of tourists made the average room rate in April at accommodation properties, especially the segment dependent on international visitors, significantly reduced. In particular, the average room rate in April has decreased by 29% compared to the same period last year. the recovery of the market after international flight and business operations resume. "

Survey results show that projects in coastal destinations such as Da Nang, Phu Quoc, Quang Nam, and Phan Thiet offer attractive and more competitive promotions after reopening. This is because hotels and resorts are heavily affected by the decline in international visitors. Therefore, the introduction of promotions in this period will help stimulate domestic tourism.

>> Real Estate Industry Report

The affection of social - distancing policy on projects under construction

The Covid-19 pandemic, along with its preventive measures, has affected almost every field. Specifically, many real estate businesses have been facing many difficulties in meeting project progress, mainly due to the shortage of raw materials, labor shortage and financial arrangements.

According to Savills Hotels data, there are 49 resort & real estate projects in the 4 & 5-star segment at major resort destinations * being under construction and expected to be operational by 2020, adding 16,900 rooms to the market. The survey showed that 53% of these projects, although somewhat behind schedule, are still rushing to finalize their final steps to promptly open their doors this year. The remaining 23 projects have postponed the completion time by 2021, of which, more than 60% are expected to be completed in Q1 and Q2 of 2021, the rest have not had a specific time for completion. Most projects that are behind schedule (90%) are located in coastal areas.

Source: vietnamfinance.vn

 
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