The average room rate (ARR) in Ho Chi Minh City dropped 5 percent quarterly and 3 percent annually to 1.6 million VND/room/night (or 78 USD/room/night) in the second quarter of 2015, reported Savills Vietnam estate service provider.

This was the lowest ARR recorded over the past five years, owing to an increase in supply and fierce market competition.

Ho Chi Minh City added 540 three-star hotel rooms from six new and one refurbished hotel and 446 five-star rooms during the quarter.

The city currently has 106 hotels offering approximately 13,000 rooms, up 6 percent quarterly and 10 percent yearly. Nine more hotels supplying over 1,100 rooms are expected to be operational by the end of this year, including three five-star and six three-star hotels.

As the low tourism season, the average occupancy in the second quarter was 64 percent, down 6 percent from the first quarter.

International arrivals to the city in the first half of 2015 rose by 3 percent compared to the same period last year to more than 2.16 million visitors, accounting for 46 percent of its yearly target.

The local tourism sector generated over 47 trillion VND (2.16 billion USD) during the first six months, an increase of 7 percent.

The city has been focusing on canal tourism by supporting travel agencies to promote tours along the Nhieu Loc – Thi Nghe canals.-VNA