A resort in Nha Trang. The hotel market is expected to face a severe decline in room occupancy due to the pandemic and will not recover until next year. (Photo: vietnam.travel)
HCM City (VNS/VNA) - Thehotel market in Vietnam this year is expected to face a severe decline inroom occupancy due to the COVID-19 pandemic and will not recover untilnext year, industry experts have said.
Savills Vietnam said the COVID-19 crisis had seriously disrupted theeconomy, especially the tourism sector and hotel market.
Many hotels have either suspended operations ortemporarily closed to cut costs, and have retained only key personnelto prepare for reopening.
These moves were done to offset the revenue decline in the shortterm, but many hotel owners are still uncertain about how long it will take fortourism demand to rise again.
Savills said the global economic impact caused by the pandemic wouldmake it more difficult for a full recovery of the hotel industry thisyear. “Full recovery is likely to take placein 2021,” Savills said.
Domestic tourism demand, especially from young travellers, will play animportant role in the recovery of the hotel industry, it said.
A report from CBRE Vietnam said the hotel market in Hanoi has shown more positive signs thanin HCM City.
The four- and five-star hotel segment in Hanoi is expected to recover morequickly when international businesses resume normal operations, withhotels in Đống Đa and Ba Đình districts preferred by customers.
Domestic guests and international visitors from Northeast Asia will also play arole in the recovery of the hotel market in Hanoi after the outbreak is undercontrol.
For the hotel market in Hanoi, if the epidemic is contained by June, theaverage room rate this year will decrease by 8-13 percent and the occupancyrate will drop by 46-51 percent compared to last year, according to CBRE Vietnam.
If the epidemic is contained in September, the average room rate willdecrease by 15-20 percent, while the room occupancy will fall by 50-55 percentcompared to last year.
For the hotel market in HCM City, CBRE Vietnam forecasts that if the pandemicis controlled in June, the average room rate this year will fall 10-15 percent,and the room occupancy will decrease by 40-45 percent compared to 2019.
If the epidemic is controlled by September, the average room rate willdecrease by 17-22 percent compared to 2019, the room occupancy is also expectedto drop by 44-49 percent over the last year.
The Vietnam National Administration of Tourism expects a slow recoverypost-COVID, and has created two scenarios for the tourism sector thisyear.
In the first scenario, the number of international arrivals to the countryis expected to decrease by 70 percent this year compared to 2019 if theoutbreak is contained in June.
In the worst-case scenario, the number of international visitors willfall by 75 percent if the pandemic is controlled by September.
“In any scenario, this year will see an unprecedented drop in terms of touristvolume, and consequently a plunge in occupancy levels at hotels. Thepossibility of a global recession due to the outbreak will also negativelyimpact the hotel market,” the Vietnam National Administration of Tourismsaid.
Mauro Gasparotti, director of Savills Hotels Asia Pacific, said: “Vietnamhospitality has been affected and this will likely continue into theforeseeable future. However, the hospitality industry is likely to see thefastest and strongest turnout when compared to other sectors.”
“The country’s high reliance on local travellers and the Chinese and Koreanmarkets could turn out to be an advantage as these groups are expected tobe some of the first who are able to travel again,” Gasparotti said.
Vietnam suspended flights from China at the end ofJanuary and from theRepublic of Korea in early March. At the end of March, allinternational flights were suspended.
With travel restrictions, social distancing measures and reluctance to traveldue to the COVID-19 outbreak, Vietnam saw only 3.7 million internationaltourist arrivals in the first quarter, a year-on-year drop of 18.1 percent,while the number of domestic travel trips also saw a decrease of 18 percentyear-on-year.
The Vietnam National Administration on Tourism estimated a loss of 5.9-7.7billion USD to thecountry’s tourism from February to April.
Hotels, tour operators and travel agencies were severely impacted during thisperiod. Many hotels had to reduce staff working hours and layoff staff, or temporarily close./.
