Hotel InterContinental Hanoi Westlake. (Photo: Bnews) Hanoi (VNA) – Though the second wave ofCOVID-19 dashed hopes for quick tourism recovery in 2020, real estate servicesfirm CBRE Vietnam believed the industry’s long-term outlook remains positive.
In a recent hotel insights report, CBRE Vietnam said theoutlook for Vietnam’s hotel sector remains positive in the long run thanks toexpected improvements in infrastructure, favourable visa policies and the politicalwill to turn tourism into a key industry.
According to the consulting firm, Vietnam has beenpraised by the international community for its decisive and effective effortsin the containment of the coronavirus, which would help the country to enhanceits image on the global tourism scene as one of the safest travel destinationsonce the pandemic is over.
Regarding the investment landscape, there are someopportunistic investors looking for distressed assets at a big discount.However, the market so far hasn’t seen many distressed assets in the 4-and5-star segment. There will be more opportunities in the lower segments though,as well as from hotel chain owners seeking to divest some assets that areconsidered less strategic.
After enjoying impressive tourist growth in previousyears, in the first half of 2020, Vietnam has recorded drops of 56 percent and50 percent year-on-year for international arrivals and domestic-travelerstrips, respectively.
As the Vietnamese government has suspended allinternational flights to the country to prevent the spread of COVID-19 sincethe end of March, foreign arrivals tumbled by 99 percent year-on-year in thesecond quarter alone.
The pandemic has disrupted numerous travel plansworldwide, resulting in weaker hotel performance across the country. Revenue per available room (RevPAR) inVietnam went down significantly by 55 percent year-on-year during the first sixmonths of the year.
Occupancy rates reached the lowest point in April, whennationwide social distancing order was imposed, then slowly recovered in Mayand June when local tourists started to hit the road again.
However, as HCM City and Hanoi’s four and five-star hotelmarkets strongly rely on foreign guests, occupancy rates improved just by smallamount of 1–1.5 percentage points each month.
Domestic tourism will lead the recovery and compensatefor the losses from international tourists in 2020.
After going nearly 100 straight days without communityinfections, the country confronted a resurgence from a fresh cluster originatedfrom Da Nang hospitals since late July.
In the face of more complex developments, tourism demandmay be significantly dampened and domestic tourists certainly become morehesitant to travel than ever.
Demand from international tourists will also take longerto return, from both the continuing of flights suspension as well as reluctanceto travel when the virus is not fully contained in foreign countries.
The sector’s performance in the third quarter of thisyear will not see much improvement from the previous quarter, as Vietnam hasfaced a second wave of COVID-19 and some parts of the country have alreadypracticed social distancing to prevent the spread.
Nguyen Trong Thuc, Associate Director of CBRE HotelsVietnam, said the hotel industry in 2020-2021 is expected to be in defensivemode with intermittent fluctuations in performance until a vaccine or widelyavailable treatment for COVID-19 can be produced./.
VNA
