The recovery of tourism, especially its international segment, is seen to be the driving force for the hotel market to prosper, with improvements in both occupancy and room rates, said experts from the real estate agency Savills Vietnam.
The hotel market in Viet Nam is expected to grow by US$2.12 billion during 2021-2026, progressing at a compound annual growth rate (CAGR) of 14.43 percent.
After a long hiatus caused by the COVID-19 pandemic, Vietnam’s tourism is gradually reopening with the resumption of international flights, which is considered a positive factor helping recover the hotel market.
Vietnam’s real estate market recommenced its record run, with the industrial sector viewed as the star of the industry thanks to the country's success in combating COVID-19, said a story by Philip Heller published on Forbes earlier this week.
The hotel market in Vietnam this year is expected to face a severe decline in room occupancy due to the COVID-19 pandemic and will not recover until next year, industry experts have said.
Vietnam has witnessed an influx of international hotel brands and hotel management companies in the last few years, according to property consultant Savills Vietnam.
Average hotel occupancy rate in Ho Chi Minh City reached 74 percent in the first quarter, increasing by 6 percentage points from the same period last year.
Four- and five-star hotels in Ho Chi Minh City have seen a slight decline in room rates although the rising number of tourists has resulted in an increase in occupancy rates at high-end hotels.
The competition in the upscale hotel market will start to heat up, especially in the five-star segment, according to the 2017 Vietnam Hotel Survey released on July 11.
A slump in tourism has hit Ho Chi Minh City's hotel market, which saw a drop in the average rate of reserved rooms in the first six months of the year compared to the previous five years.
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