According to the latest report from Savills Hotels Asia Pacific, the hospitality market in Vietnam, which has been an attractive sector for investors over the past few years thanks to its consistent growth, is expected to continue to expand in 2019 due to both global and domestic trends,
Savills report says that Vietnam is in a good position to capture growth opportunities. It predicts that tourism will continue to grow in 2019 but at a lower rate than in the previous year. There will be a new wave of branded properties coming on line such as Movenpick Cam Ranh and Melia Ho Tram, which could put these locations on the international tourism map.
Information technology (IT) is one prominent trend that is having a tremendous impact on the tourism industry and the development of travel industry IT applications make travel much easier. Travel support tools and application will make higher quality products and many different accommodation options accessible. Smartphones, Artificial Intelligence, electronic payments and social media will continue to have incalculable impacts on the travel industry.
Mauro Gasparotti, the Director of Savills Hotels Asia Pacific said that demographic and consumer changes, influenced by global trends, will increase travel demand and inspire the creation of new products to catch these trends.
According to Gasparotti, “We often encourage developers to study new trends and products that have not had much presence in the Vietnamese market such as branded residence, select service hotels or experience-oriented resorts in order to diversify accommodation choices and capture the needs of a new generation of travellers.”
“However, these products also require investors to have a certain understanding of concepts and ideas as well as ways of co-operation between involved parties to ensure the implementation and feasibility of projects. We also hope to see more green projects and sustainable development in the future, which will become a very important factor and criteria for the end users.”
“Finally, some previously calm destinations such as Hue and Mui Ne are expected to return to compete with the coastal tourism markets with many new development opportunities. Overall, we still have a positive outlook on Vietnam’s hospitality real estate market this year and look forward to positive outcomes next year.”
Savills says they expect to see the opening of many condotel projects with enormous inventories coming to the market. Condotels are good products only when they are well studied, planned and executed, but these projects could damage the market if they are poorly planned and controlled by depressing room rates and occupancy in the medium term, especially at beach locations.
Last year was excellent for Vietnam’s real estate market with positive signs coming from all sectors, among which hospitality stood out as one of the main sectors drawing enormous attention from international and local developers and investors. Many projects are being planned, developed and opened with the presence of new brands and products.
The growth and performance of the travel industry in 2018 was due to several factors including infrastructure improvements, new international routes, policies encouraging tourism and contributions from the private sector. Vietnam’s hospitality industry is witnessing rising interest from both international and local investors. However, transactions have been limited due to the scarcity of inventory and the unwillingness of owners to dispose of existing properties.