Bangkok--1 Oct--CB Richard Ellis
The hotel market in Vietnam has faced considerable pressure since the onset of the global financial crisis, with declining occupancy levels and average daily rates forcing revenue per available room and profitability levels down, according to international property consultants CB Richard Ellis (CBRE).
Despite the existing challenges in the hotel market, Vietnam has remained relatively more resilient than other regional competitors, with Vietnam still achieving the second highest revenue per available room (RevPAR) across the region, according to data from STR Global.
“A number of opportunities exist to capitalise on the strengths of the market and ensure that Vietnam is well positioned to respond quickly once demand for tourism bounces back”, says Mr. Robert McIntosh, Executive Director, CBRE Hotels.
“For example, Vietnam lacks the diversity of hotel brands and hotel styles often seen in other locations such as Singapore or Thailand. Vietnam would benefit from expanding the current offering of hotels to include brands which target specific segments of the market, particularly those catering to international tourists” Mr. McIntosh said.
Mr. Mauro Gasparotti, Manager, Valuation and Advisory, CBRE Vietnam said “A number of new hotel development trends are emerging in Vietnam, such as the development of budget hotels, resorts, hotels in industrial parks and building conversions. Budget hotels are becoming increasingly popular, driven by increasingly cost conscious consumers seeking hotels which offer a great value at an affordable price.”
The hotel market in Vietnam is supported by strong market fundamentals, providing a unique cultural offering and variety of different destinations, yet has one of the lowest visitor arrivals per capita across the region. “Vietnam needs to develop strong destination marketing initiatives in order to attract international visitors and position Vietnam as a regional and international destination of choice,” Mr. Gasparotti said.
Mr. Raymond Clement, Associate Director of CBRE Hotels said “Despite a challenging 2008, we have now started to see a turnaround in 2009, as investors are returning to the market attracted by lower prices, additional liquidity and a more stable economic environment. Improvements to Vietnam’s infrastructure, investment regulations and the visa system will also help encourage further investment in Vietnam’s hotel and tourism sector in the future.”
The current market also presents an opportunity for hotel owners and operators to assess how to maximise returns in the short term, and how to ensure their property is well positioned for the future. Mr. McIntosh said “It is crucial that the hotel owner evaluates existing operations and facilities to identify how the property could be managed more effectively. Often small changes to business operations or facilities can make a significant difference in the performance of the property”.
“A number of different methods of managing a hotel exist, and it is important to ensure that your current management arrangement is effective in generating business, marketing the hotel, servicing guests and is most importantly, achieving room rates and occupancy levels that are comparable to your competitors. If not, then something is wrong and changes are necessary” said Mr. McIntosh.
“Overall, I’m very optimistic about the future of the hotel market in Vietnam. Despite the current challenges facing the market, significant opportunities exist going forward. It is crucial that hotel owners and investors are fully informed about current market conditions, and are well positioned to capitalise on opportunities in the future” Mr. McIntosh said.
About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2008 revenue). The Company has approximately 30,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis has been named a BusinessWeek 50 “best in class” company three years in a row and Fortune 100 fastest growing company two years in a row.
CBRE Hotels is the world’s leading, full-service, real estate advisory group focused exclusively on the hospitality industry. CB Richard Ellis Hotels provides consultancy services for the sale, valuation, financing, development and asset management of hotels. Please visit our website at www.cbrehotels.com
CB Richard Ellis established an office in Bangkok in 1988, followed by Phuket office in 2004, and Samui office in 2007. CB Richard Ellis (Thailand) Co., Ltd. has grown to be a leading real estate services provider, offering strategic advice and execution for sales and leasing for all types of property, property and facilities management, valuation and advisory, and research and consulting. For more information, visit the company's website at www.cbre.co.th.
For further information:
Mr. Robert McIntosh
Executive Director - CBRE Hotels Asia Pacific
65 6326 1200
Mr. Raymond Clement
Associate Director - CBRE Hotels
65 6326 1648