Investments in the tourism property sector, especially in the
low-cost hotel segment, sees a growing trend and is forecast to lure a great
number of local as well as foreign investors in the coming time despite the
current stagnancy in the realty market, said an industry practitioner.
Speaking with investors at a conference held in the New World Saigon hotel in
HCMC on Tuesday, chief executive officer of CBRE Hotels Asia Pacific Robert
Mclntosh said that Hanoi and HCMC recorded a hefty growth in revenue per
available room (RevPar) in the last three years.
RevPar is calculated by multiplying the room price and the room occupancy which
is used by hotels to define their income.
According to the market survey by CBRE, hotels in Hanoi and HCMC saw their room
occupancy rise by 5-10% this year against 2010 while RevPar gained a rise of
15-20% compared to that of 2009. The average room price of hotels in Vietnam
remained higher than that of regional hotels and just after Hong Kong and
The market survey company said that hotel investments attracted numerous local
investors who were making consideration and seeking more concrete information so
as to pour their money into the field.
The potential for hotel investments in Asia-Pacific as well as in Vietnam,
Mclntosh believed, is pretty high, especially for those who seek long-term
investments. He added that the segment made fast recovery after the financial
crisis and enjoyed a growth rate of RevPar at around 20% against the pre-crisis
period in a majority of big cities in Asia.
The figures from a market survey revealed that while the investment in tourism
property accounted for only some 22% in Vietnam compared to over 35% in
Thailand, the proportion is poised to increase to around 38% in the next 12-18
The tendency will not apply to resorts, but to low-cost hotels instead which
reap better results in terms of RevPar growth rate at present. Three-star hotel
market provides investors with a good opportunity to look for ample profits, he
The three to five-star hotels in HCMC, according to the figures from a market
survey by Savills Vietnam, have around 10,000 rooms of which HCMC’s District 1
accounted for 70%.
The coming time is predicted to see some 6,200 rooms from 25 projects of three
to five-star hotels enter the market while around 1,500 rooms is forecast for
The current macro-economic policy which is unfavorable to the realty market,
however, is likely to affect the schedule of some projects in the future.