HCMC hotels have gloomy time as tourism growth slows

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Hotel occupancy rates in Ho Chi Minh City fell last year as international visitor arrivals grew at the slowest pace in three years, property services provider Savills said.

The number of visitors was 8 percent higher than in 2011, but the growth rates had been 13 percent and 23 percent in the two previous years.

Last quarter the occupancy rate dropped by 3 percentage points year-on-year 2011, and the average room rent by 9 percent.

Four- and five-star hotels were hardest hit, while the three-star segment performed best with 75 percent of rooms occupied.

HCMC has 11,500 three- to five-star hotel rooms, with five more hotels set to enter the market later this year and increase supply by 9 percent.

Apartment sales in the city remained modest with 1,100 units sold, but Savills said a lending rate cut this year, if any, would "positively affect" both buyers and developers amid the ongoing gloom.

Last quarter the absorption rate stayed almost unchanged from the previous at 8 percent.

A cut in lending rates, expected later this year after the central bank cut the basic rate by 1 percentage point to 8 percent in late 2012, could boost apartment sales in the near future, Savills said.

The government's proposal to cut land-use fees and taxes on property transactions could "gradually help the market get back in shape," it said.

Last quarter four low-cost apartment projects with 1,500 units hit the market to take the inventory to 83,200 units.

An apartment on average was priced at VND19.8 million (US$950) per square meter.

Around 2,000 units will enter the market in the next two quarters.

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