A luxurious resort in the central city of Da Nang. Photo credit: baodanang.vn.
Vietnam’s hotel industry is becoming more attractive to foreign investors thanks to better hotel quality, improved infrastructure and brighter economic outlook, according to a CBRE report.
As prices continue to rise in Hong Kong, Singapore and Tokyo, investors are now propelled to look for quality hotels growing in Southeast Asia, real estate services firm CBRE said in its recent report.
However, they have interests only in investment opportunities with good and attractive yields and without many risks.
Robert McIntosh, executive director of CBRE Hotels in Asia Pacific, said, “The longer term outlook [for Vietnam’s hotel sector] appears positive at present. The quality of the infrastructure and hotels has improved considerably over the last few years and this has led to a more stable and resilient tourism market.”
“Hotel performance is expected to improve in the medium term and foreign investors are increasingly attracted to the opportunities and returns Vietnam offers,” he said.
Hotel occupancy across Vietnam has strengthened over the last three years. Occupancy rates in Hanoi and Ho Chi Minh City are now inching closer to other major cities such as Jakarta and Kuala Lumpur, according to the report.
Hotel supply for both Hanoi and HCMC is expected to increase a total of 8 percent over the next three years. This rate is less than in Kuala Lumpur and Jakarta where supply may grow by 20 percent and 40 percent, respectively.
Meanwhile, local tourism demand in Vietnam has improved between 7 and 8 percent each year over the last three years.
International tourism demand has also grown, 13.9 percent in 2012 and 11 percent in 2013. The first five months of this year showed a more impressive figure -- more than 26 percent.
One of the reasons for the interest in Vietnam tourism could be attributed to Thailand’s political turmoil as tourists shift their visits from Thailand to other Southeast Asian countries.