Hotels for sale at new high amid pandemic blues

The sales trend first kicked off in central areas of HCMC and Hanoi's Old Quarter, but later spread to other tourism hotspots like Phu Quoc Island, Da Nang City, and other coastal towns including Nha Trang, Vung Tau, and Quy Nhon.

Dozens of hotels have been listed for sale each day by brokers or on real estate websites, since the second Covid-19 outbreak hit the country late July.

Longtime brokers in the real estate market say the current wave of hotel sales is the biggest they have seen in the past decade.

Fusion Suites Saigon on Suong Nguyet Anh Street, Saigon's District 1, is listed for sale at $50 million. Photo by VnExpress/Nguyen Nam.

On the streets of Ly Tu Trong, Le Thanh Ton, Bui Thi Xuan and a few others, nearby HCMC's iconic Ben Thanh Market, many 30-100 room hotels are listed for sale. Prices commonly range from a few dozen billion to hundreds of billions of dong (VND1 billion = $43,160), with some going up to VND1 trillion.

The current situation is completely contrary to 5-7 years ago, when a wave of investment in mini hotels was so popular in Saigon that many street houses were bought specifically for such renovation purposes.

However, brokers said currently listed hotel prices are still at a higher than expected threshold, complicating the sales process.

A townhouse operating as a hotel offering serviced apartments in the Phu My Hung urban area of HCMC's District 7 is closed, with for sale signs pasted across its door. Photo by VnExpress/Trung Tin.

Vo Quoc Phuong Trang, head of hotel investment consultancy at real estate service firm Jones Lang LaSalle (JLL), told VnExpress the hotel business sector was among the groups first and hardest hit by the pandemic.

There were no mergers and acquisitions in the hospitality industry during the first half of the year as uncertainty caused by the Covid-19 outbreak gripped the sector.

Mauro Gasparotti, director of real estate consultancy Savills Hotels Asia Pacific, said the limited number of flights have prevented buyers from inspecting properties, and so negotiations are delayed.

Four- and five-star hotels are still holding up but those with three stars and below are facing challenges since there are few guests, he said, explaining that some are experiencing 10 percent occupancy rates, while the minimum to sustain operations is 35 percent.

Foreign tourist arrivals in Vietnam between January and August fell 66.6 percent to 3.77 million, according to the General Statistics Office.