Ho Chi Minh City hotel market suffers from expansion

By Vu Le, Tuan Dam   April 7, 2016 | 03:32 pm GMT+7

More rooms and less guests forced many hotels in HCM City to cut their prices by around five per cent in an attempt to attract more visitors in the first quarter of 2016.

According to a report on Vietnam’s real estate sector in the first three months released by Savills Vietnam, the average hotel price fell to about VND1.8 million (approximately $81) per night after guest numbers dropped by one to two percent in Q1.

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Room rates in HCM City's top hotels have been cut to attract more foreign tourists. Photo: VnExpress

The peak seasons for tourism in the country's largest city are Q1 and Q4, but the market is painting a more somber picture. This is the second consecutive quarter in the high season to witness tumbling hotel prices.

The main reason is the opening of a number of new three star hotels that have lifted the number of rooms available in that segment and above to 15,000, which is 14 percent higher than the same period last year.

Economic uncertainties in both China and Russia have also hit the number of tourists travelling from those countries, which contribute significantly to the city's tourism market.

Savills Vietnam estimates that an additional 5,000 rooms will penetrate the market from 2016-2018 and continue to create more competition and pressure, especially in the high-end segment.

 
 
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