78 pct upscale hotels resume operations: survey

The reopening rate is highest in Ho Chi Minh City at 99 percent, followed by the southern province of Ba Ria – Vung Tau at 96 percent and Hanoi at 93 percent, according to a survey of 635 premium hotels and resorts by real estate research firm Savills.

Most hotels are again operating at full capacity as airlines reopened domestic routes to boost travel after a three-week social distancing campaign came to an end on April 23.

But 22 percent of hotel owners say their businesses would remain closed until the international market recovers.

Mauro Gasparotti, director of Savills Hotels Asia Pacific, said: "The decision to reopen so many properties is a remarkably bold move by Vietnamese owners especially when compared to other countries, such as Thailand where most hotels are holding off until international travel resumes."

He added business will be slow in the upcoming months as upscale city hotels heavily reliant on international and corporate demand still experience single digit occupancy, with some running as low as five percent.

Local tourists, accounting for 83 percent of the total last year, are more price sensitive than international and corporate guests, and therefore looking for mid-scale properties rather than 4- and 5-star hotels, he added.

Almost half of hotels surveyed were offering deals and lowering rates to attract customers, with the most aggressive promotions seen in coastal destinations like Da Nang City and the central province of Quang Nam as well as Phu Quoc Island and Phan Thiet Town in the south.

The pandemic has created roadblocks to the construction of new hotels. Among 49 projects with a planned 16,900 rooms, expected to enter the market this year, 23 have postponed launching till next year.

In the first five months, Vietnam saw foreign arrivals down 49 percent year-on-year to 3.7 million people, according to General Statistics Office.

The Vietnam National Administration of Tourism expects foreign arrivals to fall by 70 percent this year from 18 million in 2019 if the disease is contained globally by June. The drop will be 75 percent if the pandemic continues until September.