Five-star, international hotels dominate Hanoi, HCMC markets

By Nguyen Ha, Vu Le   October 24, 2019 | 11:26 am GMT+7
Five-star, international hotels dominate Hanoi, HCMC markets
Front view of a five-star hotel in Hanoi. Photo by Shutterstock/Quang Nguyen Vinh.

The five-star segment is the best performer in Hanoi's hotel market while international brands dominate the HCMC market, a new report says.

In its market brief for the third quarter, real estate services provider Savills Vietnam reported an improvement in the Hanoi hotel market, with average occupancy rising by 2 percentage points year-on-year, average rent by 13 percent and revenue per available room (RevPAR) by 16 percent.

The capital has approximately 9,800 rooms in 65 hotels, including 16 five-star and 18 four-star. Five-star hotels saw the best performance with a high average occupancy rate of 82 percent and an average room rate of $142.

The RevPAR for the five-star segment was $117, while they were $54 and $30 for the four-star and three-star segments.

Geographically, the western area was the market leader with 82 percent occupancy and RevPAR of $103 despite being second to the downtown area in terms of average room rates.

In the first nine months of the year Hanoi received more than 21.5 million visitors including 4.7 million international visitors, up 9.4 percent and 9.6 percent year-on-year.

Matthew Powell, director of Savills Hanoi, said a healthy 9.6 percent year-on-year increase in international arrivals from major FDI source countries such as South Korea, China, and Japan continues to support growth in the five-star hotel performance, but the rate of increase is less dramatic than in the previous two years.

The report also added that in the third quarter international hotels in Hanoi outperformed domestic ones with an occupancy rate of 80 percent and average room rate and RevPAR being double those of their domestic rivals.

Ho Chi Minh City has solid supply dominated by international hotels with approximately 16,200 rooms. 

Of the 5,000 rooms entering the market in the near future, 62 percent will belong well-known hotel brands, including Hilton Saigon (350 rooms), Mandarin Oriental Saigon (228) and Holiday Inn & Suite Saigon High Tech (300).

According to the Department of Tourism, the city attracted more than 6.2 million foreign visitors in the first nine months of the year, a 14 percent increase year-on-year. It was 3 percentage points higher than the national average, indicating rising demand for hotel rooms in the city.

The average room rate in the third quarter was $83, a 3 percent increase quarter-on-quarter and 4 percent increase year-on-year. 

It was the highest average room rate since the third quarter of 2015, and was due to an increase in the five-star segment.

 
 
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