Hospitality industry unlikely to recover until next year

By Dat Nguyen   May 15, 2020 | 10:55 am GMT+7
Hospitality industry unlikely to recover until next year
A motorbike driver rides past Vanda Hotel in Da Nang City in March 2020. Photo by VnExpress/Nguyen Dong.
Hotel occupancy rates are set to plummet this year due to the coronavirus pandemic, and a recovery is only expected next year.

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

Property consultancy CBRE said in a recent report that whatever the scenario there would be a huge fall in the number of tourists this year sending hotel occupancy rates plummeting.

In Hanoi, occupancy rates could fall from over 80 percent last year to about 29 percent if the disease is contained in June, and to 25 percent if contained in September, and average tariffs would drop by 13 percent and 20 percent in the two cases, it said.

In Ho Chi Minh City, rates could drop to 25 percent and 21 percent respectively from over 70 percent last year, and rents could fall 15 percent and 22 percent.

Fifteen new hospitality projects with 3,000 rooms were scheduled to enter the market by 2023, but there have been delays in construction because of the coronavirus.

Mauro Gasparotti, director of Savills Hotels Asia Pacific, said most hotels have closed partially or fully to reduce costs, and only key personnel are still working to prepare for reopening.

In any event, a full recovery is unlikely until next year, he said.

Since international air services have yet to resume, in the short term local tourism will be the only source of demand. Younger people and independent travelers, would play a key role in the recovery of the industry, he added.

There is still uncertainty about when tourist numbers will return to pre-pandemic levels, he said.

 
 
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