Scores of hotels up for grabs in HCMC as economy fails to cheer

Trung, a real estate broker in the downtown area, said in the last two months he has seen a large number of hotels being put up for sale.

Last month a three-star hotel with 10 floors in District 1 was listed at VND270 billion ($11.47 million); this month a hotel near Ben Thanh Market was available for VND150 billion.

Others are available from as low as VND25 billion, with many owners willing to negotiate prices if potential buyers seem interested.

Tourism has not recovered to pre-pandemic levels, and the economic slowdown has added to hotel owners’ woes.

"Some owners are selling to switch to a new industry," Trung said.

Hung, a broker who works near Tan Son Nhat International Airport, said hotel prices have fallen rapidly since sellers want to get rid of them quickly.

A hotel in Tan Binh District has seen its asking price fall from VND120 billion in May to VND85 billion now, a 29% decline, but the market expects an even lower price, he said.

Nguyen Huu Thien, CEO of property investment firm Sabay Home, said hotel prices fell by 10-20% in May and June, with some large ones falling even by 30%.

The hotel industry was doing well even in the first quarter, thanks to Tet, but things started to change in the second quarter when people were tightening their purse strings and few traveled, he said.

"More hotels are likely to be sold since signs of economic recovery, both globally and domestically, are weak."

Property consultancy JLL said a few days ago that it had successfully arranged acquisitions of the three-star Ibis Saigon South and four-star Capri by Frasers, both in District 7.

Meanwhile, several hotels have shut down after years of operation.

Norfolk in District 1, which has more than 100 rooms, announced in May it had ended its 30-year existence.

In tourist areas such as Bui Vien Street and Bui Thi Xuan Street in District 1 there are closure signs outside some hotels.

Savills Vietnam data showed that at the end of the first quarter around 67% of hotel rooms had been closed for renovation, and was is unclear when they would resume operation.

The city received 8.54 million tourists in the first quarter, 12% of them foreigners.

Trang Minh Ha, chairman of investment firm North Stars Asia, said mergers and acquisitions have been going on in the hotel industry since 2020 due to Covid-19, but have picked up pace now since economic recovery has been slower than expected.

Vietnam’s visa policy is more cumbersome than its neighbors’ and therefore the number of foreign tourists has not increased as quickly as expected, he said.