Hotel developers enjoy business prosperity
VnMedia has quoted the report of Savills, a real estate service provider, as saying that the total supply in the hotel market has decreased by three percent in the fourth quarter of 2011 in comparison with the previous year (7150 rooms from 47 hotels). The report also said that the market has been performing better than the previous quarter. Especially, 3-star hotels had very high occupancy rate of 68 percent.
The average capacity of the market increased by 11 percentage points in the fourth quarter to 62 percent, while the hotel room rate stayed unchanged at 1.73 million dong a night.
The turnover for every hotel room in the market reached 1,082,000 dong in the fourth quarter of 2011, an increase of 22 percent over the previous quarter. However, this represented a 15 percent decrease in comparison with the same period of the last year.
The report has pointed out that the revenue per room of 3-star hotels increased mostly sharply by 43 percent, followed by the increase of 4-star hotel room, at 17 percent, and 5-star hotel room at 15 percent.
According to Do Thu Hang, a senior executive of Savills Vietnam, Hanoi received 13.5 million travelers in 2011, including 1.9 million foreign travelers, an increase of 11 percent over the same period of 2010. Meanwhile, it was estimated that 11.7 million domestic travelers came to Hanoi, up by 10 percent.
The increase in the number of travelers to Hanoi has made experts believe that the hotel market would grow considerably in the next quarters, especially when domestic and foreign airlines are considering opening new air routes. The national flag air carrier Vietnam Airlines, for example, is planning to provide the flights on Hanoi – London route, while Jetstar Pacific is planning to open the Hanoi – Singapore, and Qatar Airways Hanoi – Doha.
Most of the hotel projects now under execution are located in the west of Hanoi, including Tu Liem district. The projects are expected to provide 3400 hotel rooms in the future, or 50 percent of the total supply. Most of the hotels have large scale which target businessmen. Meanwhile, most of the 3-4-star hotels are located in the central area which target travelers.
It is expected that in 2012, about 1020 hotel rooms would join the market. These include 830 5-star hotel rooms and 190 3-star hotel rooms.
High patience required
As hotel development is considered the business which can bring high profits, a lot of investors have decided to inject money in the field. They foresee that with the increasingly high number of tourists to Vietnam and the number of Viet Kieu returning to the homeland, the demand for hotel rooms would be very high.
However, experts have pointed out that the investments in hotels would require huge capital and high patience. They said that investors have to find the places on advantageous positions, which really costs a lot of money. Meanwhile, the bank loan interest rates are sky high. Therefore, hotel investors would not be able to take back capital soon, like apartment or office developers.
A local newspaper has quoted the owner of a four star hotel with 100 rooms in district 1 of HCM City as saying that investors would only get back the investment capital after 20-30 years, if they want to build a four star hotel, and the hotel room occupancy rate is always at 70 percent.
According to him, the land plots on the big roads in district 1 which could be used for hotels, are priced at 12-15 taels of gold per square meter. As such, a 100 square meter land plot on Ly Tu Trong Street is offering to sell at 50 billion dong.
The hotel owner himself has to spend 300 billion dong to build 120 4-star hotel rooms.
Source: VnMedia
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