Apr 17, 2012

Vietnam - New hotel development tendency: owned by Vietnamese, managed by foreigners


VietNamNet Bridge – A lot of well-known big hotels in Vietnam have changed hands recently. However, they would not change their names.

A real estate expert said that he does not think Daewoo hotel would change its name after it has a new owner, because Daewoo is a well-known strong brand in Hanoi. The value of the merger & acquisition deal has not been revealed, but he is sure the Vietnamese new owner had to pay for the brand as well. Besides, the experts think it would be not a wise move if the new owner uses another name, because this means that he would have to start the business from the very beginning.

In most of the hotel and resort transfer deals made recently, the old brands developed by the previous owners have been retained in accordance with the provisions on branding which have not been made public.

BRG bought the Hilton Hotel several years ago, but the name “Hilton” still has been associated with the hotel after it fell into the hand of the new owner.

Sovico has bought all the stakes of Furama Resort Da Nang, but it has not intended to change its name. Similarly, Victoria, the name of the chain of hotels and resorts, has been maintained by Thien Tourism Company after it bought from Hong Kong’s EEM Victoria.

The expert said that the value of the material facilities of the hotels could not be as high as the value of the brand. Meanwhile, Vietnamese enterprises now still cannot develop new brands for their hotels. Especially, many of the new owners do not have experience in the hotel management field; therefore, it would not be an easy task to develop the hotels under the new names.

Besides, the foreign previous owners might have set up strict requirements in the transfer deals to be sure that their names would not be influenced. Most of the new investors have been keeping the same staff, especially the high ranking management posts held by foreigners.

Analysts have commented that Vietnamese businessmen have made good bargains when buying back the hotels which have been operating for many years and bringing stable source of income. They believe that the businessmen would be able to recover the investment capital just after 9 or 10 more years.

It’s easier built than managed

The strong development of hotels and resorts recently in Vietnam has caught the attention of many management companies. A series of well-known hotel management groups in the world have been present in Vietnam, including Six Senses, Accor or Marriott.

To Nhu Tung, Director of a four star hotel, said that most of the hotels and resorts belonging to Vietnamese businessmen, have still been managed by managers. It is because Vietnamese people still lack the management skills. There are very few 100 percent Vietnamese owned hotel management companies, while most of them are managing the hotels built by their parent groups.

Tung’s resort has also been managed by a foreign company, even though the resort owner has to spend a big sum of money to hire the manager.

In Vietnam, Accord Group with Sofitel and Novotel brands is managing more than 20 hotels. Meanwhile, Six Senses Resorts and Spas, which has been in Vietnam not for a long time, is managing the big resorts in Nha Trang, Con Dao, Da Lat and Phu Quoc island.

Ninh Van Bay, a Vietnamese tourism real estate firm also signed a contract with the brand on the management of a resort in Khanh Hoa province. Sixsense Ninh Van Bay, the high grade resort with 58 villas has become famous. The firm has continued cooperating with the brand in the Six Senses Saigon River project.

Not only managing 4-5 star hotels, the brands have also reached out to three star hotels as well. Accord, after tens of years focusing to develop Novotel brand (4 star) and Sofitel (5 star), has decided to bring Pullman (5 star), Mercure (3 star) and Ibis (3 star) to Vietnam through franchising contracts.

Duy Anh



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