VietNamNet Bridge – The strong capital flow into the hotel
sector has created the profuse supply with luxurious hotels established all
over the country. The similar thing was seen a decade ago, when Vietnam
witnessed the investment boom.
Despite the gloomy real estate
market, investors still keep injecting money in hotel projects. A report by STR
Global, a market research firm, released in July 2012, Vietnam is one of the
countries in Asia Pacific which has the highest number of hotel rooms – 7100.
Dau tu newspaper has estimated
that 4500-5000 hotel rooms which can meet 4-5 star standards would become
operational by early 2013.
Vietnam once witnessed the hotel
investment boom in 1995-1998, when foreign direct investment (FDI) created
well-known hotels such as Hilton, Daewoo, Melia in Hanoi, or Renaissance
Riverside and New World in HCM City.
The movement of investment in luxurious resorts, hotels
One of differences between the
hotel investment boom in 1995-1998 and the one in 2012, is the appearance of
big scale resorts now, which was not seen in the past. The Ho Tram Strip
Complex project in Ba Ria – Vung Tau province, is one of the huge projects with
the total investment capital of 4.2 billion dollars.
Lloyd Nathan, CEO of Asian Coast
Development Ltd, the investor of the project, said MGM Grand Hotel with 541
rooms is expected to make debut in early 2013. Meanwhile, the second MGM Grand
Hotel with 559 rooms would be kicked off soon.
In Thua Thien – Hue province in
the central region, the first phase of the Laguna Lang Co resort with the total
registered investment capital of 900 million dollars would be operational from
November 1, 2012, with Angsana hotel (229 rooms), Banyan Tree resort and a
18-hole golf course.
The ambitious investor plans to
execute the next phases of the project which would have seven hotels in total
with 2000 hotel rooms, apartment blocs and villas to be situated on an area of
280 hectares.
There is a special thing in the
newly developed projects that besides hotel rooms, the resorts would have
villas and apartments for sale, while the buyers would be able to rent the
villas and apartments.
At Hyatt Regency in Da Nang City,
for example, besides the 200 hotel rooms, there are also 182 apartments and 27
villas. At Vinpeal Luxury Da Nang, there are 200 hotel rooms and 39 villas
opened for rent.
This proves to be the model
followed by many other investors, who are developing projects, including Crowne
Plaza Nha Trang or Blue Saphire in Vung Tau City.
Oversupply warned
Experts have voiced their
warnings about the oversupply of hotel rooms, which would put big difficulties
for investors. The problem is that a big amount of hotels has been put into
operation in the context of the economic downturn, which has led to the
decrease of the number of travelers.
Kai Marchus Schroter, CEO of the
HTM Hotel Management and Tourism, said hotel developers would meet big
difficulties in the next year, partially because of the oversupply of hotels
and the cutthroat competition among the developers in some certain cities and
tourism sites.
In the sea city of Da Nang in the
central region, for example, there were only two 5-star hotels in 2010, namely
Hoang Anh Gia Lai and Furama Resort, while the figure has increased recently
with the appearance of Mercure, InterContinental, Hyatt Regency and Crowne
Plaza.
Ha Noi Moi newspaper has quoted
CBRE’s report, a real estate service provider, as saying that Hanoi would have
300 3-4 star hotel rooms in the fourth quarter of 2012, while it would have
1000 more hotel rooms in 2013.
Compiled by C. V
Business & Investment Opportunities
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