Hotel market forecast to recover after tourism reopening

02/04/2022

After a long hiatus caused by the COVID-19 pandemic, Vietnam’s tourism is gradually reopening with the resumption of international flights, which is considered a positive factor helping recover the hotel market.

Hotel market forecast to recover after tourism reopening

Hanoi – After a long hiatus caused by the COVID-19 pandemic, Vietnam’s tourism is gradually reopening with the resumption of international flights, which is considered a positive factor helping recover the hotel market.

As the hotel market mainly relies on strong tourism needs in the country, the pilot program to welcome foreign visitors to some localities is a good opportunity that contributes to promoting the quick recovery of the Vietnam tourism market, according to the CBRE Vietnam.

The company’s hotel market view for 2021 said that last year, Vietnam was impacted severely by the fourth wave of the COVID-19 pandemic. The capital city of Hanoi also suffered from an increasing number of infections, which led to a social distancing period from July to September. Since COVID-19 caused disruptions to the construction of major projects, the 4-5 star hotel market in the city remained in quiet status and welcomed only one 5-star hotel – Capella Hanoi with 47 rooms at the beginning of the year. As of late 2021, Hanoi had a total of 8,407 rooms from 38 projects.

Due to the prolonged epidemic throughout the year, there was a further decrease in the average daily rate (ADR) in 2021 to 95.5 USD, down 5.7 percent compared to 2020 and 19.7 percent compared to the pre-COVID level in 2019. In 2021, the hotel market in Hanoi continued to suffer a fall in occupancy rate which was 30.6 percent, down 4.5 percentage points against 2020 and 50.6 percentage points against 2019.

This year, although the new supply is still limited due to the pandemic crisis delaying the construction process, the rapid vaccination rate and the reopening of international passenger routes signal the recovery of Hanoi’s tourism market.

Construction on several international brand projects such as Four Seasons, Wink, Dusit và Fairmont is expected to be completed in late 2023, thus contributing to bringing a new supply to the market.

Meanwhile, CBRE experts predict that 2022 would open a golden opportunity for Ho Chi Minh City’s 4-5-star hotel market, with encouraging progress in the first half and more accelerating growth in the second half.

The market is expected to welcome a new supply of 2,803 rooms from 13 projects, accompanied by the entrance of multiple high-class hotel brand names such as Ritz Carlton, Mandarin Oriental, Hotel Indigo, and Avani.

Source: Vietnam Investment Review

Share this post