The expansion of hotel booking capacity indicates Ho Chi Minh City hotel market’s progressive recovery.

The operation position of the hotels in Ho Chi Minh City has reportedly improved since the social distance was removed in the fourth quarter of 2021 and international airline routes were resumed in March 2022. Particularly, the supply expanded from 108 projects in the first half of 2022 to roughly 15,200 rooms, up 5% quarterly and 14% yearly. District 1 is anticipated to have 600 rooms from three new development plans by the end of the year, including Hilton Saigon, Fusion Original, and SOTETSU Hotel.

The average occupancy rate was 39%, up 19 percentage points quarterly and 21 percentage points yearly. The average room rate was 1.4 million VND per room per night, up 12% quarterly but down 13% annually, primarily as a result of the displacement of isolated hotel rooms with high prices.

According to hotels, the summer tourist season of 2022 is a bright spot that helps to increase room occupancy significantly because many hotels have reached 85-90% compared to 10-20% at the beginning of 2022. In addition, they also said that the room rate would increase even higher if the shortage of room staff is improved soon.

“The capacity of many hotels in the city has increased as a result of the resurgent demand from domestic and business travelers. India is one of many brand-new visitor markets that have emerged to fulfill both business and leisure needs. But there will be differentiation in the market, emphasizing quality over quantity” commented Mr. Mauro Gasparotti, Director, Savills Hotels Asia Pacific.

The reason that the operation of hotels gradually recovered is the impact of the welcoming  of 765,585 international visitors in the past 7 months, an increase of 100% compared to the same period in 2021, while domestic tourists has reached more than 13.3 million arrivals, an increase of 71.73% over the same period in 2021 (according to statistics from the Department of Tourism of Ho Chi Minh City).

However, according to the analysis of Savills experts, the market has improved but has not yet recovered, stemming from barriers to international tourism. Specifically, in Ho Chi Minh City, the market currently relies heavily on international visitors, however, this demand is not yet fully positive. Major markets such as China and Hong Kong remain closed and Vietnam’s visa policy has not improved. While Malaysia and Singapore have eliminated comparable laws as of the first quarter of 2022, Vietnam still has some entry requirements for international travelers, such as health insurance.

“Compared to many other countries in the region such as Thailand or Singapore, some policies to attract tourists in Vietnam are still not flexible, creating barriers to bringing tourists back. For instance, Vietnam grants a 15-day visa exemption period to travelers from other countries, but Thailand proposed in June 2022 to abolish visa fees for visitors from other countries and increase the admission length from 30 to 45 days for those visitors in the second half of 2022.”– Director of a travel agency in Ho Chi Minh City shared.

In the stated scenario, the Ho Chi Minh City Department of Tourism is working to revitalize the tourism industry in general and the hotel business in particular. Accordingly, the city is focusing on promoting the use of 3D technology in tourism promotion and strengthening its ability for communication and tourist attractions. Ho Chi Minh City will draw tourists from abroad. Specifically, the Department of Tourism also advocated the People Committee by extending the “Welcome to Ho Chi Minh City” program because of its effectiveness.

Source: Cong thuong