Ho Chi Minh City: The hotel market has changed positively17/02/2023
The Ho Chi Minh City hotel market has improved significantly in 2022, but the average occupancy and room rates are still lower than pre-epidemic levels. With many positive signals, experts expect this market in Ho Chi Minh City to continue to recover more strongly in the second half of 2023, the period when target countries and territories will remove the “No COVID” policy.
According to data from Savills Group, in 2022 hotel occupancy will reach 45%, up 20 percentage points from 2021, but 23 percentage points lower than 2019.
The average room rate reached 1.6 million VND/room/night, up 21% compared to 2021 but still 18% lower than in 2019; in which, the 5-star segment improved the most with the average room rate increasing by 44%. Particularly in the fourth quarter of 2022, the room occupancy reached 62%, while the average room rate reached 1.8 million VND/room/night, up 9% compared to the third quarter of 2022.
Ms. Cao Thi Thanh Huong, Market Research Manager, Savills Ho Chi Minh City, said that besides the strong growth of domestic visitors, the resort market is gradually stabilizing again and improving thanks to international and business visitors. The basis of the above statement is that in the second half of 2023, many key markets will relax their epidemic prevention policies so that the number of international visitors will recover to help the service industry recover.
According to the Ho Chi Minh City Department of Tourism, tourism revenue and number of visitors increase year by year. Although Ho Chi Minh City has the highest number of tourists in the country, it has not reached the threshold before the epidemic in 2019. In 2022, Ho Chi Minh City will welcome nearly 3.5 million international visitors, an increase year-on-year but still 59% lower than in 2019.
The number of domestic visitors reached 25 million, up 167% compared to 2021, but 5% lower than in 2019. Tourism revenue in 2022 reached VND 120,000 billion, up 171% compared to 2021 but 14% lower than in 2019.
The city’s tourism industry recovers slowly due to dependence on international visitors and restrictions on visa policies as well as the loss of a large number of visitors from China.
Mr. Michael Kokalari – VinaCapital Market Economist said: “It is estimated that tourism revenue from international visitors in Vietnam contributes an estimated 10% of GDP each year. Therefore, the disruption of international visitors to Vietnam in 2020 will greatly affect the revenue of tourism and the resort service industry, the tourism industry in particular and the economy in general. We hope in the second half of 2023, when many key markets relax their epidemic prevention policies, so that this number of tourists can recover.”
Positive signals for accommodation and resort real estate in Ho Chi Minh City are expected from the second half of 2023 when the Chinese government gradually removes the “No COVID” policies.
Assessing this trend, Ms. Uyen Nguyen, Head of Consulting Department of Savills Hotels Asia – Pacific, said that China’s reopening of its borders and removal of isolation regulations is a good sign for Southeast Asian countries, especially Vietnam.
However, they will not come back anytime soon, it depends on many factors. The first group of visitors to return to Vietnam is the group of visitors on business and public service (MICE).
The group of resort tourists has more lag because it is necessary for other units in the industry such as travel agencies, restaurants, hotels, airlines to restore business to the way it was before the epidemic, only then did they come back.
Experts recommend that the hotel industry in Ho Chi Minh City should not only rely on tourists to improve revenue, because this group is also influenced by objective factors such as economic developments, politics. Therefore, the hotel industry needs to have more activities such as international conferences, exhibitions and fairs that will attract many groups of visitors to Vietnam.
Source: Doanh nghiep kinh te xanh