The hotel market in Ho Chi Minh City has recovered by more than 92%08/08/2023
According to Savills’ report, in the first half of 2023, Ho Chi Minh City welcomed the largest number of tourists in Vietnam, with 18 million visitors, of which only 11% were international tourists (approximately 1.9 million visitors).
In the first half of 2023, the occupancy rate of hotel rooms in Ho Chi Minh City reached 64%, recovering over 92% compared to the first half of 2019 (pre-COVID-19). The average room price stood at 1.9 million VND per room per night, representing 97% of the rates in 2019.
This information was reported in the “Ho Chi Minh City Hotel Market Report for the First 6 Months of 2023” recently published by Savills Vietnam.
According to Savills Vietnam, the summer vacation period did not significantly impact the hotel market as the city’s hotel industry primarily relies on business travelers. In the second quarter of 2023, the occupancy rate was 60%, an 8-percentage-point decrease from the previous quarter, and the room price was 1.9 million VND per room per night, a 2% decrease from the previous quarter.
The overall activity in the city’s hotel market showed a declining trend. However, the hotel system in District 7 reached an occupancy rate of 61%, a 12-percentage-point increase from the previous quarter and a 7-percentage-point increase from the previous year, thanks to the participation of guests attending events at the Saigon Exhibition and Convention Center (SECC).
According to Savills Vietnam’s report, in the first half of 2023, Ho Chi Minh City hosted the largest number of tourists in Vietnam, with 18 million visitors, of which only 11% were international tourists (about 1.9 million visitors). The recovery rate of international visitors to the city reached about 46% compared to 2019, which is lower than the national recovery rate of 66%. The overnight stay rate (approximately 19%) was lower compared to other destinations.
The city primarily caters to business travelers and is considered a transit hub between provinces and cities. Tourists are willing to pay higher prices for accommodations, reaching 1.5 million VND per guest per stay (the second-highest in the country, after Hanoi). Consequently, Ho Chi Minh City has the highest lodging revenue in Vietnam, exceeding 5,000 billion VND in the first half of 2023, representing a 25% increase from the previous year.
Regarding the prospects of the Ho Chi Minh City hotel market from now until the end of 2023, experts from Savills Vietnam believe that Chinese tourists are the second-largest market in Vietnam during the first 6 months of 2023 but only reached 22% compared to the first half of 2019.
By June 2023, the capacity of international flights from China accounted for only 5% of the total flights from the mainland, a decrease from the 13% before the pandemic. It is expected that Chinese tourists will increase in the second half of 2023 as the third and fourth quarters are the peak seasons.
Foreign tourism from China is predicted to fully recover by 2024-2025. This is an opportunity for the city’s hotel market in particular and Vietnam in general.
Troy Griffiths, Deputy Managing Director of Savills Vietnam, noted that Vietnam’s international visitor recovery is slower compared to other countries in the region. With the gradual recovery of Asian tourists and strong domestic tourism demand, the market is expected to fully recover by 2024.
In terms of hotel supply in Ho Chi Minh City, Savills Vietnam stated that there are currently 15,662 hotel rooms from 110 projects, an increase of 1% quarterly and 3% annually after the Mai House Saigon hotel (180 rooms) was certified as a 5-star property.
Of the 404 temporarily closed rooms from the post-pandemic period until now, 45% of the rooms are being renovated, and 55% of the remaining supply has no information about the reopening date.