Hotels that consider the integration of digital technologies into their services will change the market in Vietnam, according to Grant Thornton’s Vietnam Hotel Survey 2018.
Continuing on from last year’s momentum, Vietnam is rapidly growing as a top tourism destination among Southeast Asian countries. The country is the sixth-fastest growing country in the world as a tourist destination and the fastest in Asia, according to a report from UNWTO.
The hotel industry, following an increase in visitor numbers, is receiving a massive amount of investment. According to the Ministry of Culture, Sports and Tourism, in 2017 there were 79 new upscale (three to five-star) hotels brought into operation, ten of which were five-star, with a total of 101,400 rooms, up 10 per cent over 2016.
The analysis of upscale hotels was conducted by star ranking and region. By star ranking, room rates for four-star hotels continued to increase though only slightly, by 1 per cent, reaching $75.2 in 2017. Five-star hotels saw rates recover from 2016’s decline, reaching $107.6, an increase of 4.2 per cent.
RevPAR for hotels continued to increase, but at a different pace for each star ranking: 7.6 per cent for four-star hotels and 10.2 per cent for five-star hotels.
Overall, occupancy rates improved 5 per cent for both star rankings (4.8 per cent for four-star and 5 per cent for five-star). Throughout the country, however, changes in occupancy rates were not the same in all three regions. The central region saw the most significant rise in occupancy, of 7.5 per cent, followed by the north with 6.4 per cent and the south with 2.2 per cent.
2017 witnessed continued improvements in profitability in the upscale hotels sector. EBITDA increased by 1.7 per cent, attributed to a drop in undistributed operating expenses of 1.8 per cent while other expenses remained roughly the same.
Regarding guests, FIT/Leisure travelers and Tour groups accounted for the highest proportion of guests staying at upscale hotels, together accounting for more than 60 per cent of all guests. The third-largest segment – Corporate/Business travelers – rose just 0.5 per cent.
The structure of reservation channels in 2017 remained unchanged from 2016. Tour Operators/Travel Agencies is the major channel for reservation at four-star and five-star hotels, representing 33 per cent, while Direct Bookings fell 1.6 per cent and OTAs increased only marginally.
2017 saw an increase in the number of hotels who have decided that digital technology is vital to their business to help combat growing competition and to set them apart from older hotels or those with older mindsets. The vast majority of hotels consider the integration of digital technologies a factor that will change Vietnam’s hotel market.
Vietnam Economic Times
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