Elevating the status of the hotel and resort real estate industry in Vietnam.

Under the theme "Elevating Vietnam's Resort Real Estate," speakers shared insights into business operations, market prospects, and discussed opportunities to improve the position of the resort real estate industry.

The Vietnamese resort real estate market is facing numerous challenges. Mauro Gasparotti, Director of Savills Hotels and host of the Meet the Experts event, shared: “Before the pandemic, Vietnam’s tourism industry recorded impressive visitor growth. The image of Vietnamese tourism also became familiar and gradually emerged as a prominent resort destination in Southeast Asia, competing with international destinations in the region.”

“However, after a period of rapid growth, the market is slowing down with many unfinished projects and some projects not achieving optimal efficiency. Nevertheless, some quality hotels and resorts are still recording positive results and maintaining a good recovery momentum. Careful planning and meticulous operational management are key factors supporting a more effective project recovery process,” Mr. Mauro added.

Inflation, political conflicts, high airfares, and labor shortages in the industry are impacting the recovery of tourism. In Vietnam, the recovery process is uneven. Hotel occupancy rates in Ho Chi Minh City are gradually recovering to pre-pandemic levels. Meanwhile, the markets in Nha Trang and Da Nang are still facing many challenges; operating profit margins in these areas remain 40%–60% lower than in Bali and Phuket.

According to Fenady Uriarte, Business Development Manager for Southeast Asia at STR, “As of the end of February 2023, the revenue per available room in Southeast Asian countries is very close to pre-pandemic levels. However, the Vietnamese market is still facing many challenges, with this figure being -33.4% lower than in 2019. Average room rates are a bright spot in the market, showing a good recovery rate. The reopening of Northeast Asian markets such as China and Japan is expected to bring positive signals to Vietnam's tourism industry.”

Besides the slower-than-expected recovery of tourism demand, credit control policies in recent times have also significantly impacted development activities, causing many projects to be delayed or suspended. On the other hand, project repositioning activities are becoming more active as the market sees many hotel owners working with hotel operators to upgrade and renovate their projects. Collaborating with hotel brands helps projects increase their competitiveness in the market through chain scale, brand standards, and marketing and distribution networks.

During the discussion session on the resort real estate industry, representatives from RMIT University Vietnam, Radisson Hotel Group, Archipelago Indochina, La Vie Hotels & Resorts, VinHMS, TUI Blue Hotels, Qatar Airways, TIA Wellness Resort, and Nova Hospitality openly exchanged views on the resort industry landscape, the development of coastal destinations, and shared solutions to promote the recovery and sustainable development of the market.

Vietnam still lacks new accommodation products that meet the needs of young travelers – a group that prioritizes experiential spaces rather than simply places to stay. The majority of hotel brands currently on the market are traditional, with little presence of lifestyle-focused brands. It is projected that by 2026, lifestyle brands will increase their market presence with the entry of brands such as Voco, Hyde, Hotel Indigo, Captain by Hyatt, L7, and Garrya.

In Vietnam, approximately 30% of the population belongs to the Millennial generation, and this generation is driving and shaping new travel trends in the market. According to Norbert Vas, Operations Director of Archipelago Indochina, “The Vietnamese market has great potential for the development of lifestyle tourism thanks to its young, creative workforce and large potential customer base. However, to effectively convey the lifestyle spirit, this model needs careful planning and meticulous development.”

At the conference, speakers from QUO Global, Dulux Professional, IHG Hotels & Resorts, SOHO Hospitality, and Delivering Asia Communications shared emerging market trends, including color trends, the potential of converting buildings into hotel models, the trend of luxury dining experiences, and the role of brand communication in the resort real estate industry.

In addition, representatives from Savills Vietnam, Lodgis Hospitality Holdings, Swiss-Belhotel International, TCC Land International (Thailand), Tanzanite International, Baker McKenzie, Brand & Co, and EuroStyle discussed the prospects of branded residences and luxury projects in Vietnam.

According to Savills Hotels statistics, luxury hotel supply accounts for 2% of the total current hotel rooms, but represents 5% of the total supply under development and expected to be operational in the next three years.

Alongside the increase in hotel room supply, the luxury branded residence market is also gaining attention in Vietnam. According to Anthony Moulton, CEO of Brand & Co., "Time and space are gradually becoming a new luxury concept."

High-net-worth clients favor branded residences due to the value they offer in terms of time and space. True luxury should create a relaxing space for the mind through the quality of the environment, services, amenities, lighting, and atmosphere, rather than simply relying on the use of high-end materials.

"It can be said that the appeal of luxury products comes from two factors: prestige and the affirmation of the owner's image," Moulton added.

Demographic changes, with higher demands for experiences, are driving hotels to optimize and create new spaces, delivering more unique emotions and experiences for customers.

“This demand is the driving force behind Vietceramics bringing the market the most advanced building material solutions available today, supplied by leading partners worldwide. Our collections of tiles and sanitary ware meet the most stringent aesthetic requirements thanks to advanced manufacturing techniques combined with skillful craftsmanship. In particular, they also incorporate the latest technologies to comprehensively care for the health of users. We are confident in partnering with investors to create a perfect resort space, ensuring safe steps and the most relaxing moments for our customers,” added Mr. Do Hong Phuc, General Director of Vietceramics.

Focusing on sustainable development and using environmentally friendly materials is a growing trend in the industry. Ms. Nguyen My Lan – General Director of AkzoNobel Decorative Paints Vietnam, said, “Eco-friendly architecture is an inevitable global trend. Therefore, AkzoNobel always strives to research color trends, keep up with consumer preferences, and continuously develop sustainable, environmentally friendly, and health-beneficial products. This year, AkzoNobel is honored to partner with Savills Hotels with the desire to connect and get closer to our partners and customers. Furthermore, this is also an opportunity for us to share and contribute to the development of sustainable solutions for the industry. With 20 years of research and analysis of color trends, we have predicted global trends through various aspects of life such as society, environment, and economy to meet consumer needs. By translating emotions and practical needs into color, we aim to inspire customers to transform the spaces around them.”

Bi Le