With the theme “Elevating Vietnam Resort Real Estate”, speakers shared perspectives on business operations, market prospects as well as discussed opportunities to improve the position of the resort real estate industry.
Meet The Expert conference image.
Vietnam's resort real estate market is facing many challenges. Mr. Mauro Gasparotti, Director of Savills Hotels and host of the Meet the Experts event, shared: "Before the pandemic, Vietnam's tourism industry recorded an impressive growth rate in the number of visitors. Vietnam's tourism image also became familiar and gradually became a prominent resort destination in Southeast Asia, competing with international destinations in the region."
“However, after a period of 'hot' growth, the market is slowing down with many projects being implemented unfinished as well as some projects that have not achieved optimal efficiency. However, some quality hotels and resorts still recorded positive operating results and maintained a good recovery momentum. Careful planning and proper operational management are prerequisites to support the project recovery process more effectively,” Mr. Mauro added.
Mr. Mauro Gasparotti, Director, Savills Hotels APAC.
Inflation, political conflicts, high airfares and a shortage of skilled workers have all hampered the recovery of tourism activities. In Vietnam, the recovery has been uneven. Hotel occupancy rates in Ho Chi Minh City are gradually returning to pre-pandemic levels. Meanwhile, the Nha Trang and Da Nang markets are still facing many challenges; operating profits in these areas are still 40% - 60% lower than Bali and Phuket.
According to Ms. Fenady Uriarte, Business Development Manager, Southeast Asia market at STR, “As of the end of February 2023, the revenue per available room index in Southeast Asian countries is very close to the pre-pandemic level, however, the Vietnamese market is still facing many challenges as this index is -33.4% lower than in 2019. The average room rate is a bright spot in the market, recording a good recovery rate. The reopening of Northeast Asian markets such as China and Japan is expected to bring positive signals to the Vietnamese tourism industry.”
Ms. Fenady Uriarte, Business Development Manager, Southeast Asia Market at STR.
In addition to the slower-than-expected recovery of tourism demand, the recent credit control policy has also significantly impacted development activities, causing many projects to be delayed or suspended. On the other hand, project repositioning activities are taking place more strongly as the market records many hotel owners working with hotel operators to upgrade and renovate projects. Cooperating 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 Operation of 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 discussed the picture of the resort industry, the development of coastal destinations as well as shared solutions to contribute to promoting the recovery process and sustainable market development.
Vietnam still lacks new accommodation products that meet the needs of young customers - who are more interested in experiential spaces than simply accommodation. Most hotel brands in the market today are traditional, with not much presence of lifestyle brands. It is expected that by 2026, lifestyle brands will increase their market recognition with the entry of brands such as Voco, Hyde, Hotel Indigo, Caption by Hyatt, L7 and Garrya.
In Vietnam, about 30% of the population belongs to the Millennial generation, and this generation is promoting and shaping new tourism trends in the market. According to Mr. Norbert Vas, Operations Director of Archipelago Indochina, “The Vietnamese market has potential for the development of the lifestyle model thanks to its young, creative workforce as well as a large potential customer base. However, to be able to convey the lifestyle spirit well, this model needs to be carefully planned and developed properly.”
Mr. Norbert Vas, Operations Director of Archipelago Indochina.
At the conference, speakers from QUO Global, Dulux Professional, IHG Hotels & Resorts, SOHO Hospitality and Delivering Asia Communications shared emerging trends in the market including color trends, the potential of converting buildings into hotels, the trend of luxury culinary experiences and the role of brand communication in the resort real estate industry.
In addition, representatives from Savills Viet Nam, Lodgis Hospitality Holdings, Swiss-Belhotel International, TCC Land International (Thailand), Tanzanite International, Baker McKenzie, Brand & Co and EuroStyle discussed the prospects of Branded residence and luxury projects in Vietnam.
According to Savills Hotels statistics, luxury supply accounts for 2% of the total current hotel rooms, but accounts for 5% of the total supply being deployed and expected to be put into operation 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 Mr. Anthony Moulton, CEO of Brand & Co, “Time and space are gradually becoming a new luxury concept”.
Mr. Anthony Moulton, CEO of Brand & Co.
High net worth customers prefer branded residence products due to the value of time and space that this product brings. The concept of true luxury must create a relaxing space for the mind through the quality of space, services, amenities, light and air; not simply relying on the use of high-quality materials.
“It can be said that the appeal of luxury products comes from two factors: prestige and the affirmation of the owner's image,” Mr. Moulton added.
The discussion session took place with the participation of experts in the real estate and hotel sector.
Changes in demographics, with higher demands on experience, push hotels to optimize and create new spaces, bringing more special emotions and experiences to customers.
“This demand is the driving force for Vietceramics to bring to the market the most advanced building material solutions today, provided by leading partners in the world. Our collections of tiles and sanitary equipment meet the most stringent aesthetic requirements thanks to advanced production techniques combined with skillful craftsmanship. In particular, they are also integrated with the most modern technologies to help take care of the comprehensive health of users. We are confident in accompanying investors to bring a perfect resort space, for every safe step, for every most relaxing moment of customers”, Mr. Do Hong Phuc, General Director of Vietceramics shared more.
Focusing on sustainable development factors and using environmentally friendly materials is a trend that is gaining attention in the industry. Ms. Nguyen My Lan - General Director of AkzoNobel Decorative Paints Vietnam said: "Eco-friendly architecture is an inevitable trend globally. Therefore, AkzoNobel always strives to research color trends, keep up with consumer preferences, and constantly develop sustainable, environmentally friendly and healthy products. This year, AkzoNobel is honored to accompany Savills Hotels with the desire to connect and get closer to partners and customers. In addition, this is also an opportunity for us to share and contribute to the development of sustainable solutions for the industry. With 20 years of researching trends and analyzing colors, we have forecasted global trends through aspects of life such as society, environment, and economy to meet consumer needs. By translating emotions and real needs into colors, we hope to inspire customers to transform the space around them."
