Factors affecting the resort real estate market

Mr. Le Minh Dung - Deputy General Director of BIM Group

As one of the major companies developing resort real estate, what factors, in your opinion, will impact this segment in 2018?

The core factor driving the development of resort real estate remains Vietnam's tourism potential. In recent years, tourism statistics have consistently shown impressive figures, especially 2017, which was considered a record year for Vietnamese tourism with nearly 13 million international visitors.

A new trend in the tourism industry over the past year is the significant increase in spending power of domestic tourists. While 5-10 years ago, people primarily chose budget guesthouses or 2-3 star hotels for their vacations, now it's extremely common for domestic tourists to stay at high-end 4-5 star resorts. This has a huge impact on the resort real estate market; 73 million domestic tourists annually represent an incredibly attractive market for investors.

Entering 2018, experts assessed and expected that Vietnam's tourism industry would continue its growth momentum thanks to the development and proliferation of low-cost airlines, technological advancements in the tourism sector, visa exemption policies, and the increasing demand for tourism in a developing economy with rising per capita income.

In addition, other factors that could positively impact the resort real estate market include: the stability and development of the macroeconomic economy; the rapid growth of the middle-income and high-income investor segments; and the possibility of positive developments in the legal framework.

Regent Residences Phu Quoc was a standout project by developer BIM Group in 2017.

So what are your predictions for the resort real estate market in 2018?

With strong growth in tourism, the resort real estate market is sure to remain vibrant in 2018. Guaranteed return policies will continue to play a key role in attracting individual investors. However, I predict that next year, customers will be more cautious about these guaranteed rates and may focus on the true value of the resort property.

At the same time, through the development and selection process, the market and investors will certainly become more professional and demanding of investment products. Therefore, the market will have less room for small-scale projects, inexperienced developers, and projects with unclear development potential. Instead, projects with professional international management units, reputable developers, and clear, integrated planning will be more favored.

Many people believe that there is an oversupply of condotel units. What is your opinion on this statement?

I agree that, considering the market as a whole, the supply of condotel apartments is currently very large and has shown rapid growth in recent years. However, there are a few points that I believe are noteworthy in this regard:

The hottest and seemingly saturated markets are Nha Trang and Da Nang, with numerous projects launching for sale, many of which offer thousands of units. Given the already large supply of hotels in these cities, the influx of apartments could lead to oversupply in the medium term. Meanwhile, in emerging markets like Ha Long, Phu Quoc, and Vung Tau, although growth has been strong, I believe there is still significant room for further development.

Furthermore, in my personal observation, the number of truly high-quality condotel products remains quite limited. Projects that guarantee three key factors: developed by a reputable investor; managed and operated by a prestigious and trustworthy company; and located within a well-planned and visionary resort complex, will undoubtedly maintain a strong position in the market.

The InterContinental Phu Quoc Long Beach Resort & Residences project, developed by BIM Group, is about to open for business.

What is BIM Group's strategy for developing resort real estate in the coming period, sir?

BIM Group's primary and sole guiding principle is to provide the best real estate products and investment opportunities for its customers. Specifically in the resort real estate sector, in the near future, BIM Group will pursue three core goals and strategies:

Continuing to focus on emerging markets with significant growth potential, Phu Quoc and Quang Ninh are promising destinations. With their immense tourism advantages and long-term vision, these two locations are sure to achieve even greater success and attract more investment, soon rivaling Vietnam's tourism hubs like Da Nang and Nha Trang.

Diversifying our product and project portfolio is also a very important goal for BIM Group. Our resort real estate products will target a wide range of customers in different segments. A key focus in our short-term plan is to enable mid-level investors to own their own high-end second homes.

Furthermore, BIM Group will continue to collaborate with and seek reliable hotel and resort management and operation partners both domestically and internationally. A significant part of the success of our recent projects stems from these collaborations, and this is a key strength of BIM Group in the current resort real estate market, building trust with our valued customers and investors.

Ngoc Anh - Dung

The Thanh