"Recharging" the Vietnamese Real Estate and Resort Industry

Organized by WeHub, Savills Hotels, Dulux Professional, Vasta Stone, and over 30 leading industry partners, the conference provided a valuable platform for investors, hotel owners, hotel operators, designers, and consultants to enhance their expertise, stay updated on market information and trends, and energize a challenging capital market.

The hotel business in Southeast Asia is on the path to recovery as countries fully reopen to international tourism, including the resumption of flights to China and the increased frequency of airline services. However, factors such as staffing shortages, rising energy costs, geopolitical conflicts, high airfares, and economic uncertainties continue to impact the region's hospitality market.

In Vietnam, the recovery of the hotel business is uneven. Occupancy rates and average room rates for hotels in Ho Chi Minh City are gradually recovering to pre-pandemic levels. Meanwhile, resort markets such as Nha Trang – Cam Ranh, Da Nang, and Phu Quoc are still facing many challenges in improving occupancy rates.

In the first nine months of 2023, the Asian tourist market remained 33% lower than pre-pandemic levels. South Korea is currently the largest international tourist market to Vietnam with 2.6 million visitors; however, the total number of visitors is still about 18% lower than in 2019. The Chinese market is gradually recovering, but is only equivalent to 28% of the same period in 2019. The American and Australian tourist markets were about 7% lower than the same period in 2019, totaling 1.1 million visitors.

The oversupply situation at some destinations, coupled with the slow recovery of key international tourist markets such as China and Russia, is further increasing pressure on the recovery of the resort industry.

Over the past 10 years (2013-2023), the majority of hotel room supply has been concentrated in the cities of Nha Trang, Phu Quoc, Da Nang, Ha Long, and Hoi An – Quang Nam, accounting for approximately 54% of the total new supply nationwide. Accordingly, supply in coastal destinations increased by an average of 16% per year over the past decade, significantly higher than Ho Chi Minh City and Hanoi, where new supply only increased by an average of 6% per year.

Several destinations such as Mui Ne, Nha Trang, and Ha Long are focusing their development on the same segment. Specifically, over 80% of the supply in these locations belongs to the mid-scale (mid-to-upper mid-scale) segment. This segment faces high price competition, not only from hotel supply but also from owner-operated resort apartment projects that offer flexible pricing policies to attract demand.

Mr. Mauro Gasparotti, Director of Savills Hotels and host of the Meet the Experts event, commented: “The problem is not just overdevelopment in some destinations; rather, it stems from creating products that are not suited to market conditions. The growth of the tourism industry, especially international demand before the pandemic, has boosted the development of resort real estate in general and hotels in particular. However, some investors rushed into the market without thorough research during the planning process, leading to a supply-demand imbalance in some destinations. In addition, we have also observed a focus on quantity over quality in some projects. The lack of consideration for market characteristics and industry trends poses many risks when projects are developed but fail to meet the experiential needs of tourists, especially now that Vietnamese tourists can easily travel abroad in addition to domestic destinations.” than".

During the discussion session on the operation of the resort real estate industry, representatives from Accor Hotels Group, Booking.com, VinHMS, Sovico Hospitality Group, Hoiana Resort & Golf, and Wyndham Hotels & Resorts openly exchanged views on the potential and challenges of Vietnam's resort industry, the competitive advantages of Vietnam's tourism industry, and solutions to promote the recovery and sustainable development of the market.

During the discussion, experts unanimously agreed that although the hotel business still faces many challenges, positive signals regarding demand in the last months of 2023, along with the new visa policy, are expected to be drivers of growth for the resort industry in 2024.

At the conference, speakers from Dulux Professional, The Ascott Limited, Yotel, and Tilleke & Gibbins shared emerging market trends, including color trends, the potential of resort models targeting retirees in Vietnam, value creation through building repurposing, and the impact of the draft Land Law 2023 on the real estate market.

In addition, representatives from Savills Vietnam, Lodgis Hospitality Holdings, Nobu Hospitality, Shangri-La Group, Radisson Hotel Group, TCC Land International (Thailand), and Indochina Capital discussed the prospects of branded residences and luxury projects in Vietnam. Simultaneously, experts shared their professional perspectives and discussed the application of culinary and experiential elements in the development of mixed-use projects to enhance attractiveness and meet market demands.

The tourism industry needs to adapt to changes in tourist consumption behavior after the pandemic. To increase competitiveness on the international stage and retain its rich domestic tourism market, Vietnam needs to develop diverse products to meet the needs of various customer segments. Demographic changes, with higher demands for experiences, drive the tourism and resort industry to deliver more unique values ​​and emotions to customers, focusing on integrating local culture, community characteristics, and natural features into projects. This process requires coordination from local authorities, organizations, and businesses in the industry to ensure sustainable and effective development of the tourism and resort sector.

Nguyen Thu Thao – Marketing Director at Vasta Stone shared: “We believe in the power of space in creating memorable moments in life. Using world-leading advanced technology to create 'Proudly Made in Vietnam' sintered stone products is a perfect foundation to contribute to the development of quality hotel and real estate projects in Vietnam. Vasta Stone is proud to be a partner in this development process and contribute to creating sustainable, high-class, and meaningful spaces.”

Nguyen My Lan, General Director of AkzoNobel Vietnam Decorative Paints, said: “The real estate and resort market is entering a crucial phase for recovery. This is a time when businesses and investors need to make greater efforts to bring new experiences and products that meet the actual needs of customers. As a leading company in the paint and coatings sector, we understand the importance of color to customer emotions.”

“At this event, Dulux Professional from AkzoNobel wishes to share the knowledge and experience gained from over 20 years of trend analysis and color research. Introducing the theme color each year is also a way for us to revitalize urban areas and elevate living spaces. At the same time, with our mission to contribute to creating sustainable value and inspiring green living, Dulux Professional will continue to partner with businesses in their efforts to revitalize the market,” Ms. Lan added.

Here are some photos from the conference:

With the goal of accompanying and supporting the sustainable development journey of Vietnam's real estate and resort market, WeHub, Savills Hotels, and other leading industry partners will continue to organize the MTE 2024 Conference at the end of March next year in Ho Chi Minh City, with the main theme being Sustainable Development and Wellness. For more information and opportunities to participate in the program, please contact email: host@wehubyou.com.