"Re-energizing" the Vietnamese Real Estate and Resort industry

The conference, organized by WeHub, Savills Hotels, Dulux Professional, Vasta Stone & more than 30 leading industry players, provided a useful space for Investors, Hotel Owners, Hotel Operators, Design and Consulting Units to hone their professional knowledge, update market information & trends, and energize the market which has faced many challenges in recent times.

The hotel business in Southeast Asia is on the road to recovery as countries have fully opened up to international tourism, including the resumption of flights to China and the return of airlines. However, staff shortages, rising energy costs, geopolitical conflicts, high airfares and economic uncertainties continue to impact the resort market in the region.

In Vietnam, the recovery of the hotel business has been uneven. The occupancy rate and average room rate of 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 room occupancy.

In the first 9 months of 2023, the Asian tourist market is still 33% lower than pre-pandemic levels. South Korea is currently the largest international tourist market to Vietnam with 2.6 million arrivals, but the total number of visitors is still about 18% lower than in 2019. The Chinese market is gradually recovering, but only equivalent to 28% compared to the same period in 2019. The American and Australian tourist markets are about 7% lower than in the same period in 2019, reaching a total of 1.1 million visitors.

The oversupply situation at some destinations in the context of slow recovery of major international tourist markets such as China and Russia has increased pressure on the recovery process of the resort industry.

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

Some destinations such as Mui Ne, Nha Trang and Ha Long focus on developing the same segment. Specifically, more than 80% of the supply in these localities is in the mid-range segment (Midscale - Upper Midscale). This is a segment with high competition in terms of price level, not only from the hotel supply but also from the competition from resort apartment projects run by the owners themselves, for rent with flexible selling price 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 the creation of products that are not suitable for market conditions. The growth of the tourism industry, especially international demand before the pandemic, has promoted 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 gap between supply and demand in some destinations. In addition, we 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 do not meet the experience needs of tourists, especially when now, in addition to domestic destinations, Vietnamese tourists can travel abroad conveniently and easily. 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 discussed the potentials and challenges of the Vietnamese resort industry, the competitive advantages of the Vietnamese tourism industry as well as solutions to contribute to promoting the recovery process and sustainable market development.

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

At the conference, speakers from Dulux Professional, The Ascott Limited, Yotel and Tilleke & Gibbins shared emerging trends in the market including color trends, the potential of resort models for retirees in Vietnam, value creation from converting building functions as well as the impacts 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 Residence and luxury projects in Vietnam. At the same time, experts also shared their professional perspectives and discussed the application of culinary and experiential elements in the development of complex projects to increase attractiveness and meet market tastes.

The resort industry needs to adapt to changes in tourist consumption behavior after the pandemic. To increase competitiveness on the international map as well as retain potential domestic visitors, Vietnam needs to develop diverse products to meet the needs of many different customer groups and customer segments. Changes in demographics, with higher requirements in terms of experience, promote the tourism and resort industry to bring more special values ​​and emotions to customers, in which it is necessary to focus on integrating local cultural elements and community and natural characteristics into the project. This process requires coordination from local authorities, organizations and businesses in the industry for the resort tourism industry to develop sustainably and effectively.

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

Nguyen My Lan - General Director of AkzoNobel Vietnam Decorative Paints said: “The real estate and resort market is entering an important stage for recovery. This is the time when businesses and investors need to make great efforts to bring new experiences and products that meet the real needs of customers. As a leading enterprise in the field of paints and coatings, we understand the importance of color to customers' emotions”.

“At this event, Dulux Professional from AkzoNobel wants to share the knowledge and experience of more than 20 years of trend analysis and color research. Introducing colors as the theme color each year is also a way for us to add vitality to urban areas and enhance living spaces. At the same time, with the mission of contributing to creating sustainable values ​​and inspiring green living, Dulux Professional will continue to accompany businesses in their efforts to regenerate energy for the market,” Ms. Lan added.

Some pictures of the conference:

With the goal of accompanying and supporting the sustainable development journey of the Vietnam Real Estate & Resort market, WeHub, Savills Hotels and leading units will continue to organize the MTE 2024 Conference at the end of March next year in Ho Chi Minh City with the main theme of Sustainable Development and Wellness. For more information and opportunities to join the program, please contact email: host@wehubyou.com.