Hanoi hotel market: two market segments taking shape

There are two different segments taking shape in the Hanoi hotel market. Businessmen are choosing new hotels in the western area, while normal travelers choose the hotels in the central area.

Savills Vietnam, a real estate service provider, said that the demand for hotel rooms in Hanoi has increased considerably since the fourth quarter of 2010, and the demand is forecasted to continue rising in the first quarter of 2011, since the market has entered the high business season.

According to Do Thu Hang, a senior executive of Savills Vietnam, in the fourth quarter of 2010, Savills Vietnam recognized the ranking of four star Silk Path and five star Grand Plaza hotels. Meanwhile, though Crowne Plaza hotel with 400 rooms has already opened, the list of property of Savills in the last quarter did not include the hotel.

Hang said that the fourth quarter business results of hotels in Hanoi in 2010 was better than that of the previous quarter. The average turnover per hotel room increased by 30 percent over the previous quarter and increased by six percent in comparison with the same period of 2009.

The average turnover per hotel room of three star hotels saw the sharpest increase of 30 percent in comparison with the third quarter of 2010. Meanwhile, four star and five star hotels saw turnover increases of 28 and 25 percent, respectively.

According to Richard Leech, Managing Director of CBRE, also a real estate service provider, continuing the recovery trend, the capacity and revenue per available room (RevPAR) in all market segments in the fourth quarter of 2010 saw considerable growth rates.

The statistics released by Savills Vietnam show that there are bout 6400 hotel rooms on the market provided by 43 hotels, eleven 5-star hotels, eight 4-star hotels and twenty-four 3-star hotels. In the fourth quarter of 2010, hotel room capacities and the hotel room rates increased by 11 percent and 9 percent, respectively.

There are 40 hotel projects under implementation in Hanoi. Of these, 18 projects are expected to provide 5500 rooms to the market. Meanwhile, the number of hotel rooms to be provided by the other 22 projects remains unclear. The future projects are mostly located in Tu Liem, Ba Dinh and Hoan Kiem districts. In general, five star hotels are mostly located in Tu Liem district, while three star and four star hotels are located in districts in the inner city.

CBRE thinks that in 2011, the market will have nearly 1200 hotel rooms from five new hotels, including two ones in the central area, Oriental Pearl and Hotel De Opera Hanoi, which may join the market in the first quarter of the year. Besides, there will be three hotels in the west of the city, namely Crowne Plaza West Hanoi, Grand Plaza Hanoi and Keangnam Hanoi Landmark Tower.

2011 will mark an important milestone in the hotel market with more high grade hotels in the newly developed western area joining the market. As such, with the new wave of establishing new hotels in the west, there will be two clear market segments. Business-class travelers will choose the new hotels in the west, while regular travelers will choose the hotels in the central areas.

Mr Richard Leech believes that the move will force operational hotels to upgrade their material facilities and services in order to better serve different classes of clients.

According to the Vietnam National Administration of Tourism VNAT, in 2010, Vietnam received five foreign tourists and 28 million domestic tourists and had a total earning of 96 trillion dong. Meanwhile, according to CBRE, in 2010, Hanoi received 8.62 million tourists, an increase of 11.5 percent in comparison with 2009. These included 1.23 million foreign tourists, a 20 percent from 2009. – Dautu

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