Capital hoteliers are in a fix worse

 During 2012’s second quarter, the market under performed, mostly due to fall in Average Daily Rate (ADR), especially four-star hotels suffering ADR reductions more apparent, said Richard Leech, executive director of CBRE Vietnam.

“This situation might be similar for the next quarter and reversed in the last quarter of 2012 due to seasonal factors,” he said. Lai Van Thang, representative of Lake Side Hotel, the economic downturn had affected many hotels. Occupancy rates at this hotel reduced by 5 per cent, at only 65 per cent compared to the same period of last year.

According to a CBRE quarterly report, compared to the previous quarter and to the same period of last year, three-star hotels achieved the most positive growth in all indicators, with their ADR and occupancy standing at $36.9, up 4.5 per cent year-on-year or 6.2 per cent quarter-on-quarter and 55.4 per cent, up 2.3 per cent year-on-year and down 0.1 per cent quarter-on-quarter, respectively.

Entering the low season in May, five-star hotels saw slight decreases in ADR, with $104.7, down 6.8 year-on-year and down 1.9 per cent quarter-on-quarter. However, this segment saw a positive growth in occupancy, up 6.2 per cent year-on-year, at 60.6 per cent.

Also coming into low season is the four-star segment which, on the contrary, performed the worst with negative growth, especially in ADR, with $62.4, down 15.9 per cent year-on-year with a slight decrease in occupancy, 52.5 per cent, down 0.4 per cent year-on-year.

According to CBRE, as of June 2012, accumulated stock of the entire market in the capital is 8,483 rooms, representing a 4.2 per cent increase year-on-year. Over half of the supply in each hotel segment is located in Hoan Kiem and Ba Dinh downtown districts.

To the year-end, the market expects to see more than 580 additional rooms from 3-5 star hotels, including foreign brands InterContinental, Hilton Garden Inn and Candeo Hotels. In 2013 and 2014, the five-star, 450 room JW Marriot and 300 room Lotte Colaris Hanoi are scheduled to open which will bring more competition to the existing operation.

Dao Thanh Tung, business director of four-star Silk Path Hotel, said that his business was still positive in the first six months of this year. “Our occupancy rate has been exceeding the planned target by from 2 to 7 per cent and increased by 5 per cent compared to the same period of last year.

 “International arrivals to Vietnam are on the rise and this is big opportunity for our hotels and others as well,” Tung said.