Danang desperate for hotel investors

Prospective hotel investors are touring Danang, but few deals have been clinched.

The Furama resort is the only foreign five-star accommodation in operation in the area and the country’s third biggest city is set to lose another foreign hotel project despite developers receiving investment two years ago.
Australian-bankrolled Riverview Majestic was given the greenlight to build a $27.6 million hotel project in the city’s downtown area in 2002. The design included 230 rooms, a business centre, restaurants, a night club and a beauty salon in the 14-story hotel.
But authorities are now considering revoking the Riverview’s licence since there has been no progress since last October. The investor said it was still committed to the project and was negotiating with contractors to build and operate the hotel.
“The project’s implementation is much slower than the investor’s commitment,” a report from Danang Investment and Promotion Centre states, which also suggested the project be shelved.
Another foreign hotel project, on Bach Dang street by the Han River, where the Riverview hotel site is, was previously let out to a foreign company to build a four-star hotel but the project has also ground to a halt since losing its licence in 2002.
The site was formerly the home of the US consulate, burned down after the US officials withdrew from Danang in 1975 and now it is a car park.
Danang, which welcomed around 75,000 foreign visitors in the first five months of this year, has managed to attract only one foreign hotel developer, the US Magnum Investment Group, since the American BBI Group quit its $248 million resort project in Non Nuoc beach in 1997.
Magnum is now clearing the site to build a $24 million Vegas Beach Club & Resort near the majestic Marble Mountains, home to important historical sites and a stone carving village.
A number of other foreign companies have explored opportunities to build hotels in Danang city centre and along the coast but no projects have materialised so far.
A Malaysian company last year expressed interest in a $30 million resort next to the Furama and another $15 million up in the mountain village of Ba Na.
However, they have not returned since the local authorities asked them to submit an investment application.
The Furama group also made noises about doubling the number of rooms at the resort and building a golf course but, as yet, nothing has happened.
Danang is the logical tourist distribution hub for central Vietnam as it has the only international airport in the region.
However, Thai Airways quit the service from Bangkok to Danang two years ago and it was replaced by a smaller airline, PB Airways, while Hong Kong-based CR Airways has stepped in to revive Danang-Hong Kong flights after Pacific Airlines stopped the service mid July.
Now the local tourism industry is depending on new hotel and resort projects set up by Vietnamese developers to revive the area.
Five local companies are clearing sites to build resorts in nearby Son Tra peninsula, while Hanoi-based Quang Dai joint stock company is eyeing a $250 million near Hai Van Pass. Ben Thanh-Non Nuoc joint venture is completing a $7 million resort in Non Nuoc beach, 10 kilometres from the city centre.
Lam Quang Minh, director of the Danang Investment Promotion Centre, said he expected a strong flow of investment into the local tourism industry owing to plans laid out for the beach area stretching from Non Nuoc to neighbouring Quang Nam province, drawn up by the WATG company.
Meanwhile, Minh said the Korean-backed Lafien company, the owner of a $3.2 million car filter producing factory in Danang, is applying to build a $9 million golf course in Hoa Vang district.