Foreign investment continues to flow into hospitality market

March 15, 2021 | 11:17
The hospitality industry has struggled in the past year, but despite the challenges, foreign investors are still debuting new properties in Vietnam. VIR’s Hoang Anh sat down with Michael Piro, Indochina Capital’s COO and Wink Hotels’ CEO, to discuss the brand’s soon-to-open first property and why foreign investors are still bullish on Vietnam’s hospitality market.

Can you assess the potential of Vietnamese tourism in 2021 compared to neighbouring countries?

foreign investment continues to flow into hospitality market
Michael Piro, Indochina Capital’s COO and Wink Hotels’ CEO

Vietnam has been exceptional with its approach to COVID-19, which recently ranked second worldwide by Australian think tank Lowy Institute. Not only does this highlight the country’s competence on a global level, but it also allowed the domestic market to travel relatively unhindered, which puts us in a very good position compared to other countries for 2021.

Vietnam is among a few countries that recorded a positive GDP growth rate in 2020; additionally Hanoi-Ho Chi Minh City is the second-busiest flight route in the world and Vietnam is one of the world’s top destinations for foreign direct investment.

This means we can expect recovery and growth for the tourism sector, especially as the country starts to open its borders. The Vietnam Tourism Association has initiated plans to welcome travellers from international markets and we expect Vietnam to be a top destination given the importance of safety to travellers.

Are you concerned about debuting a new hotel amid the pandemic?

From an industry standpoint, there is a gap in the hospitality industry at the moment. Close to 80 per cent of the hotel supply is “unbranded,” meaning smaller hotels of under 100 rooms, managed independently mostly by locals. There is a chance to consolidate that demand with a branded product which follows international quality standards, that speaks to both local and foreign travellers.

From a social standpoint, nowhere in the world do I see a more dynamic, young-at-heart generation than Vietnam and Wink Hotels was created to cater to their fast-paced lifestyle while immersing them in each destination. Am I aware it will be challenging for us to reach a certain occupancy rate? Yes, but I would say I am excited and believe in our team and the market.

Ho Chi Minh City, Hanoi, and Danang are well-established on the Vietnamese tourist trail but do you intend to expand across the country and open up in secondary markets?

foreign investment continues to flow into hospitality market
Wink Hotel Saigon Center at 75 Nguyen Binh Khiem will open on March 24th 2021

Wink Hotels is part of the initial $1 billion investment commitment of Indochina Kajima, Indochina Capital’s joint venture with Kajima Corporation, into Vietnam. This month, we will open the brand’s first hotel, Wink Hotel Saigon Centre on Nguyen Binh Khiem of District 1. Hanoi and Danang will follow and then we will expand to secondary markets such as Can Tho, Haiphong, Vung Tau, and Tuy Hoa.

More than just a brand, we believe Wink will become a lifestyle that every stakeholder and guest will be a part of – we want to create a lasting community. We will bring our unique lifestyle movement to every city we operate in, creating a one-of-a-kind ecosystem and deliver on our promise of building a “community of one,” where every Wink stakeholder embodies and personifies the Wink way of work, travel, play, and life. We are confident this will create synergies that will boost our brand and performance.

What are the main challenges for a developer venturing into hospitality sector, especially amid COVID-19?

A recent survey of hotel operators revealed the challenges facing the hospitality industry at this time, which include the implementation of technology, environmental friendliness and sustainability, personalising the customer experience, and retaining quality human resources.

Coincidentally, our initial design and concept help us navigate through many of these challenges. Our hotels incorporate state-of-the art technology such as self-check in and check out, usage of the room key as a top-up card for services provided at the hotel, and vending machines on every floor, among other features.

Our past experience with luxury resorts also gave us the construction expertise and best practice to ensure sustainability: Wink Hotels is the first hotel property in Vietnam to receive LEED (Leadership in Energy and Environmental Design) Gold Certification version 4. Our guest experience is driven by Wink Guides, our front-of-house team, which was hired and trained in a manner not yet seen in Vietnam. The group is genuine and always available to help guests experience their destination to the fullest.

Collaboration is also key in overcoming these challenges. Operators need to work with local authorities and companies when it comes to human resources training and creative customer experience packages to encourage people to travel again.

What are the major lessons from your time developing branded residences with luxury hotel chains like Four Seasons and Six Senses?

The idea behind Wink Hotels came to us back in 2015 as we wanted to leverage our experience in building luxury developments and apply that learning to a new, affordable product. Wink will disrupt the market in a number of ways, because we have learned that a hotel should be about the convenience and comfort for our guests.

We have a Stay24 programme to guarantee a full 24-hour guest stay regardless of check-in time. Guests can come at their time of convenience to enjoy unlimited à-la-carte breakfast, a free pass to any Toong coworking space in the city (including their flagship site at 75 Nguyen Binh Khiem) and lifestyle and fitness workshops from our partners.

And at the end of the day, the rooms, though minimal and smaller in size, offer a powerful shower with high-quality shower products and a premium mattress and bed linens, designed only for Wink Hotels, that will guarantee a five-star hotel sleep experience.

Our membership programme will guarantee the best rates, and allow our members to accumulate points for every dollar spent at the hotel, as well as various promotions from our partners such as Grab and their rideshare services.

By Hoang Anh

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional

Latest News ⁄ Your Consultant ⁄ Indochina Capital