Hotel developers bet on niche markets

Adwin Chong, general director of Crowne Plaza Danang, has announced that Silver Shores Investment and Development is going to kick off the second phase of the Crowne Plaza Danang project. This would be a 600 room hotel, a villa area and shopping mall.

Silver Shores is the owner of Crowne Plaza Danang, the biggest hotel in the central region with 535 rooms. When the second phase of the project gets completed, there would be a hotel complex with 1,100 rooms. In the eyes of analysts, this would lead to the oversupply of hotel rooms in Danang, where hotel developers all complained that they have been struggling hard to exist.

Nevertheless, the investor and manager of Crowne Plaza Danang believe that starting the second phase of the project to expand its business scale is a reasonable move.

The investor has its every reason to make such a decision. If Crowne Plaza Danang targets the tourists from Asia, Europe or Australia, it would have to compete fiercely from other big guys such as Hyatt Regency, Furama and Vinpearl.

However, Adwin Chong said right from the very beginning, the investor decided that the hotel would focus on Chinese guests, a niche market that the other hotels in the central region have not paid high attention.

The existence of a small scaled casino at the hotel has helped attract Chinese travelers, who are very fond of gambling. However, Chinese not only like gambling, but they also like having sea bath, visiting natural heritages and playing golf.

In order to attract Chinese travelers, Silver Shores has been making every effort to popularise the central region’s images in the Chinese market. It has also been joining forces with Vietnam Airlines to provide 9 flights a week from China to Danang,

The professional tourism promotion has helped the hotel do business well with the high occupancy rate. The neighbouring hotels like Sandy Beach Resort also can benefits from the sharp increase in the number of Chinese tourists.

Having realised the great potentials from the market, Ben Thanh Non Nuoc Company, the owner of Sandy Beach Resort has decided to make heavy investment to upgrade and expand the resort.

According to Vatthanachai Phipatthongpant, general director of Sandy Beach Resort, the hotel now has 118 rooms, but the figure would be 198 by 2014 after the upgrading process. The investor is also considering building a new hotel to increase the total number of rooms to 398 by 2016.

The senior executive said the investor would not try to jump into the 5-star hotel market, where there is a stiff competition among the big guys already, but would focus on the 4-star market segment. A project on a conference center on the area of 750 square metres is also being considered, which would allow the investor to attract the MICE (meeting, incentives, conference, exhibition) market.

Louk Lennearts, a senior executive of Serenity Holding, said if looking at the number of hotel rooms available, one would say that the Danang market is witnessing the oversupply. However, one can see that the short supply still occurs in some market segments.

The 3-4 star hotels located in the coastal areas are still lacking in Danang, which means that big opportunities are still awaiting investors. Serenity Holding itself is targeting the market segment, planning to develop the accommodation projects under the brands of A La Carte, M2 Boutique and Fusion Suites.