Hotels open doors in Hanoi’s west

The increase in hotels dove-tails with the rapid development of the capital’s west

Richard Leech, executive director of CBRE Vietnam, said 2011 would see a range of five-star hotels put into operation in My Dinh area.

They include the Crowne Plaza West Hanoi, Grand Plaza Hanoi and the Keangnam Hanoi Landmark Tower, providing nealry 1,400 rooms to the market.

“Most of the hotels along Pham Hung road will face challenges in their first two or three years, before coming into a stable business duration,” Leech said in CBRE’s quarterly report presentation in Hanoi last week.

Following an influx of new projects in the outer districts, hotels are expected to move into more defined niches, in which business travellers would book accommodation in the west while leisure tourists would focus on Hoan Kiem district, CBRE stated.

“This movement may force existing hotels to upgrade their facilities and services to suit their clientele,” Leech said.

However, the operator of the latest arrival, the Crowne Plaza West Hanoi hotel, still believed in the prosperity of the new area.

Adam Riley, general manager of the Crowne Plaza West Hanoi, told VIR that the newly-developed area of My Dinh was a good location for high-end hotels.

“The CBD is downtown, but I think everyone knows that there is limited space there and that My Dinh is the emerging area of Hanoi, so it is a good idea to be here,” Riley said.

Located in an area that contains many newly-built public facilities such as a sports complex, the Hanoi Museum and the National Stadium, hotels in My Dinh will be great for travellers coming to Vietnam for MICE purposes, corporate business and tourism.

However, Leech said that unbranded hotels would face stronger competition, due to a lack of professionalism and global networks that could supply stable customers.

Crowne Plaza is currently operated by the famous InterContinental Hotels Group, which operates two other InterContiental hotels in Vietnam as well.

Coming out from downturns in business in 2008 and 2009, when the global crisis occurred, hoteliers in Hanoi rose up again in 2010.

At the end of 2010, the capital city was home to more than 6,600 hotel rooms from three- to five-star grades.

Thanks to the positive impacts of the 1,000 year anniversary in October and the global economic recovery, Hanoi welcomed more than 8.8 million tourist arrivals, up 11.5 per cent year-on-year.

The capital saw 24 per cent of the total number of international arrivals to the country, equivalent to 1.23 million visitors, and an increase of 20 per cent year-on-year.

Occupancy rates and revenue per available room (RevPAR), one of the standard industry measures of hotel utilisation and returns, across the board in the last quarter of 2010 continued to record growth over the same period of 2009.

The five-star submarket posted the largest increase in RevPAR, up 9 per cent year-on-year to $85.5 per room per night. The four-star submarket witnessed the highest rise in occupancy rates, up 10 per cent over the same period in 2009, with 64.55 per cent.

Average room rates in five-star hotels saw a slight year-on-year increase of just 1 per cent. The four- and three-star submarkets posted drops of approximately 10 per cent and 7 per cent, respectively.