Upscale hotels see room rates increase

Fusion Suites Da Nang. Photo courtesy of Fusion Group

The average room rent at upscale hotels – comprising both – increased by 1.6 per cent to US$93.3.

By region, the south reported an increase of 2.7 per cent and the north an increase of 1.7 per cent while the central region saw a marginal drop of 1 per cent.

As for occupancy rates, it increased by 0.5 per cent for five-star hotels but declined by 1 per cent for four-star hotels.

Overall, upscale hotel occupancy fell in the northern and central regions by 2.6 per cent and 1.4 per cent, respectively.

The southern region bucked the trend with its occupancy rate increasing by 1.7 per cent.

Revenue per Available Room (RevPAR) of five-star hotels increased significantly as the result of the rise in room rates.

However, there was a decrease of 3.6 per cent in the four-star segment.

By region, the south reported growth of 5.5 per cent while the northern and central regions saw declines of 0.5 per cent and 2.7 per cent.

FIT/leisure travellers, tour groups and corporate/business travellers continued to be the three biggest components accounting for 76 per cent of all guests last year.

The rate of MICE (meetings, incentives, conferences and exhibitions) travellers decreased from 7.6 per cent in 2017 to 6.8 per cent.

It was the third straight year of decline, indicating either lack of effort or inefficiency in the country’s attempts to attract MICE tourists.

After an increase in 2014-16 in the ratio of domestic guests staying at upscale hotels, it started shrinking and again fell last year.

Reservations through travel agencies and tour operators saw a sharp fall of 5.1 per cent last year while there was an increase in bookings online and on other channels.

New hotel supply

Hotel supply in HCM City increased for the first time in two years, with 488 new rooms in one new and four renovated projects added in the second quarter of the year, according to a Savills report.

It represented a 3 per cent quarter-on-quarter increase to more than 16,100 rooms.

Karim Klaa, acting general manager of New World Saigon Hotel, said the new supply has no impact on his hotel for the moment.

“New hotels are coming. If you don’t innovate, you lose the market.”

In the next three years, three five-star hotels would enter the market, Michael Robinson, general manager of Caravelle Saigon Hotel, said.

Many hotels in HCM City have started to innovate, including New World Saigon, Caravelle Saigon, and Sheraton Saigon, he said.

“A lot of hotels are looking forward to the future and upgrading.”

Kenneth Atkinson, founder and senior board advisor of Grant Thornton Vietnam, said the growth of Airbnb and other sharing websites represents significant competition.

Airbnb continued to grow in the country last year, with 185.4 per cent and 173.8 per cent increases in the number of key listings in Ha Noi and HCM City to 10,798 and 17,326 at the end of last year.

Their occupancy rate was 60– 65 per cent.

Last year, international tourist arrivals increased by 19.9 per cent 15.5 million, while the growth in number of domestic travellers dropped by half to 9.3 per cent.