Vietnam cities garner heightened interest of hospitality investors

That’s according to the latest H1 Hotel Investment Highlights Asia Pacific report from JLL, which seems to indicate that the unfavourable image of Vietnam is slowly changing for the better.

Approximately 10 million international travellers arrived in Vietnam in 2016, a 26% increase from 2015. Chinese arrivals led the growth, up 51% along with a substantive rise in business travellers from the Republic of Korea.

China remained the largest source market for Vietnam for 2016, with 51% year-on-year growth, followed by the ROK (39% year-on-year) and Japan (10% year-on-year), reported JLL.

In 2016, Vietnam showed signs of shedding its image as a destination that tourists only visit once in alifetime— with the food scene, golf and casinos offering just a fewgood reasons for repeat visits from neighbouring countries like China.

The sizable investments made in infrastructure and transport in the country over recent years appear to be opening a portfolio of coastal destinations beyond just the long-standing traditional hotspots,said Adam Bury, senior vice president, investment sales, Asia Pacific, Hotels & Hospitality Group at JLL.

With the recent rebranding of Hoi An’s The Nam Hai, now under Four Seasons management, and a second Four Seasons in the preliminary stages of development in Hanoi, many large hotel operators are taking a serious look at getting a piece of the growing market in Vietnam.

Frank Sorgiovanni, head of research, Asia Pacific at JLL Hotels and Hospitality Group, said that JLL had seen an increasing number of internationally branded hotels open in Vietnam over the past two years.

He noted that JLL fully expected further diversification of hotel management companies and brands in the market over the foreseeable near term.Investorscontinued to seek alternative investment in Vietnam where arrivals’ growth is strongly supported by Chinese tourism.

We have been and continue to be particularly bullish about the growing tourism and thriving economy of Vietnam, which has seen foreign investors from across the region attracted to its hotel and resort market over the past 18 months, he added.

The country has become one of the most talked-about markets in Asia Pacific.

Stephen Wyatt, country head at JLL Vietnam was on target pointing out that much of the increased inbound travel figures were driven by business travellers and not international tourists as had been widelyreported in the Vietnamese press.

Mr Wyatt noted specifically that the hospitality industry in Vietnam benefited tremendously from increased business travel in the capital city of Hanoi and the southern metropolis of Ho Chi Minh City.

We observed, said Mr Wyatt, a considerable enhancement of corporate and business demand within hotels across Hanoi and HCM City as multinational manufacturers such as Samsung and LG Electronics entered Vietnam and relocated staff from other Asian markets on a temporary or semi-permanent basis.

Hotel performance, particularly in Hanoi, improved off the back of the massive industrial investment that surrounded the city, he concluded. We’ve seeing a similar trend in Ho Chi Minh City, which has also benefited from its position as a financial hub of the country.