Vietnam’s hospitality and real estate market poised for new growth cycle

At the annual Meet The Experts (MTE) 2024 conference, co-hosted by Savills Hotels and WeHub on October 24 in Hanoi, Savills Hotels director Mauro Gasparotti shared insights on the current state of Vietnam’s hospitality and real estate sectors, as well as future projections for these vital markets.

Vietnam’s hospitality and real estate market poised for new growth cycle

“Vietnam has been gradually asserting itself as one of the favourite destinations for Asian travellers, especially from the South Korean market. Tourism and accommodation products in Vietnam are becoming increasingly diverse, with new hotel brands emerging across various segments to meet the needs of different customer groups. Among these, the luxury resort segment has shown the most positive business performance,” Gasparotti noted.

Vietnam’s tourism sector is witnessing a strong comeback, driven by increased interest from international markets, particularly South Korea. In the first three quarters of 2024, around 3.4 million South Korean tourists visited Vietnam, marking an on-year increase of 30 per cent and a rise of 7 per cent compared to the same period in 2019.

South Korea has become Vietnam’s largest international market, accounting for 27 per cent of total arrivals, surpassing China.

Popular destinations such as Nha Trang, Cam Ranh, and Danang are experiencing a notable influx of South Korean visitors, who make up 56 per cent and 40 per cent of international arrivals, respectively. Additionally, India has seen a significant increase in its market share, rising from 1 per cent in 2019 to 3 per cent in 2024.

Given these developments, Gasparotti believes that Vietnam’s hospitality and real estate market is preparing for a new growth cycle. “The luxury resort segment, in particular, continues to perform well. While the second-home market had been affected by recent fluctuations, it is now showing signs of recovery, with some projects reporting positive interest and absorption rates,” he said.

Additionally, there is a growing trend of travel agencies leasing hotels to operate lodging businesses, driven by the recovery of international tourism from Asia and Europe. This creates an impetus for travel companies and agencies to enhance their business ecosystem.

For the outlook of 2025, Vietnam aims to draw in 25 million international visitors next year. This target is bolstered by the momentum gained in 2024, during which approximately 12.7 million international tourists arrived in the country in the first nine months.

“To achieve this objective and create opportunities for the recovery of the resort real estate sector, relevant agencies and businesses in the industry need to coordinate effectively, including airport operators, airlines, hotels, travel companies, travel agencies, and other service providers,” Gasparotti emphasised.

Also at MTE 2024, Steven Wolstenholme, president and CEO of Hoiana Resort & Golf, highlighted that hotels can offer services in Korean and Chinese, provide signature dishes, and create entertainment amenities aligned with their cultures.

“Moreover, with the rise of affluent international travellers, particularly from countries like South Korea, China, and Singapore, there is growing demand for luxury and high-end accommodations. This trend encourages investors to focus on developing premium hotels and resorts with world-class services and facilities,” Wolstenholme said.

Discussing the upcoming growth strategies of Hoiana, Wolstenholme revealed that the first phase of the Hoiana project has been completed. It has received approval to proceed with the second phase, including luxury beachfront and golf villas, and a complex for conferences, sports, and shopping.

“In the upcoming phases, we will focus heavily on the event tourism market. We see great potential in attracting both international and domestic business tourism to Central Vietnam,” Wolstenholme stated. “In the near future, Vietnam could become an attractive destination for retirees, especially with the introduction of retirement visas. We aim to be ready to welcome these international customers.”

Hoiana is also targeting high-end, long-term visitors. Furthermore, Wolstenholme expressed hope for more favourable mechanisms to attract travel agencies and other customer groups, such as digital nomads, who seek extended stays.

“This group has significant potential to contribute to the sustainable growth of the local economy through higher spending and deeper community engagement,” he said.

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