Vietnam's resort real estate sector struggles to rebound

Topping the profit rankings is Flamingo Holding Group, which reported a post-tax profit of more than VND176 billion ($7 million), a sevenfold increase compared to the same period last year. The company is the developer behind several high-end resort projects, including Flamingo Dai Lai (Vinh Phuc), Flamingo Cat Ba (Haiphong), and Flamingo Hai Tien (Thanh Hoa).

KN Cam Ranh followed with a post-tax profit of over VND80 billion ($3.2 million), marking 23 per cent on-year growth. The company, a subsidiary of Long Thanh Golf Investment JSC and part of KN Investment Group owned by Le Van Kiem, is the developer of the KN Paradise resort complex in Cam Ranh of the central province of Khanh Hoa, with a total investment exceeding VND46.3 trillion ($1.85 billion), which also includes a casino operation.

However, not all firms fared as well. BIM Land, a member of BIM Group, reported a significant loss of more than VND341 billion ($13.64 million), a reverse from the over VND810 billion ($32.4 million) profit from the same period last year. The company is behind several projects, including InterContinental Residences Halong Bay and Park Hyatt Phu Quoc Residences.

Similarly, Phu Quoc Tourism Development and Investment JSC, the developer of Corona Resort & Casino in Phu Quoc, posted a loss of VND306 billion ($12.24 million), compared to a profit of nearly VND832 billion ($33.28 million) last year. The company also operates several major resorts and attractions on Phu Quoc Island, including Vinpearl Safari and VinOasis.

Hung Thinh Quy Nhon Entertainment Services JSC reported a post-tax loss of over VND199 billion ($7.96 million) for the first half of 2024, a sharp increase from the VND35 billion ($1.4 million) loss in the same period last year. The company is developing the 695-hectare MerryLand Quy Nhon project, with phase one investments of up to VND57 trillion ($2.28 billion).

Crystal Bay JSC also continued to report losses, with a post-tax loss of nearly VND 76 billion ($3.04 million). The company is heavily invested in multiple resort projects in central Vietnam, including Ninh Chu Sailing Bay and SunBay Park Hotel & Resort in Phan Rang.

Van Huong Tourism and Investment JSC, a subsidiary of Geleximco Group, posted a loss of more than VND34 billion ($1.36 million). The company is known for its Dragon Hill International Resort project in Do Son, Haiphong, which has an estimated investment of over VND30 trillion ($1.2 billion).

Tonkin Land JSC, the developer of Le Méridien Danang, also continues to report losses. The company is working with Marriott International on the development of the Le Méridien Resort & Spa Danang, which has a total investment of VND2.6 trillion ($104 million).

While Vietnam’s real estate market has moved past its most challenging period, a strong recovery remains elusive. According to a recent report by DKRA, liquidity in the resort real estate sector is still weak, with slow transaction volumes and limited price growth as investor confidence remains low and the recovery in this segment lags.

The Vietnam Association of Realtors (VARS) noted some improvement in the tourism and resort real estate market in the second quarter compared to the first, but the overall rebound has been muted. Despite an increase in supply and transaction volumes, there is still a long way to go.

In the first half of 2024, the market saw 3,114 new products launched, more than twice the figure from the same period last year, but still only 27 per cent of 2022 levels. The absorption rate for new supply reached 58 per cent, with 1,799 transactions, though 87 per cent of the new supply and 94 per cent of the transactions came from a single condotel project in Nha Trang.

VARS experts have previously projected that the resort real estate segment will only see a notable turnaround if the tourism industry delivers strong results. While supply is expected to improve, growth will be modest, with new offerings increasing by only around 20 per cent compared to 2023, mostly concentrated in large-scale tourism apartment projects.

In this environment, investment demand is expected to recover slowly, with transactions remaining subdued and still far from pre-pandemic levels. VARS forecasts a modest 30 per cent increase in resort real estate transactions compared to 2023.