Vietnam Hotel and Tourism Report April 215 Hotels & Hospitality Group Hotel Intelligence Vietnam
Hanoi Ho Chi Minh City Da Nang Nha Trang Contents 3 Market Overview Market Summary 4 6 Cities 6 Ho Chi Minh City 7 Hanoi 8 Nha Trang 9 Da Nang Recent Key Transactions 1
Hotel Intelligence Vietnam 3 Market Overview Tourism Demand Supply Outlook International tourist arrivals to Vietnam numbered approximately 7.9 million during 214, a growth of 4.% year-on-year. The country has seen a CAGR (Compounded Annual Growth Rate) of 15.9% in international visitation between 29 and 214, however, growth has been eroding over the past three years. Ho Chi Minh City and Hanoi remain the most popular cities for tourists to visit with 4.4 million and 3. million foreign tourist arrivals in 214 respectively. Emerging resort markets have been gaining traction with foreign visitors to Nha Trang (.86 million) and Da Nang (.96 million) growing by 14.9% and 13.9% between 25 and 214 (CAGR) respectively. Branded new room supply is primarily concentrated in Ho Chi Minh City and Hanoi with an additional 3,729 keys expected to enter these two markets in the near future. Internationally branded supply in Nha Trang and Da Nang is limited but growing, with Dusit Thani and Hilton branded hotels expected to open shortly. The Vietnamese tourism industry is set to continue to grow for the foreseeable future as Vietnam continues to establish itself as a leading destination in Southeast Asia. Planned government investment in infrastructure will improve overall connectivity, while scheduled promotional campaigns by the tourism board should further enhance the country s exposure. NEW HOTELS (Top 5 major hotels that have opened recently) OTHER NEW HOTELS The Reverie Hotel, HCMC 257 rooms Hilton Garden Inn Hanoi 86 rooms 445 rooms 323 318 3 279 rooms rooms rooms rooms UPCOMING HOTELS Dusit Thani Nha Trang 439 rooms The InterContinental Hotel at Keangnam Hanoi 359 rooms Le Méridien Saigon HCMC 35 rooms Ibis Grand Place HCMC 338 rooms Hilton Da Nang 193 rooms JW Marriott Hotel Hanoi *318 rooms hotel and 258 rooms SA QUICK FACTS 7.9 million International Visitor Arrivals in 214 Novotel Da Nang Premier Han River (HCMC and Hanoi) 1,399 Number of New Rooms in 214 Lotte Centre Hanoi* Source: WTTC, Vietnam National Administration of Tourism (VNAT), JLL ADR Average daily rate, RevPAR - Revenue per available room Contribution of Tourism Industry to National GDP 4.6% % of total GDP in 213 (forecast to rise by 8.9% in 214) Starcity Airport Hotel, Ho Chi Minh City InterContinental Nha Trang
4 Vietnam Hotel and Tourism Report Market Summary Vietnam continues to emerge as a prominent destination for international travellers within Southeast Asia. With the presence of diverse tourism attractions, Vietnam appeals to a range of visitors. Foreign direct investment into Vietnam continues to grow, stimulating developments in infrastructure, enhancing domestic connectivity. The government continues to be a key driver of the tourism industry providing incentives for investors and promoting Vietnam as a destination overseas. Growth in tourism and visitation has spurred investment into the country especially in the hospitality, real estate and industrial sectors. Not only are the main economic centres Hanoi and Ho Chi Minh City (HCMC), gradually developing, many other coastal resort destinations such as Da Nang and Nha Trang have been developing due to improvement in tourism infrastructure and enhanced accessibility. International Visitor Arrivals to Vietnam Number of Visitors (million) Annual Growth (%) 9. CAGR (25 214) 9.5% 4 8. 7. 6. 3 2 5. 4. 3. 2. 1.. 1-1 -2-3 25 26 27 28 Visitor Arrivals (million) 29 21 211 212 213 Annual Growth (%) Source: Vietnam National Administration of Tourism (VNAT), JLL 214 International tourist arrivals to Vietnam grew by 4% year-on-year to approximately 7.9 million visitors during 214. International visitation grew by 15.9% per annum (CAGR) between 29 and 214, however, growth has been eroding over the past three years. Investments in marketing campaigns to promote Vietnam s tourism industry since 21 has increased interest from international tourists. According to recent information, international visitor arrivals to Vietnam have declined 14% during the first quarter of 215 compared to Q1 214. This decline has been caused by a simultaneous drop in the number of arrivals from Russia and China. While continuing territorial disputes between Vietnam and China is the likely reason affecting Chinese arrivals to the country, the devaluation of Russian Ruble has limited travel of Russians overseas. Each of the major tourist destinations in the country provides unique offerings for the discerning tourist as follows: Ho Chi Minh City Formally known as Saigon, Ho Chi Minh City is largest city in Vietnam and is the main commercial and cultural city of the country. It is located in the southern part of the country and houses a number of museums and war memorial sites. Among other tourist attractions, the city offers a French colonial architecture which adds to the cultural and historical significance and draws a number of tourists. As part of its initiative River Tourism Development Strategy of Ho Chi Minh City in the period of 213 to 215 and towards 22, the city plans to renovate and build 5 new docks, wharfs, waiting rooms by 215 and plans to also redevelop more than 65 tourist sites within the city s districts. As a result of growing lodging demand, a number of internationally branded hotels positioned across all star categories, entered the market over the past few years. The government is the key driver of the tourism industry providing incentives for investors and promoting Vietnam as a destination overseas. International tourist arrivals to Vietnam grew by 4% year-on-year to approximately 7.9 million visitors during 214.
Hotel Intelligence Vietnam 5 Hanoi Hanoi, the capital of Vietnam, is a city where old meets the new, where old sites are preserved in some areas while other areas are being developed. The city is located in the northern part of the country, close to Mainland China. Hanoi has become an increasingly attractive destination for international investors and visitors. The city benefits from long-standing historical and cultural traditions and a stable socio-political environment. As Vietnam s capital and the seat of government, Hanoi benefits from being a bureaucratic centre for foreign business and investment activity in Vietnam. In addition, the city s tourism department also organises events and provides a platform for Hanoi to promote both its tourism and business opportunities. An important infrastructural development in Hanoi is the completion of the second terminal and associated facilities at the Noi Bai International Airport, which officially opened on 4 th of January 215. Terminal 2 will see capacity increase to 25 million passengers by 22 and 5 million passengers by 23. Da Nang Da Nang is one of the preferred resort destinations along the long coastline of the country. The Da Nang tourism market extends from Da Nang to Hoi An in the adjoining Quang Nam province, some 3 km along China Beach south from Da Nang City, and also extends along the coastline north from Da Nang to Langco and on to Hue in the adjoining Thua Thien Hue province. The coastline features some scenic beaches, including China Beach, three UNESCO World Heritage Sites located within kilometres of Da Nang, namely the 16th century silk route trading port of Hoi An; My Son Valley which features the remains of the ancient Cham civilization, as well as the ancient imperial city of Hue. Nha Trang Nha Trang is a coastal city and the capital of Khanh Hoa Province. Khanh Hoa Province benefits from a coastline of approximately 2 kilometres, with more than 2 islands offshore. Nha Trang is located 1,278 kilometres south of Hanoi and 441 kilometres north of Ho Chi Minh City. Nha Trang is regarded as one of Vietnam s premier beach destinations. The Nha Trang area is known for its natural beauty comprising of a largely unspoilt coastline. Often called Vietnam s Mediterranean area, it is mainly popular for its beaches, and is a holiday destination for locals offering activities ranging from amusement parks, golf, mud baths and historic tracks such as the Po Ngar temple complex. The coral seabed near the city is popular for diving and snorkelling. Other industries contributing to the local economy are shipbuilding, fishing and lobster farming. Several industrial parks are located to the south of the city. With a number of academic institutions in the area, Nha Trang is also a centre for training and scientific research in Southern Central Vietnam. Outlook Vietnam has made considerable developmental strides over the past decade, thanks primarily to a multi-fold expansion in external trade following entry into the World Trade Organization (WTO) in 27. However, the unlocking of Vietnam's economic potential rests on reviving the reform drive. The tourism industry has considerably developed mostly in the last decade, with the number of international tourist arrivals increasing from 3.8 million visitors in 29 to 7.9 million visitors in 214. The implementation of economic integration to create a single market across ASEAN states, referred as the AEC 215 (ASEAN Economic Community 215) may prove to be a major contributor to Vietnam s overall economic development. In light of growing government investment in infrastructure across the nation in the form of construction (and expansion) of airports, highways and tourism promotional campaigns, the Vietnamese tourism industry is set to continue to grow for the foreseeable future. In addition, various industry players such as tour agencies, airlines and lodging establishments (both local and foreign) will increasingly play a major role in promoting the country. A continuing area of concern for the Vietnam tourism industry has been the inability to generate repeat business. Industry leaders have highlighted this as an issue that needs to be addressed in order to compete with regional rivals over the long term. ASEAN The implementation of the ASEAN Economic Community may prove to be a major contributor to Vietnam s overall economic development. Various industry players such as tour agencies, airlines and lodging establishments (both local and foreign) will play a major role in promoting the country.
6 Vietnam Hotel and Tourism Report Ho Chi Minh City Demand Ho Chi Minh City (HCMC), the largest city in Vietnam, is the country s commercial, tourist and cultural hub. Being an international gateway to the rest of the country, it welcomed 4.4 million foreign visitors during 214, up 7.1% over the previous year. Mainland China, Malaysia, Russia, Australia and Japan are the top source markets to Ho Chi Minh City. International Visitor Arrivals to Ho Chi Minh City Visitor Arrivals (million) Annual Growth (%) 5. 4.5 4. 8 3.5 6 3. 2.5 2. 1.5 1..5. Supply 21 22 23 Select Future Openings Hotel Rooms Opening Le Méridien Saigon 35 215 Ibis Grand Place 338 215 Ritz-Carlton Hotel 25 217 Total 938 Source: JLL Research 24 25 International Visitor Arrivals Source: VNAT / Press Release /JLL 26 27 28 29 Existing branded supply in Ho Chi Minh City comprises of 4,442 rooms across different segments. Recent new supply in HCMC include the 3 key Starcity Airport Hotel in 214 and the 257 room Reverie Hotel in February 215. Future supply includes 2,77 keys from seven hotels expected to enter the market in the near future. 21 Annual Growth (%) 211 212 213 214 4 2 2 Trading Performance Trading performance in 214 was down over the previous year, with RevPAR declining 5.2% relative to 213 to USD 77 driven by a simultaneous decline in occupancy from 67.6% to 66.4% and average room rates from USD 12 in 213 to USD 116 in 214. Figures for YTD February 215 indicate a decline in RevPAR performance of 3.1% y-o-y to USD 77 compared to the same period in 214, which is driven by both a fall in ADR from USD 118 to USD 114, and a marginal decline in occupancy from 67.8% to 67.7%. Trading Performance Ho Chi Minh City ADR/RevPAR (USD) Occupancy (%) 2 9 8 15 7 6 5 29 21 ADR (USD) 211 Source: STR Global / JLL Outlook 212 213 RevPAR (USD) 214 YTD Feb 214 Occupancy YTD Feb 215 5 4 3 2 With the development of new international routes from regional airports, more foreign tourists have been flying direct to resort destinations such as Da Nang instead of transiting through Ho Chi Minh City. With a continued growth in the number of international arrivals, we expect lodging demand levels to strengthen further over the short to medium term. However, fresh supply slated to enter the market should continue to put pressure on ADR in the near term. Territorial disputes between Vietnam and China may continue to affect Chinese visitor arrivals to Ho Chi Minh City (currently the top source market to Vietnam) in the short term. The News Key Recent Additions Starcity Airport Hotel, 3 keys; 1 The Reverie Hotel, 257 keys. 214 stats compared to 213 RevPAR declined 5.2% y-o-y to USD 77. Occupancy fell from 67.6% to 66.4%. ADR declined from USD 12 to USD 116.
Hotel Intelligence Vietnam 7 Hanoi Demand Hanoi is emerging as an increasingly attractive destination for international investors and visitors supported by long-standing historical and cultural traditions. International arrivals to Hanoi reached an all-time high of 3 million during 214, an increase of 16.3% from 213. Top source markets to Hanoi include Mainland China, Japan, South Korea and Singapore. International Visitor Arrivals to Hanoi Visitor Arrivals (million) Annual Growth (%) 3.5 3. 8 2.5 6 2. 4 1.5 2 1..5-2. -4 21 22 23 24 25 26 27 International Visitor Arrivals Source: VNAT / Press Release / JLL Supply 28 29 21 211 212 213 214 Annual Growth Existing supply in Hanoi comprises of 44,278 keys, with more than half being unrated. Some of the existing hotels are being upgraded, expanded and rebranded to remain competitive as new supply continues to enter the market. Future supply includes three hotels with a total inventory of 959 rooms expected to enter the market in the near future. Select Future Openings Hotel Rooms Opening The InterContinental Hotel at Keangnam 359 215 Novotel Ciputra Hanoi 3 217 Total 659 Source: JLL Research Trading Performance RevPAR increased by.8% year-on-year during 214 to USD 74, driven by an increase in occupancy to 68.%, while ADR declined marginally to USD 19. Figures for YTD February 215 show a similar trend, a 3.4% increase in RevPAR to USD 77 compared to USD 75 in 214, which is driven by an increase in occupancy from 66.1% to 71.9%, while ADR declined from USD 113 to USD 17. Trading Performance Hanoi ADR/RevPAR (USD) Occupancy (%) 2 9 15 8 7 6 5 29 21 ADR (USD) 211 Source: STR Global / JLL Outlook 212 213 RevPAR (USD) 214 YTD Feb 214 Occupancy YTD Feb 215 5 4 3 2 Growing number of domestic flights from Hanoi is benefiting the overall tourism industry as visitors are encouraged to travel to multiple destinations throughout Vietnam. With a recent decline in the number of Chinese visitors to Hanoi, the tourism authorities are planning focused promotion campaigns in other markets including Japan, South Korea, Malaysia, Singapore, Russia and other East European countries in the near future. The political friction between Vietnam and China may continue to affect Chinese visitor arrivals to Hanoi (currently the top source market to Vietnam) in the short run. The completion of the second terminal at the Noi Bai International Airport will help facilitate international arrivals to Hanoi as it will see capacity increase to 25 million passengers by 22 and 5 million passengers by 23. The News Key Recent Additions Hilton Garden Inn Hanoi, 86 keys JW Marriott Hotel Hanoi, 445 keys Lotte Centre Hanoi, 318-key hotel and 258-key Serviced Apartment Re-brandings Hanoi Horison Hotel rebranded as Pullman Hanoi, 25 keys 1 214 stats compared to 213 RevPAR increased by.8% y-o-y to USD 74. Occupancy grew from 66.4% to 68.%. ADR declined marginally to USD 19.
8 Vietnam Hotel and Tourism Report Nha Trang Demand The total number of visitors to Nha Trang via Khanh Hoa Province has increased significantly over the period from 25 to 214 at an annual rate of 14.9% (CAGR). International visitor arrivals reached approximately 856, in 214, representing a year-on-year increase of 18.2%. International Visitor Arrivals to Nha Trang Visitor Arrivals (') Annual Growth (%) 9 % 8 7 8% 6 6% 5 4 4% 3 2% 2 % -2% No. of Visitors (') Source: Tourism Department of Khanh Hoa, JLL 25 26 27 28 29 21 211 212 213 214 Annual Growth (%) Key source markets to Nha Trang include Japan, South Korea, Russia and USA. Nha Trang Bay has been voted as one of the top 29 most beautiful bays in the world by Travel + Leisure magazine for two years in a row. This has helped bring the destination under international spotlight. Supply The existing supply in Nha Trang is largely dominated by independent and family-run hotels targeting domestic and cost-conscious travellers. These independent and family run hotels are largely located on Biet Thu and Nguyen Thien Thuat Streets, while independent midscale hotels are located along Tran Phu Boulevard and its sub-streets. Internationally branded supply in Nha Trang is limited but growing. Key players in the market include InterContinental, Best Western, Sheraton, Novotel and Evason (a brand of Six Senses Hotels Resorts Spas). Select Future Openings Hotel Rooms Opening Dusit Thani 439 216 Eastin Duyen Ha Resort 45 217 Total 889 Source: JLL Research Outlook With an improvement in tourism infrastructure, the Nha Trang tourism market has seen substantial growth over the past few years with increasing number of domestic as well as international tourist arrivals. Factors such as the addition of internationally branded resorts, improving domestic as well as international connectivity and the launch of focused tourism promotion campaigns bode well for the outlook of the Nha Trang tourism market. The News Key Recent Additions InterContinental Nha Trang, 279 keys Best Western Premier Havana Nha Trang, 68 keys International visitor arrivals reached approximately 856, in 214, which represents a year-on-year increase of 18.2%. The existing supply in Nha Trang is largely dominated by independent and family-run hotels targeting domestic and cost-conscious travelers.
Hotel Intelligence Vietnam 9 Da Nang Demand International visitation to Da Nang has shown a steady increase since 29 growing at a rate of 25% per annum (CAGR) between 29 and 214 to.96 million. The availability of a variety of accommodation options ranging from locally managed resorts and villas to internationally branded hotels as well as the increase in direct international flight routes have led to an increase in inbound visitation. The opening of the Crowne International Club in 29, the only casino today with a licence to operate live gaming tables in Da Nang, has also contributed to the increase in visitor arrivals since 21, particularly from Mainland China, Da Nang s second largest source market. Top source markets to Da Nang include Thailand, Mainland China, USA, Japan and Australia. International Visitor Arrivals to Da Nang Number of Visitors (million) Annual Growth (%) 1.2 1..8.6.4.2. Visitor Arrivals (million) Source: Da Nang Tourism Board, JLL 25 26 27 28 29 21 211 212 213 214 Annual Growth (%) 8 6 4 2-2 -4 Supply According to the Da Nang Tourism Department, supply comprises a total of 426 hotels with 15,465 rooms as of September 214 (latest available statistics). The Majority of existing hotels are one-star to two-star properties (83.3%), not considered as being of international standard, and only 16.7% of hotels are categorised as three-star to five-star, most of which are of international standard. International operators with a presence in the market include Accor, Hyatt and IHG. Select Future Openings Hotel Rooms Opening Hilton 193 Q1 216 Four Points by Sheraton 39 217 Total 583 Source: JLL Research Outlook In the short to medium term, with an improved airport infrastructure, launch of additional direct international flights and with the entry of additional international branded hotels in Da Nang, we anticipate visitor arrivals to continue to grow at a healthy pace in line with growth observed over the past few years. The regional markets including Thailand and Mainland China, continue to be key international source markets in the Central Vietnam region. However, territorial dispute with China and a sluggish Thailand economy is likely to continue to negatively affect tourism arrivals in the short term. The News Key Recent Additions Hotel Premier Village Da Nang Resort (Managed by Accor), 111 keys Novotel Da Nang Premier Han River, 323 keys International visitor arrivals reached approximately 96, in 214, which represented a y-o-y increase of 28.6%. The Majority of existing hotels are one-star to twostar properties (83.3%), and only 16.7% of hotels are categorised as three-star to five-star.
1 Vietnam Hotel and Tourism Report Recent Key Transactions Property Name Location Year Rooms Price (USD) Price per room (USD) Six Senses Con Dao 214 5 Confidential Confidential The Nam Hai Resort & Spa Hoi An 214 Confidential Confidential Movenpick Saigon (5% stake) Ho Chi Minh City 214 268 32 million* 119,44* Sheraton Nha Trang (5% stake) Nha Trang 213 28 42 million* 15,* Life Heritage Resort (rebranded as Anantara) Hoi An 213 96 9.6 million, Life Wellness Resort (rebranded as Avani) Quy Nhon 213 63 6.4 million 11,587 Source: JLL *Price reflects % interest Hanoi Da Nang Vietnam Key Destinations Nha Trang Ho Chi Minh City
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