Servicing Hanoi’s fast-changing market place

Steven Loh

Consultants have said that the demand for the serviced apartment market, especially Grade C buildings, may be influenced by the increasing supply of private-owned small-scaled apartments for lease buildings, which offer more flexibility and softer rents. What do you think?

I say there is more competition in this area as can be seen currently. I feel that there is a niche for each serviced apartment type, be it is privately-owned or in whatever grade buildings and this is all depends on budget customers and the type of services customers like to be included. The type and proven record of the management of a building also plays a part in the competitiveness against a privately-owned apartment.

What do you think about the long-term competition of serviced apartment and hotel projects with a great number of hotel rooms to enter the market?

I honestly believe that there is neither long nor short-term competition as both serviced apartments and hotel rooms are two different products with different features catering to each individual’s accommodation needs. For example, if a customer is planning to stay for one week or prefers to have the space of a home, he or she may opt for serviced apartment but for those who traditionally are on a day business trip to the city, they may opt for hotels as space or the apartment features may not be important to them. I feel what is the main competition for the overall hospitality industry be it hotels or serviced apartments is the level of service standards.

As there are more inventories for hotel rooms, or serviced apartments entering the market, the overall service standards must be stepped up as well to commensurate the growth. There are not enough qualified and skilled workers to cater to the growth not only in hospitality but also those in the customer service industries such as banking and other corporations. It is important for Fraser Suites Hanoi, managed by Frasers Hospitality, a key global serviced apartment leader, to ensure that we invest in our assets such as our people, have continuous training to upgrade their skills and services to serve our customers better.

There will be large supply of serviced apartments coming online in the west of Hanoi, what can you say about this market?

There will always be competition be it from private villas to local or internationally-managed apartments. However, I believe there is room for everyone and the new inventories are definitely a welcoming sight as a benchmark for existing properties like us to further improve our services to maintain our number one position in the market. The customers will also have a wider options when selecting their long stay accommodation.

In general, what is you expectation of the serviced apartment segment in the time to come?

There are many serviced apartments as well as hotels that have opened up in this past year especially in the My Dinh area. This must be a good sign of increased demand due to increased of incoming expats and foreign direct investment.

The emerging market is also the affluent local and overseas returnee Vietnamese who now find the convenience of staying in serviced apartment more appealing. I am sure in time to come and given the economic and structural growth capacity of Hanoi as a capital, serviced apartment segment will grow in tandem.