Hospitality gears up for a rebound

08:00 | 17/06/2020
With zero community transmissions of coronavirus for almost two months, Vietnam’s approach may well become a benchmark for recovery with almost 80 per cent of hotels and resorts in Vietnam reopening recently and more expected to resume operations imminently.
1496p 30 hospitality gears up for a rebound
Locations from Phu Quoc to Cat Ba islands are already working to attract tourists

In the latest e-forum themed on the reopening of the Vietnamese hospitality market, held by Savills Hotels with VIR as the media partner last week, industrial experts gave analyses of the tourism and holiday market in the aftermath of COVID-19.

According to Mauro Gasparotti, director of Savills Hotels Asia-Pacific, the decision to reopen a large number of properties was a remarkably bold move by Vietnamese owners and it has given a strong sign of confidence to the hospitality market.

“We can also see from the way many companies have contributed to the success of the e-forum an impressively strong collaboration and willingness to work together towards a recovery,” Gasparotti said.

Drive-by destinations such as Vung Tau, Dalat, Phan Thiet, Can Tho, and Halong have experienced a good recovery as all lockdowns have been lifted. Meanwhile holiday destinations more likely to be reached via air have not seen much demand. Hanoi and Ho Chi Minh City’s performance has been increasing, but slowly.

“Over the weekends, there is much more demand for driving markets than fly-by markets due to recovery of domestic markets. Drive-by markets are preferable mainly because of closer distances. We will see this trend until international flights are restarted,” Gasparotti added.

The pandemic has widely impacted hotels worldwide. It was a tough time for many countries in the ASEAN region, with most hotel occupancies falling below as much as 25 per cent.

Hotels across Asia remain closed due to various government restrictions. The market is now pinning hopes on a comeback this month as some markets have been reopened such as Vietnam and Malaysia. In a recent survey by Savills Vietnam on the business situation following the reopening of the hospitality market, hotels and resorts reopened almost everywhere nationwide with specific containment measures.

The survey, involving 635 hotels and resorts of 4- and 5-star standard, found that 78 per cent or 493 properties reopened, most with full room inventories and facilities and a few limited facilities to better manage costs. Some 22 per cent of respondents also indicated they would remain closed until the international market recovers.

The majority of Ho Chi Minh City and Hanoi properties wanted to retain key personnel and avoid losing market share in the event of an early rebound while those in the main coastal destinations were a little more prudent with lower reopening rates such as 58 per cent in Phu Quoc and 55 per cent in Quang Nam.

Overall, business will be slow in the upcoming months even if average occupancies increased to around 16 per cent during the first few weeks of May, showing initial signs of rebounding.

However, that increase was mainly driven by drive-to destinations such as Ho Tram Long Hai, Dalat, and Vung Tau, which in certain cases reached full occupancy during weekends with travellers still trying to avoid airports.

Upscale and luxury city hotels that were heavily reliant on international and corporate demand still maintain single digit occupancies, with some running as low as 5 per cent. Meanwhile, a range of brand new hotels opened recently, as soon as the COVID-19 crisis eased in Vietnam.

The Shilla Hotels & Resorts, a representative of South Korea, recently launched its first property in the country with a brand-new lifestyle resort – Shilla Monogram Quangnam Danang. Its unique architecture, services, and wide-ranging facilities promise to be a new tourism symbol for both Danang and Quang Nam. Boasting 309 rooms, including one luxurious beachfront Monogram Villa, this grand resort brings a distinctively sophisticated lifestyle and leisure experience to anyone travelling to Vietnam’s Central Coast.

Elsewhere, viewing Lan Ha Bay and the ecologically diverse Cat Ba National Park, Hôtel Perle d’Orient Cat Ba - MGallery is the 34th member from famous international operator Accor in Vietnam.

Also on Cat Ba Island in the north, a new cable car link over the sea with the world’s highest track rope began operation. The cable car system traverses nearly 4,000 metres of sea and connects Dong Bai commune on Cat Hai Island to Phu Long commune on Cat Ba Island. Invested by giant second-home developer Sun Group, this system expects to boost tourism on Cat Ba with 60 cars capable of carrying 30 passengers each.

In Haiphong, the largest port city in northern Vietnam, Japanese chain Okura Nikko Hotels is ready to launch Hotel Nikko Haiphong. The hotel presents 250 rooms and suites designed under the brand’s principles of simplicity and elegance, offering guests a truly comfortable stay with the wonderful view of the peaceful Lach Tray River.

Meanwhile, other properties with long-term guests are able to maintain higher occupancies. The anticipated local demand, although representing 83 per cent of total tourists last year, is a much more price-sensitive cohort than international leisure and corporate guests.

Their accommodation needs are typically captured by budget and midscale properties and have little impact on 4- and 5-star city hotel performance. However, the local leisure demand may be captured by upscale resorts if the right promotions are there, according to Savills Hotels.

By Ngoc Anh

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