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The recovery of the hotel industry has already begun in some countries, including Vietnam
The ongoing COVID-19 pandemic has had a lasting impact on the global society and economy and the hotel industry is among the hardest hit with many hotels unable to maintain profitable operations and have closed their doors. But behind every challenge are new opportunities. However, it may take years for tourism to recover to the pre-pandemic level, but it certainly will. By then, investors with the most in-depth understanding of the market will be well-equipped to take advantage of the new competitive landscape, according to Grant Thorton's Hotel Survey 2020.
The report says that Vietnam's hotel industry in 2019 saw little change in terms of trends and patterns in comparison to 2018. Average room rate for upscale hotels in Vietnam increased by 1.9 per cent while occupancy rate and revenue per available room decreased by 4.3 and 3.4 per cent.
It is worth noting that Asia continue to be the biggest market while the number of domestic guests grew slowly. South Korea is replacing China as Vietnam’s biggest source of guests. However, the proportion of domestic guests visiting upscale hotels has been increasing over the years, reaching 22.2 per cent in 2019.
Furthermore, while the proportion of free independent travellers and leisure travelers were similar across both star rankings, 4-star hotels served a much higher percentage of tour guests in 2019, at 30.5 per cent compared to 18.3 per cent of 5-stars properties. 5-star hotels, on the other hand, served more business and conference guests. Normally, 5-star hotels would have a higher portion of free independent travellers than 4-stars. However, as fewer 5-star hotels have joined the survey this year, many of which are city hotels, so data did not reflect this characteristic.
The survey also pointed out that in 2019, hoteliers remain wary about some of Vietnam’s issues regarding hotel and tourism development. Poor infrastructure, increasing competition and hotels’ operating costs are the top concerns by hotels. While partcipants are less worried about the impact of environmental problems, 21.9 per cent of them consider it to be highly impactful.
While the slow down in the growth of arrivals is seen as less risky, this suvey was carried out during June 2020 when the pandemic situation was more positive.