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|The scenic coastline of the central region has given rise to booming tourism in the past year|
According to statistics from the central cities and provinces, the region has attracted an increasing number of tourist arrivals in 2017. Danang recorded six million tourist arrivals in the first ten months of 2017, while Quang Binh welcomed roughly three million. Nha Trang and Hue saw 4.5 and three million tourist arrivals, respectively, during the period. It is evident that the central region’s scenic coastline has contributed significantly to the development of the local tourism industry.
“The central region is home to long stretches of sandy beaches. This, coupled with urban development along the coast, gives the region an edge over other tourism destinations in Asia,” said Nguyen Duc Quynh, deputy director of Furama Resort Danang.
Quang Binh, known for its long coastline and rolling white sand dunes, has become a new destination for hospitality investors. FLC Group has poured VND13.8 trillion ($607.2 million) into a resort complex with a golf course, villas, and entertainment facilities in the central province.
In Thua Thien-Hue, Lang Co is planned to become a new urban area with modern hospitality services. Singapore’s Banyan Tree Group and Laguna Vietnam Co., Ltd. have recently requested permission to raise investment capital to $2 billion to expand the world-class integrated resort Laguna Lang Co in the province. Another notable project is Mediterraneo Resort by Vincoland, which has already finished the bare-shell construction of villas and hotels.
Not far from Lang Co, at Vinh Thanh and Vinh An communes of Phu Vang District, BRG Group is building a high-end resort complex with an investment capital of VND2 trillion ($88 million). PSH Group from Spain is also conducting research as well as completing investment procedures for Hue Amusement & Beach Park worth VND1.06 trillion ($46.64 million) in the coastal communes.
Quang Nam and Danang are the most popular areas buzzing with activity on the regional tourism map. The areas have a coastline connecting Son Tra in Danang and Dien Ngoc in Quang Nam running through the ancient town of Hoi An. The place has been a hotspot for hospitality investors in recent years. Several luxury resorts have appeared over the past two years, including Ariyana Beach Resort & Suite Danang, CocoBay Danang, Naman Retreat, The Nam Hai, Palm Garden Beach Resort & Spa, and Vinpearl Resort & Villas Hoi An.
In Binh Dinh, FLC has developed FLC Quy Nhon Beach & Golf Resort with the total investment of VND7 trillion ($308 million). This is the first large-scale project on an international level that has been completed and is fully operational at Phuong Mai-Nui Ba, a national tourist attraction. The pioneer project is expected to impact the province as well as woo an incredible number of tourists to Quy Nhon-Binh Dinh.
Along with Danang and Phu Quoc, Nha Trang in Khanh Hoa is one of the three hottest spots in the Vietnamese hospitality market. Numerous property giants have flocked to the city with large-scale projects worth millions of dollars. Nha Trang is now home to the largest number of hospitality projects in Vietnam. Some notable projects include Vinpearl Empire Condotel, Vinpearl Beachfront Condotel, Panorama Condotel, Ariyana Smart Condotel, Havana Nha Trang Plaza, Starcity Nha Trang, and Novotel Hotel.
|Capital inflows are not slowing down in Central Vietnam’s hospitality market|
Danang and Nha Trang have been in the spotlight of the regional hospitality market. According to real estate services firm Savills Vietnam, Danang saw large hotel supply in the first half of 2017. The total stock from the 86 three- to five-star hotels was approximately 9,400 rooms. As local tourism saw strong growth, five-star hotels continue to be the highest performers in the market. Over 1,300 four- to five-star rooms came online in the second half of 2017.
According to reports by CBRE Vietnam, there were 7,697 condotels, three golf courses, and 771 villas on sale in Danang in the third quarter of 2017.
Meanwhile, Nha Trang had 10,138 four- to five-star hotel rooms, 1,190 villas, and 10,913 condotels. CBRE Vietnam forecasts that this figure will increase to 36,715 rooms by 2020.
As the wave of capital inflows to the central hospitality market shows no signs of slowing down, concerns arise about a future oversupply, especially as many condotel projects are underway. However, industry insiders said that the hospitality segment is an attractive investment channel bolstered by strong local tourism and high average occupancy rates.
“The development of hospitality projects and large-scale entertainment complexes along the central coastline will bring several benefits,” Erik Billgren, general manager of Savills Vietnam in Danang, said, noting that the most noticeable projects are Hoiana and CocoBay situated between Danang and Hoi An.
According to Billgren, the resorts and relevant services that centre on the coastline of the region will help improve occupancy rates, catering, and other relevant services. “These projects will create employment and tax revenue, which is a good thing for socioeconomic development,” he said.
Duong Thuy Dung, senior director at CBRE Vietnam, said that the wave of investment in resort property was to meet visitors’ demands before and after the APEC Economic Leaders’ Week took place in Danang in 2017. With the expectation that property prices will increase after the major event, developers have ramped up development in the city, especially condotel projects, in anticipation of the trend.