18:38 (GMT +7) - Wednesday 20/09/2017

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Da Nang hotel market sees strong growth

Released at: 14:32, 17/08/2017

Da Nang hotel market sees strong growth

Photo: Viet Tuan

Number of new three to five-star hotel rooms rising at highest level for some years, according to CBRE.

by Linh San

Da Nang’s hotel market welcomed one five-star hotel and three four-star hotels in the first half of this year, offering more than 1,000 new rooms and bringing the total number of rooms in three to five-star hotels to 12,969. There will be an additional 3,800 rooms from 21 hotels by the end of this year, taking the total to over 16,800, up 40 per cent against 2016. This is the highest increase in supply in the 2014-2017 period (forecast), according to the latest report from CBRE.

Over the next two years, supply growth will range from 7 to 9 per cent per year. By 2019, the market is expected to have a total of 19,600 hotel rooms in the three to five-star segment.

“A number of four-star hotels have opened in recent years, especially new hotels along Vo Nguyen Giap Street, contributing to a new skyline in Da Nang,” said Ms. Dung Duong, Senior Director at CBRE Vietnam. “These hotels provide professional services and state-of-the-art facilities and amenities at an affordable price, targeted at domestic and international budget travelers. In the near future, the street will see more and more high-rise buildings and more diverse types of real estate.”

The hotel market recorded better performance in the second quarter of 2017 thanks to an increase in tourist arrivals. According to the Da Nang Department of Tourism, in the first half the central city welcomed about 3,230,336 tourists, of which 38 per cent were foreigners. International arrivals increased 36 per cent and domestic arrivals 11 per cent year-on-year.

Average rates in four to five-star hotels are $117.6 per night, up 3 per cent year-on-year, and average occupancy is 62 per cent, up 2 percentage points year-on-year. Of these, four-star hotels in the city led increases in average room revenue (37 per cent year-on-year) as new hotels began to stabilize their business. Four-star beachside hotels followed, with an 8.8 per cent annual increase in average room revenue.

 

Da Nang had 21 direct flights last year (including regular and charter flights), which increased to 26 in the first half of this year. The Da Nang - South Korea route has three more airlines operating, raising the total to eight. Direct flights between Da Nang and China, Hong Kong, Thailand, and Singapore also see growth. “The shift in visitor’s nationalities will have a positive impact on F&B services, leisure services, and the demand for real estate investment,” Ms. Dung said. “Accordingly, developers should also focus more on language factors to expand customer market share and anticipate the wave of investment.”

Da Nang International Airport is the third largest in the country, after Noi Bai in Hanoi and Ton Son Nhat in Ho Chi Minh City. A key opportunity for Da Nang lies in further improving flight connectivity. AirAsia Thailand began operating a Bangkok-Da Nang route in April and further growth in such flights to larger travel hubs with European connections are welcomed. “The expanded airport is part of Da Nang’s preparations to host the 2017 Asia Pacific Economic Conference (APEC) Summit in November,” a JLL report noted. “Hosting APEC will bring much focus to Vietnam’s stellar growth as one of Asia’s emerging economies, further promoting its MICE capabilities nationally.”

In 2017 and in the years to come, Da Nang will welcome more international hotel brands and become the leading city in Vietnam in the number of international hotels and resorts, including Hilton, Four Points by Sheraton, JW Marriott, and Wynham Soleil Da Nang, to name just a few.

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