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Much promise still for hospitality market

Released at: 10:52, 27/09/2018

Much promise still for hospitality market

Photo from agoda.com

Mr. Robert Mclntosh, Executive Director, CBRE Hotels APAC, tells VET about the potential of Vietnam hospitality market.

by Ngoc Lan

What are your thoughts on Vietnam’s hospitality market in recent times?

Supply was not as great as last year in the first eight months of 2018 but projects still selling have good absorption rates. The supply of products such as condotels and resorts has grown Mr. Robert Mclntosh, Excutive Director, CBRE Hotels APAC (Photo: Ngoc Lan)significantly in recent times, while demand in the tourism market has also increased significantly. The number of international visitors to Vietnam has grown impressively, so if Vietnam continues to make improvements in infrastructure, connectivity and tourism, the hospitality market can continue to grow.

Many domestic investors and developers have cooperated with professional foreign operators. What are the advantages of this cooperation for Vietnam’s hospitality sector?

The cooperation with professional operators brings many advantages. First, these are global units, so have visitors from around the globe, from many different channels, bringing large supply for hotels. Second, these units are likely to negotiate better with online travel agents (OTAs) thanks to their large scale. Hotels therefore have more benefits than cooperating with small units.

What impact do OTAs have on Vietnam’s hospitality sector?

OTAs play an important role in the development of Vietnam’s hospitality market. They are increasingly expanding their business model and attracting more tourists. They also offer a variety of options, making it easy for tourists to select suitable accommodation. Many, however, are now asking for higher commissions from hotels, at up to 30 per cent. If OTAs and hotels can balance this issue, there is potential to develop Vietnam’s hospitality market in particular and the tourism sector in general.

The home-sharing model is seeing strong development in Vietnam. How do you view its impact on the hospitality market?

Home-sharing meets demand in the sharing economy model. People who have a home but only use it for a short time can earn additional income. In developed markets like the US, we have conducted many studies on this issue and found that home-sharing will not affect hotels and actually makes destinations more attractive. Hotels can exploit this.

However, there are also disadvantages. Owners do not pay taxes because there is no specific law relating to this issue. This is unfair for hotel owners because they are subject to taxes.

Besides, for example, I live in an apartment, and if I see a lot of tourists home-sharing in my building I would feel unsafe.

What is your advice on developing Vietnam’s hospitality market?

Both developers and individual investors need to consider their needs. Developers can make a profit from hotel projects, while individual investors can benefit from the commitment of the project owner. On the other hand, tourists arriving at destinations vary, so supply in the time to come should be more diversified to satisfy the needs of all customer segments.

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