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Savills Hotels to host "Meet the Experts" series in Hanoi & HCMC

Released at: 17:49, 29/06/2017

Savills Hotels to host "Meet the Experts" series in Hanoi & HCMC

Photo: Savills

Second event set for August following success of June event.

by Doanh Doanh

Savills Hotel will organize a new “Meet the Experts” series in Hanoi and Ho Chi Minh City in early August. The topic will be Limited Service Hotels, where Savills Hotels will give an overview of the sector and invite an operator to provide their unique insights on this exciting model.

This follows on from the success of its first “Meet the Experts” series with leading brand Hilton, where hospitality experts were invited to share their valuable insights with Vietnamese developers. The event was held in Ho Chi Minh City and Hanoi in June and had an encouraging turnout, with almost 100 senior industry attendees in total.

In the June event, Mr. Rudolf Hever, Director of Savills Hotels Asia Pacific, and Ms. Nhung Pham, Senior Manager, Business Development, Savills Hotels Asia Pacific, presented the “Vietnam Hospitality Market Overview and Opportunities”. Representatives from Hilton explained the involvement and support of an operator during the design process, the role of brand standards, and the technical and operational aspects of hotel planning and design.

According to Savills Hotels, Vietnam welcomed 10 million international tourist arrivals in 2016, up 26 per cent against 2015. There remains large potential for growth, however, as Vietnam lags behind its peers in terms of arrival numbers. Thailand welcomed 10 million international arrivals in 2001 and 32.5 million in 2016, while Malaysia welcomed 10 million in 2000 and 26.8 million in 2016.

On a longer-term growth basis, Vietnam is among the top of its peers, having achieved a 12.1 per cent compound annual growth rate (CAGR) from 2010 to 2016. Thailand recorded 12.7 per cent during the same period, while the Philippines saw 9.2 per cent and Indonesia 7.5 per cent.

Savills Hotels also highlighted certain risk factors on the horizon for Vietnam’s hospitality market. The country is still too dependent on a limited number of international source markets. In 2016, just two source markets accounted for 42 per cent of all international arrivals: China with 27 per cent and South Korea 15 per cent. Vietnam is simply not doing enough to diversify its sources of international arrivals and therefore remains exposed to the risk of global instability.

Meanwhile, supply and demand fundamentals in the second home markets in Nha Trang and Cam Ranh, Da Nang, and Phu Quoc Island are challenging. In these markets, if just considering confirmed future supply in the midscale to luxury segments, supply will increase by almost 30 per cent in each of the next three years in each of the three markets. Hence, a very challenging trading environment is expected in these markets over the coming years, despite the consistent international and domestic arrivals growth.

Most of this future supply has been successfully launched to the market but is still under construction and has not yet been tested in operational performance. On top of this, many developers have promised high guaranteed returns, which greatly increases the risk for both the developer and end-user / buyer. Therefore, developers are advised to exercise caution in the initial planning stage of developments and to fully take into consideration the risks of guaranteeing returns, hospitality market performance volatility, and future trends. In particular, developers need to carefully plan for the future management to ensure the financial performance is satisfactory once operations commence.

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