Race among high-end hoteliers heats up

Many high-end hotels are expected to be put into operation in 2015, according to Alternaty, a real estate consultancy firm.

The first group is led by Hyatt in terms of high room rate. The second group comprises Renaissance, Rex and Sofitel, and the third includes 4-5 star internationally standardized hotels.

The number of high-end hotels in HCM City has increased to 16, which provide 5,146 rooms. These include newly operational ones – Tan Son Nhat Saigon and Novotel which were put into operation in 2013, and Pullman Saigon Hotel which opened in 2014.

It is expected that two more high-end hotels, The Reverie (old name Times Square) and  Le Meridien, will open, and will provide 636 rooms.

After that, another two high-end hotels would also become operational. One of them is a 424-room hotel developed by Viettel, a military telecom group, and managed by a famous international brand.

Meanwhile, Union Square Hotel has been scheduled to be opened in 2016, which would diversify supply sources. The One and Lavenue will open by 2017 and 2018.

The expansion of Majestic Hotel and the upgrade of the Tax shopping center into Satra Tax Center, expected to be completed in four years, will also add to the room supply.

When asked why so many high-end hotels are expanding, while the national economy is still in recession, a real estate expert said all reports have predicted a surge in the number of foreign travelers to Vietnam.

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According to the Vietnam National Administration of Tourism (VNAT), the number of travelers to HCM City has increased to 4 million per annum, which represents stable 11.4% growth rate in 2009-2014. 

In 2014, HCM City received 4.1 million foreign travelers, a 7% increase over the year before, which accounts for 50% of total foreign travelers to Vietnam.

The analyst went on to say that the hotel market has seen signs of recovery since 2012.

Why high-end hotels? The analyst cited a report as saying that the high-end hotel segment led the market in 2013 and 2014 in terms of occupancy rate. 

The average occupancy rate of high-end hotels was reported to be up to 71% in 2014, while Sheraton and Intercontinental hotels reported the highest rate of 75%.

“In general, the expected returns of high-end hotels are very attractive,” he said.