High-end hotels in HCMC generate large profits

Several high-end hotels in HCM City reached high room occupancy this week. Rex Hotel Saigon, a five-star hotel, on November 7 announced it could not receive additional guests as it was full, with a room booking rate of 100.4%. The rate was 95% this week.

A number of hotels far from the central city, such as Windsor Plaza in District 5, have also had strong performance, with room occupancy of nearly 80%.

The high room occupancy results from crowds of international tourists pouring into the city in November.

However, during this year’s winter peak season, room capacity and prices were higher than those of the same period last year. In addition, two five-star hotels, Caravelle Saigon and New World Saigon Hotel, are undergoing repairs, lowering the supply of rooms.

The CEOs of major HCMC-based hotels noted that their business operations this year are better than they were last year. Some hotels have reached 52% in returns on sales, above their target of 50%. Regarding foreign-invested high-end hotels, their returns on sales amounted to an estimated 20%-30% because of high costs, but the number of guests was not low.

Typically, salaries paid to department heads at international hotels are up to VND80 million per month, while only VND20 million is paid to employees in the same position at domestic hotels.

Despite the upturn in sales and room occupancy, some general directors of hotels voiced their concerns over emerging difficulties in the hotel industry, with convention and food segments failing to attract customers.

“As many enterprises have cut spending on meetings and events this year, the hotel has been forced to enhance the number of guests to fulfill its target to maintain sales above those of 2017,” Phan Thanh Long, general director of Rex Hotel, remarked, adding that the hotel was estimated to generate VND520 billion in revenue, up VND20 billion against last year.

According to the HCMC Department of Tourism, the number of international tourists arriving in the city totaled 6.1 million in the January-October period, up 20.2% year-on-year.

The revenue from the tourism sector, including the travel, hotel and restaurant segments, amounted to an estimated VND112.6 trillion over the 10-month period this year, rising by over 20% year-on-year. The city is expected to welcome some 7.5 million international tourists this year.