Good times ahead for VN hotel industry

 A report by real estate consultancy CBRE tabled at "Hotel Investment & Management in Viet Nam – Lessons from Across Asia" also said there is greater interest in investing in the country’s hotel sector partly due to the improving outlook of the Vietnamese economy.

Genuine buyers are becoming apparent, especially with investor interest in looking for quality hotels growing in Southeast Asia, it said.

Buyers are propelled to look for investment opportunities outside of Hong Kong, Singapore, and Tokyo as prices continue to rise in these countries and investors try to identify good and attractive yields.

International tourism has been growing in Viet Nam, albeit at slowing rates, over the last three years. In the first five months of 2014 it has skyrocketed to over 26 per cent.

One of the reasons for the interest in Viet Nam could be attributed to Thailand’s political turmoil as tourists shift their gaze to other Southeast Asia countries.

Hotel occupancy rates across Viet Nam have generally been strengthening over the last three years. Occupancy rates in HCM City and Ha Noi are now inching closer to that of cities such as Jakarta and Kuala Lumpur. While there is an increase in hotel supply predicted for both Ha Noi and HCM City over the next three years – around 8 per cent in total – this is less than the number of projects proposed for Kuala Lumpur and Jakarta, where supply may grow by 20 per cent and 40 per cent respectively if all the proposed projects proceed.

Resort destination Da Nang has performed particularly well over the last few years but its exposure to the China market may present challenges in the very short term.

Robert McIntosh, executive director, CBRE Hotels, Asia Pacific, said: "The longer term outlook appears positive at present.

"The quality of the infrastructure and hotels has improved considerably over the last few years and this has led, and will continue to lead, to a more stable and resilient tourism market.

"Hotel performance is expected to improve in the medium term and foreign investors are increasingly attracted to the opportunities and returns Viet Nam offers."

The conference moves to Ha Noi today and hotel operators, lawyers, financiers, and consultants will continue to discuss the climate of investment in Viet Nam.