Tourists on a beach in Nha Trang, which has been heavily affected by the drop in the number of Chinese tourists. (Photo: VNA) Globally, the hotel industry started 2023 off strong, with morethan 60% of properties reaching 2019 revenue per available room (RevPAR)levels.
RevPAR growth was still predominantly driven by growth of roomrates, with only a handful of countries exceeding 2019 occupancy.
In Southeast Asia, Singapore reached the highest RevPAR last yearand this strength has continued in early 2023.
This was mainly due to stronger demand from business and leisuretravel, especially pent-up demand for luxury accommodation from overseasvisitors.
Following China’s border reopening in early 2023, many countriesare gearing up for the return of Chinese travellers.
In 2019, approximately 32 million Chinese travellers visitedSoutheast Asia, and the return of these guests will aid recovery in the regionsignificantly.
“Vietnam experienced remarkable growth in the past ten years with internationaltravellers increasing by 16.9% per year between 2009 and 2019," said MauroGasparotti, Director of Savills Hotels APAC.
“High demand boosted confidence in the sector, with a strongdevelopment pipeline. On average, about 10,000 rooms entered each year between2017 and 2019,” Mauro said. “This strong growth was interrupted by thepandemic, and it will take time to recreate the necessary momentum to reachpre-pandemic levels. Given the strong pipeline, even pre-pandemic, Vietnamneeded 20% to 30% growth in annual demand to keep pace with new openings.”
In the first two months of this year, the country welcomed 1.8million international travellers, which is 40% lower than the pre-pandemiclevel. There were 560,000 Korean travellers and 148,000 from the US.
The domestic market continued to dominate with 20 milliontravellers.
The lack of the Chinese market imposes further challenges on therecovery of tourism.
In 2019, almost a third of Vietnam’s 18 million foreign arrivalscame from China and they dominated coastal destinations such as Nha Trang,where 70% of international travellers were Chinese.
The domestic and Korean markets supported the recovery of certainareas such as Da Nang, with some beachfront properties able to exceed 50%occupancy.
However, other destinations such as Nha Trang have beenheavily affected by the drop in Chinese tourists and the significant number ofopenings in the past few years.
According to Savills Hotels statistics, Nha Trang provides 24,000mid to luxury rooms, half of which entered the market between 2017 and 2019.
This destination may require greater joint efforts from businessowners and local authorities to reposition its tourist image and catchinternational attention and demand.
“The resumption of Chinese tour groups from March 15 is good news,however, we shouldn’t forget that excessive reliance on a single market isrisky due to the notorious volatility of hospitality,” Gasparotti said.
Certain cities have experienced significant recovery, particularlyHCM City, where occupancy is fast reaching 2019 levels.
Uyen Nguyen, head of consultancy at Savills Hotels APAC, said,“though occupancy is improving, average daily rates are between 15% and 20%lower than pre-pandemic levels."
“But it is worth noting that in certain cases, luxury and boutiquehotels that were well-positioned have reached or even surpassed 2019 rates,”Uyen said.
Last year, drive-by destinations showed robust performance afterthe lifting of the national lockdown, but there has been a slight decreasesince the beginning of this year. The reopening of borders has spurreddemand for outbound travel.
Despite intensifying competition, development prospectsremain available for those who can effectively respond to market dynamics.
The market requires innovative products that can cater to thedemands of both young domestic and international travellers, such asposhtels, entertainment-integrated complexes, limited-service accommodations,and co-living and co-working spaces.
Major cities and coastal destinations have promising prospects forultra-luxury products, with branded residence offerings.
“There is a growing trend for wellness-related offerings thatshould be explored because this trend can manifest in various forms, from yogaand meditation retreats to senior living residences, medical tourism complexes,or nature-immersed resorts located in areas close to major cities,” Uyen said.
“The market anticipates a shift towards quality, with a heightenedemphasis on details that can contribute to the success and character of resortoperations,” she said./.
VNA
