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Vietnam’s Hospitality and Real Estate market embraces challenges to navigate uncertainty

Meet The Experts Openning
2023 Meet The Experts Conference in Hanoi. Source: WeHub

Meet The Experts’ pivotal conference, themed “Market Re-energizing,” fosters industry collaboration and forward momentum in hospitality.

The Meet The Experts conference with the theme “Market Re-energizing” successfully took place on 1 November 2023, attracting more than 30 speakers and over 700 professionals from the Real Estate and Hospitality industry. The conference, organized by WeHub, Savills Hotels, Dulux Professional, Vasta Stone and more than 30 partners, provided a valuable platform for investors, hotel owners, management companies, design firms, and consulting companies to enhance their professional knowledge, update market information and trends, while injecting fresh energy into a market that has faced numerous challenges in recent times.

Hotel occupancy rates in Southeast Asia have trended upward since the reopening of all major markets, particularly with the resumption of routes to China and the increased capacity of airlines. Challenges like a competitive labour market, rising energy costs, geopolitical tensions, expensive travel, and economic uncertainty continue to impact hospitality demand.

Vietnam is challenged by a surplus of available rooms and the slow return of key markets such as China and Russia.

Between 2013 and 2023, Nha Trang, Phu Quoc, Da Nang, Ha Long, and Hoi An-Quang Nam had a 54% share of the new room supply. Beach destinations have grown by 16% per annum over the past decade, significantly higher than the 6% annual growth in Ho Chi Minh City and Ha Noi.

Several destinations welcomed significant properties in a single category. In Mui Ne, Nha Trang, and Ha Long, more than 80% of properties fall into the midscale – upper midscale segment, which often engages aggressive pricing. These properties face competition from second-home products, which offer flexible room pricing strategies to capture market share.

Mauro Gasparotti, Director, Savills Hotels.

Mauro Gasparotti, Director, Savills Hotels.

Mr Mauro Gasparotti, Director of Savills Hotels and host of Meet The Experts commented, “Excessive development is not the sole issue; rather, the issue lies in the creation of inappropriate products. Rapid tourism growth before the pandemic drove a surge in hospitality properties. However, some developers hastily entered without proper planning, leading to properties that lack identity and contribute to oversupply issues in certain areas. Although there are some well-built properties with the right positioning, there are many that prioritise quantity over quality. Modern guests prioritise experiences more than ever before, and travellers, including locals, now have numerous options to explore.”

At the MTE conference, senior representatives from Accor Hotels Group,, VinHMS, Sovico Hospitality Group, Hoiana Resort & Golf and Wyndham Hotels & Resorts discussed challenges and their solutions, Vietnam’s potential, and how the country’s hospitality segment can thrive in the long run.

Demand has not fully recovered. Asian source markets are 33% below 2019 levels; Korea led the market with 2.6 million arrivals – 18% lower than 9M/2019. China only reached 28% of its 9M/2019 arrivals. In contrast, the American and Oceania markets are recovering with 1.1 million arrivals, just 7% below 2019 figures.

In Vietnam, hotel performance recovery is fragmented. In HCMC, occupancy and ADR have fast approached 2019 levels. However, properties in leisure markets like Nha Trang – Cam Ranh, Da Nang, and Phu Quoc are struggling to improve occupancies.

Experts at MTE acknowledge the continued headwinds but are optimistic about the momentum and the forecasts for upward performance toward the latter part of 2023. The recent visa updates will also support performance into 2024. Hospitality experts believe the sector will navigate stability, despite potential difficulties ahead.

Speakers from Dulux Professional, The Ascott Limited, Yotel and Tilleke & Gibbins discussed colour trends, the potential of senior living models in Vietnam, value creation from repurposing spaces and how the 2023 draft land law will impact real estate.

2023 Meet The Experts Conference in Hanoi. Source: WeHub

2023 Meet The Experts Conference in Hanoi. Source: WeHub

Industry experts and senior professionals from Savills Vietnam, Lodgis Hospitality, Nobu Hospitality, Shangri-La Group, Radisson Hotel Group, TCC Land International (Thailand), and Indochina Capital explored branded residences and ultra-luxury dynamics and the strategies for embracing culinary and experiential elements in future mixed-use developments.

See It First Masterclass – a part of 2023 Meet The Experts Conference in Hanoi. Source: WeHub

See It First Masterclass – a part of 2023 Meet The Experts Conference in Hanoi. Source: WeHub

The industry should adapt to changing tourist preferences to succeed. Vietnam must diversify its appeal, catering to different age groups and customer segments. Modern guests seek unique experiences, and developers should integrate local culture and natural features to meet growing demand. Different actors must collaborate for success to be achieved, including private sectors and specialised organisations.

Nguyen Thu Thao, Chief Marcom Officer of Vasta Stone shared, “At Vasta Stone, we believe in the power of spaces to create lasting moments in our lives. Vietnam’s unique blend of tradition and cutting-edge technology innovation to create the “Proudly made in Vietnam sintered stone”, makes it the perfect backdrop for developments in hospitality and real estate. We are proud to be part of this transformation, crafting sustainable, innovative, and meaningful spaces.”

The hospitality and real estate market is entering a crucial recovery phase. This time is when businesses and investors need to exert significant efforts to introduce new experiences and products that align with the actual needs of customers. As a leading global paints and coatings company, we understand the paramount importance of colors in influencing customer emotions. At this event, Dulux Professional from AkzoNobel aims to share knowledge and expertise garnered over more than 20 year-journey in transforming global trends into colour with ColourFutures. Introducing the Colors of the Year is also a way to add vitality to urban areas and enhance living spaces. Furthermore, with the mission of contributing to creating sustainable value and inspiring green living, Dulux Professional will continue to accompany businesses in the hospitality and real estate industries to rejuvenate the energy for the market,” said Nguyen My Lan, General Director of AkzoNobel Vietnam.

MTE events keep industry professionals connected, informed and competitive. Those in the real estate and hospitality industry should keep up to date with WeHub Vietnam and Savills Hotels to access future events. The upcoming MTE featuring “Embracing Regenerative Real Estate” will take place in HCMC late March 2024.

Asia-Pacific Editor - TravelDailyNews Asia-Pacific | + Articles

Darin is monitoring the Asia-Pacific travel & hospitality market and reports the most important news of the region. Her role includes interviewing C-level executives as well as running the content campaigns of companies and NTOs
She holds a MAMBM from the University of Westminster in UK and a photography certificate from the Kensington and Chelsea College in UK.