Running out of money after COVID-19, a series of old Hanoi hotels are being put up for sale, priced at over 1 billion VND/m2

For example, a 13-storey, 323 m2 4-star hotel located right on Hang Bong Street is currently for sale at 500 billion VND, equivalent to 1.55 billion VND/m2.

Or another hotel also located on Hang Bong street with an area of 350 m2, 14 floors, priced at 520 billion VND, equivalent to 1.49 billion VND/m2.

A hotel located on Luong Ngoc Quyen street, 338 m2, 10 floors is also for sale at 530 billion VND, equivalent to 1.57 billion VND.

Located on Ma May Street, a 4-star hotel with an area of 327.9 m2, 10 floors, and an 8m frontage is for sale for 520 billion VND, equivalent to 1.59 billion VND.

Many hotels in Hanoi's Old Quarter are for sale. (Illustration photo)

The owner of a hotel for sale on Hang Buom Street said that his hotel has 14 rooms. Before the COVID-19 pandemic, the monthly revenue was about 400 - 500 million VND, but since the pandemic, business has become difficult, the hotel has been left empty for a long time, while the monthly cost to maintain is extremely high.

" The hotel has started to have guests again and is profitable, but because the financial pressure from the pandemic has not been resolved for several years, I had to sell it to pay off debt, " he said.

According to many real estate experts, after more than two years of being affected by the COVID-19 pandemic, many hotel owners have encountered cash flow difficulties.

Entering 2023, business and resort activities will also recover slowly as tourists tend to save on spending, which increases pressure on maintaining hotel operations, especially for small and medium-sized investors.

Mr. Nguyen Viet Cuong, an employee at a hotel in Hanoi's Old Quarter, said that the current room occupancy rate at his hotel is only 40-50%, and on weekends it is about 60% of the total number of rooms. The reason is that the number of tourists has not yet recovered compared to the pre-pandemic period. In addition, economic difficulties have caused tourists to tighten their spending, reducing their demand for travel.

According to data from the General Statistics Office, hotel room occupancy rates have increased but are still far below pre-pandemic levels. For hotels of 3 stars or higher, occupancy rates reached 49% in the fourth quarter of 2022. In the entire year of 2022, occupancy rates for the entire Hanoi hotel market reached 39%, with an average room rate of only VND2.2 million.

According to statistics from the Hanoi People's Committee, in May 2023 alone, the capital city of Hanoi welcomed more than 2 million visitors, an increase of 6.4% over the same period in 2022. However, the number of visitors in the month decreased by 8% compared to the previous month, with estimated revenue reaching 7,260 billion VND.

Hanoi has 3,756 accommodation establishments with 70,218 rooms. Of these, 603 hotels have been rated from 1 to 5 stars. However, the average room occupancy rate of 1-5 star hotels is estimated to only reach about 60%, although it has increased sharply by 32.6% compared to the same period in 2022.

Ms. Do Thu Hang, Senior Director of Research and Consulting at Savills Hanoi, said that the demand for domestic and international tourism is still not enough to increase the capacity to 100% at current hotels. Hotel owners need to have a reasonable operating strategy to gradually increase capacity, renovate hotels in stages, and make effective use of this time.

According to Mr. Matthew Powell - Director of Savills Hanoi, the hotels being sold and transferred are mostly private investors, these are the first subjects to fall into crisis during and after the COVID-19 pandemic due to limited tourism and pressure on interest rates.

In addition, this product segment also faces competition from high-quality products from professional domestic and international developers and operators.

Giving advice to investors on whether to buy a hotel for sale at this time or not, Ms. Uyen Nguyen, head of consulting, Savills Hotels Asia - Pacific, noted that buyers need to pay attention to the ability to operate the hotel business because this is a factor that affects future income and profitability. Buyers need to know the operating unit, the project's brand, the leasing cooperation structure, the provided amenities, these are all basic factors that need to be researched before deciding to invest.

Ngoc Vy

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