Low number of international visitors, HCMC hotels 'not recovered'

The recovery of international visitors to Ho Chi Minh City is slower than the rest of the country, making it expected that the hotel market will not reach pre-pandemic levels until next year.

According to Savills Vietnam, as of June 2023, Ho Chi Minh City has 15,662 hotel rooms from 110 projects, up 3% over the same period last year. Of the 404 rooms temporarily closed since the Covid-19 pandemic, 45% of the rooms are being renovated and the remaining 55% of the supply has no information about the reopening date.

A report released by the company at the end of July showed that the room occupancy rate of hotels in the city reached 64% in the first 6 months of the year, equal to more than 92% compared to the first half of 2019.

A room in a hotel in Ho Chi Minh City. Photo: Wink Hotel Saigon Centre

In the first half of 2023, Ho Chi Minh City welcomed 18 million visitors, the locality with the largest number of visitors in the country, of which international visitors accounted for 11%, about 1.9 million visitors. This number of visitors recovered about 46% compared to 2019, lower than the national recovery rate of 66%.

This has led to a downward trend in hotel operations in the city. In the second quarter, occupancy reached 60%, down 8 percentage points compared to the first quarter. Room rates reached VND1.9 million/room/night, down 2% compared to the previous quarter.

"Vietnam's recovery in international arrivals is slower than other countries in the region," said Troy Griffiths, deputy general director of Savills Vietnam. He believes the market could fully recover from 2024 thanks to the gradual recovery of Asian visitors and domestic tourism demand.

However, a representative of Savills Vietnam said that room rates in the city are at a "stable recovery" compared to the pre-pandemic period. Room rates in Ho Chi Minh City are comparable to other cities in the region such as Kuala Lumpur (Malaysia), Bangkok (Thailand), Jakarta (Indonesia). However, the city's supply of 5-star hotels is still low.

The report also showed that the rate of overnight stays in Ho Chi Minh City reached about 19%, lower than other destinations.

According to experts from Savills Vietnam, the city mainly welcomes business travelers and is considered a transit point between provinces and cities. The spending level of this group of guests on accommodation services will be higher, reaching 1.5 million VND/guest/trip. This figure is the second highest in the country, after Hanoi . Ho Chi Minh City also has the highest accommodation revenue in Vietnam, reaching more than 5 trillion VND in the first 6 months of the year, up 25% year-on-year.

Commenting on the prospects of the hotel market in Ho Chi Minh City from now until the end of 2023, the company's experts said that the return of Chinese guests is an opportunity for the city's hotel market in particular and the country in general.

In the first 6 months of the year, this was the second largest international tourist market in the country. However, the number of visitors only reached 22% compared to the first half of 2019. Chinese visitors are expected to increase in the second half of 2023 because the third and fourth quarters are the peak seasons. Chinese outbound tourism is also expected to fully recover in 2024 - 2025.

Van Thanh

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