Many legal gaps and lack of incentive mechanisms "discourage" investors in tourism real estate.

ANTD.VN - At the seminar "Revising the Land Law: Creating Land for Tourism " organized by Investment Newspaper on October 19th, many experts pointed out that the draft law still lacks regulations encouraging the development of tourism real estate infrastructure, especially in the area of land access.

Numerous legal loopholes

According to statistics from the Vietnam Real Estate Association (VnREA), there are currently approximately 239 tourism and resort real estate projects nationwide. Of these, the estimated value of condotel projects is around VND 297,128 billion; villa projects are estimated at VND 243,990 billion; and shophouse projects at VND 154,245 billion. The total value of these three product types is approximately VND 681,886 billion, equivalent to USD 30 billion.

However, after a period of rapid growth, this segment has stagnated in recent years. The market is almost frozen, with negligible transaction volumes.

The main reasons for the sharp decline in this market, besides the impact of Covid-19, are the lack of a comprehensive development strategy for the tourism industry, especially the completion of mechanisms and legal frameworks for the efficient exploitation of land resources and infrastructure for tourism development in Vietnam, which poses a significant challenge.

According to a survey by the Vietnam Institute of Real Estate Research, among the factors hindering the speed, scale, and determination to participate in Vietnam's tourism and resort real estate market, economic and financial factors account for 30%, legal factors account for 50%, and other factors account for 20%.

The above data shows that legal loopholes in the tourism and resort real estate business sector have been causing concern among investors regarding legal safety and potential risks.

Conference scene

Economist Dr. Can Van Luc pointed out several shortcomings, such as: Preferential policies for the tourism industry have not been clearly specified in some related laws and regulations (Investment Law 2020, Law on Investment under the Public-Private Partnership (PPP) Method 2020...).

The legal framework for land allocation for tourism development projects still has many shortcomings, such as: Tourism businesses are currently not allowed to be allocated or leased land through land use right bidding (according to Decree No. 25/2020/ND-CP dated February 28, 2020 of the Government ).

The current draft of the amended Land Law stipulates 30 cases of land acquisition for socio-economic development in the national interest, but it does not include projects for tourism, recreation, and entertainment development.

Furthermore, regulations regarding the granting and transfer of ownership of land and assets attached to commercial and tourism-related land (condotels, shophouses, etc.) are still incomplete and inconsistent. The draft revised Land Law does not yet specify in detail the issuance of land use certificates for commercial and service land, including tourism land and types of tourism real estate formed on tourism land.

Over 100 tourism projects are currently stalled, awaiting resolution.

Sharing the same view, Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, said that currently Vietnam has more than 200 tourism real estate projects that have been implemented, creating nearly 100,000 condotel units, 3,000 villas, and 15,000 new hotel rooms.

To achieve our goal of becoming a tourism powerhouse by 2030, with 160 million domestic tourists and 50-70 million international tourists, we need approximately 500,000 accommodation rooms. Therefore, we have only achieved one-third of the required infrastructure, and the quality is still not high enough.

Therefore, Mr. Dinh argued that it is necessary to create favorable conditions for tourism real estate developers. “The Land Law does not mention tourism real estate developers by name; this group is absent from the Land Law, the Investment Law, and other regulations. If we don't promote this group, when will we ever achieve our goals…?” – Mr. Dinh questioned.

According to Mr. Dinh, there are currently more than 100 large-scale tourism projects that are "lying dormant," awaiting legal solutions. "If this situation continues, it will discourage tourism investment, discourage investors, and even local authorities wanting to promote investment will face difficulties," he said.

Regarding land acquisition, Master Nguyen Van Dinh - a real estate legal expert - believes that if land acquisition for tourism projects is not permitted as proposed in the draft amended Land Law, then investors will have to negotiate with the local people.

"If that's the case, we've excluded a group of foreign investors – and these are the big 'eagles' – because this group wasn't included in the agreement. We've kicked them out of the game, while we were hoping to have large tourist areas and theme parks," Mr. Dinh said.

Furthermore, Mr. Dinh also proposed a mechanism for land use fee exemptions and reductions for commercial and service land users. “Comparing this to industrial park real estate projects, businesses can be exempt from land rent for a number of years. This approach could be applied to tourism real estate, as these are also projects with the potential to spread and make significant contributions to the socio-economic development,” the expert suggested.

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