Increasing demand for hotels, resort real estate faces great opportunities

According to Colliers, the tourism industry in the first quarter of this year, led by leisure tourism, is experiencing a strong global recovery in both international and domestic travel services. The tourism industry is expected to continue recovering in 2023, with continued growth in hotel demand. The report notes that in Vietnam, resort real estate shows great potential as the country capitalizes on the post-pandemic growth in tourism and leisure demand from both domestic and international visitors.

Bất động sản nghỉ dưỡng tại Việt Nam có tiềm năng lớn khi du lịch phục hồi - Ảnh 1. — Resort real estate in Vietnam has potential.

Mr. Morgan Ulaganathan, Head of Asset Services and Hospitality Advisory, Colliers (Vietnam) said that market participants have made bold moves since the peak of the Covid-19 pandemic. Interest rates are on the rise, but will eventually stabilize. Funds have been raising capital to invest in hotel assets at favorable valuations, before hotel revenue fully recovers.

For example, KKR raised $4.3 billion at the height of the Covid pandemic. Bain also acquired individual hotels or systems, with or without brands. Warburg Pincus continued to invest in Vietnam through the Lodgis platform...

However, Colliers representatives stated that the market still faces obstacles related to laws and regulations, which, if resolved in the near future, could lead to a more vibrant development of the tourism and resort real estate segment. Vietnam recorded a positive recovery in domestic tourism last year with 101.3 million domestic visitors, exceeding pre-pandemic levels. In 2023, the country aims to welcome 110 million visitors, including approximately 102 million domestic and 8 million international tourists. Furthermore, the middle class is growing in the country, with about 70% of the population expected to join the consumer class by 2030 (according to McKinsey).

"The foundations for Vietnam's resort tourism development are very positive, and the demand for capital deployment is very high. The clock is ticking. It's time to start preparing for a busy season of deals this year," added Mr. Morgan.

Colliers predicts that the tourism industry will continue to recover in 2023, with hotel demand across the region continuing to increase. Any decline in demand from the West at the beginning of the year, if any, will be offset by the return of Chinese tourists in the second half of the year. In markets that have reopened and have a balance between supply and demand, revenue per available room is expected to increase by approximately 6% year-on-year due to improved occupancy rates.

For markets with supply-demand imbalances, the figure is around 4% year-on-year, also driven largely by improved occupancy. Singapore, Bangkok, Bali and Ho Chi Minh City are expected to lead the recovery across Asia. Mainland China and its special administrative regions are expected to turn around the gloomy situation in 2022, leading the recovery of North Asia markets in the second half of the year.

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