For many months now, Mr. Tran Son (40 years old, living in Hoang Mai, Hanoi) has been continuously posting advertisements for a homestay area of more than 3 hectares in Ba Vi on many information channels. Mr. Son's land has more than 500 square meters of residential land, which he bought for 20 billion VND. At the end of 2021, his family invested an additional 15 billion VND to build a homestay area with more than 5 spacious and convenient villas with the hope of developing a resort tourism business model, both using a large land fund and having more work and income for the whole family. However, running a homestay business is not simple, when operating, his family realized that there were too many problems and costs.
Homestay business is gloomy in the middle of the peak tourist season. (Illustration photo)
Due to having to borrow a lot of capital to invest, bearing heavy interest rates, and the business bringing low profits, Mr. Son and his wife had to sell the homestay to recover their capital. The selling price has been reduced a lot, but so far, there have been no buyers. The number of people asking is also not many, because the value of the land is not small, combined with the homestay business in this period is no longer as "hot" as before.
" If many years ago, homestays flourished as a new trend in the real estate business, now this model has become saturated and even loss-making, " Mr. Son said sadly.
Sharing the same opinion with Mr. Son, Ms. Pham Loan (owner of a homestay in Luong Son - Hoa Binh ) admitted that operating a homestay is not simple. “ In addition to spending money to buy land, designing and building a homestay is very expensive because not only building a house, we also need to have enough synchronous infrastructure to ensure a beautiful and eye-catching natural landscape. The newer, more unique and well-invested the homestay is, the more it will attract tourists. However, compared to the amount of money spent, the profits are currently not enough to cover the costs while most business people have to borrow money from banks. Especially in the current period of high interest rates, carrying interest is really a huge burden ,” Ms. Loan said.
According to Ms. Loan, although her homestay area is well-invested, the number of tourists is not stable. “ The company has also spent money to sell customers on many tourism channels, even invested in advertising, increased interaction on websites, but the number of guests coming to stay is not large, very rarely the rooms are full. Meanwhile, the homestay owner still has to maintain the number of employees to ensure operations. Even if the business is favorable, it will take 5 years for the homestay investor to recover the capital. Therefore, those who are using financial leverage to do business in this type are facing many risks of bankruptcy ," Ms. Loan added.
Ms. Nguyen Hong Nhung, a homestay investor for many years, said that the homestay market "collapsed" partly because many people rushed to invest following the previous trend without anticipating the bottom of real estate from mid-2022 until now. " Most of the friends I met later in the homestay business were amateurs, following the trend when the market heated up three years ago. At that time, the loan interest rate was only 7-8%, but now the interest rate that investors are having to bear is up to 12-13%. With interest rates still hanging high, the real estate market is sluggish, the difficult economy causing low tourist numbers, how can homestay business bring profit. Many homestay investors today, some are trying to operate moderately, but most are mainly looking for ways to sell off ."
A survey by VTC News reporters also shows that there is a lot of information about the homestay real estate segment for sale on forums today.
On the fanpage Homestay Ba Vi, Hanoi, a homestay area of nearly 7000 m2 (residential land area of 200 m2), newly built, in the process of being unfinished, had to be put up for sale at a discount price of 9 billion VND. According to the assessment of real estate brokers, the value of the homestay area is estimated to be from 13-15 billion VND. However, because the owner is facing financial pressure, he needs to sell quickly, accepting an unprecedented deep discount.
Advertise homestay on real estate channels. (Screenshot)
On the Hoa Binh homestay channel, a homestay area in Luong Son, with an area of 6,000 m2, including 400 m2 of residential land, is also being offered for sale at a price of more than 15 billion VND. A real estate broker said that this figure is only 70% of the initial investment value of the homestay business owner.
In Ba Vi, the owner of a 1.4 hectare plot of land, considered to have a prime location with a lake and stream, very suitable for resort tourism, is also being offered for sale at a price of 26 billion VND.
A homestay resort in Yen Bai, Ba Vi, with an area of 2,500 m2, residential land of 500 m2, is priced at 24 billion VND.
According to Mr. Pham Van Nam, a real estate broker in the resort segment in the suburbs of Hanoi, this year, the number of customers sending to sell homestays has increased 2-3 times compared to previous years. Although the selling price has been reduced, the number of successful transactions is not much. “ Even from the beginning of the year until now, I have not closed any transaction related to the homestay segment. Not only because real estate is hitting rock bottom, but also partly because the trend of investing in homestays has become saturated. The trend of "leaving the city to return to the forest" has lost its heat. Now, if they have money, most real estate businesses still choose safe investment channels in large centers, mainly houses in the city to maintain the value of real estate rather than choosing to buy homestays in the suburbs. Moreover, in the context of banks tightening credit, high interest rates, and sluggish tourism business, few people dare to invest in homestays .”
Commenting on the current homestay segment, Mr. Nguyen Van Dinh - Chairman of the Vietnam Real Estate Brokers Association - warned about the use of financial leverage for business. According to Mr. Dinh, there have been many lessons, even loss of assets due to investing with borrowed cash flow without calculating the balance of interest rates, revenue - expenditure. In particular, homestay business requires a lot of knowledge and practical experience in cash flow management, investment efficiency, operation, and customer care services.
" Any type of real estate needs to avoid the phenomenon of massive investment and following trends, because abusing this can easily lead to a collapse. In fact, currently in many suburban areas of Hanoi, there is a common situation where more than half of the villages and communes are doing homestays and resorts, while the number of tourists coming to experience is sparse, not enough to bring in profits compared to the capital invested, " said Mr. Dinh.
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