The very lucrative and highly potential tourism property market in Vietnam has attracted the attention of many foreign and local investors, but due to the current downturn in the country’s real estate market along with the global economic crisis, this sector also faces obstacles.
|Vietnam has potential to attract more investment in this sector as the country has so many unspoiled and yet-to-be-discovered locations for tourism destinations|
Kenneth Atkinson, Managing Director of Grant Thornton Vietnam, said room prices had decreased by 5-10 percent and economic pointers suggest a slowing down in the rate of growth of five-star hotels.
In addition, Vietnam’s service suppliers have low skilled personnel resulting in substandard quality and ineffective service.
Despite all these unfavorable conditions, more than 5.3 million foreign holidaymakers arrived in the country in the first ten months of the year, an increase of 11.2 percent compared to the same period last year.
According to the Vietnam National Administration of Tourism, the country will attract around 6.5 million international tourists, a year-on-year increase of 6.3 percent, and 32 million home tourists, a year-on-year increase of 6.7 percent.
Market survey shows that local and international holidaymakers favor Vietnam and more and more travelers will come to the Southeast Asian nation resulting in property tourism investors also arriving to seek business opportunities.
Nevertheless, poorly run high-grade hotels and resorts cannot meet the demand. Therefore more accommodation will be constructed to provide for the market and according to Grant Thornton Vietnam, around 5,000 hotel rooms will be in the market by 2013.
Tourism property has a specific property market which is different from real estate. It is not only for the owner’s use but also for business and commercial purposes; it is a playing ground for rich people and investors only. National economy is expected to recover by next year, which will be favorable for the tourism property industry.
Experts in the field say that Vietnam has potential to attract more investment in this sector as the country has so many unspoiled and yet-to-be-discovered locations for tourism destinations, with each place having its own unique charm and attraction for both domestic and international tourists.
Currently, the world's leading hotel operators and market leaders Eastin Hotel & Residences, Accord, Ibis and Pullman joined in the market, so it is hoped that the industry will grow in year end months.
Vietnam has its own advantages than other nations in the region, with natural landscapes and land funds to develop the tourism property industry in the future, said Kenneth. However, professional skills of labor in this industry should be raised to meet the demand and query of investors from abroad.
To survive this period of fierce competition and meet the demand of holidaymakers, investors and managers of a tourism property project should change their strategies to attract more customers.
For long-term strategies, Vietnam needs to deal with investment difficulties, related land and housing stabilization policies. This will be an effective channel to mobilize foreign capital for the tourism property projects.
Together with strong government support, hotel and tourism industry will definitely become one of the major contributors to the nation’s GDP.