What is the Estimated Timeframe for Hanoi Hotels to Recover?

Hotels are expected to see continued growth in the coming period due to the ongoing recovery in tourism.

0
461

Hanoi’s hotel industry saw significant improvements in the first quarter of 2023, as both domestic and international travel to Vietnam and the city increased. According to research and consulting firm Savills Vietnam, this is a trend that is likely to continue in the near future. The firm noted that the number of room nights sold in Hanoi increased by 20%, while average room rates rose by 6%. Furthermore, occupancy rates rose to 78%, which is the highest level since the start of the pandemic. This is a positive sign for the industry, and suggests that Hanoi’s hotel sector is recovering.

 International visitors at a relic site in Phu Xuyen District, Hanoi. Photo: Hoai Nam/ The Hanoi Times

The consulting firm reported that international visitors to Vietnam experienced an exponential surge of 2,900% year-on-year, reaching a total of 2.7 million in the first three months of the year.

Meanwhile, Hanoi welcomed 5.9 million visitors in the first quarter of this year, an increase of 110% year-on-year. Of this total, 4.9 million were domestic visitors, up 75% year-on-year, while international arrivals totaled 979,000, soaring 5,900% compared to the first quarter of 2022.

Hanoi boasts a wide variety of accommodation options, with a total of 10,260 hotel rooms on offer. Of these, 17 hotels boast a five-star rating, 18 offer four-star accommodation, and 31 provide three-star rooms.

Savills Vietnam experts have reported that the supply of real estate increased by 1% both quarterly and annually. Furthermore, the occupancy rate has increased dramatically by 35 percentage points annually and an impressive nine percentage points quarterly, to reach a total of 58%.

As a result of increasing demand, the average daily rate for hotel rooms soared in the first three months of 2023, topping VND2.5 million (US$106.5) per room night.

The outlook for the hotel business has been significantly improved thanks to the resumption of inbound tourism from China, according to Director of Savills Hanoi Matthew Powell.

“Vietnam’s most critical source market is China, which resumed travel to Vietnam on March 15. According to experts, Chinese tourists are predicted to push forward the revival of the hotel industry.”, he said.

Apart from leisure travelers, demand for accommodation also comes from business travelers, MICE (Meetings, Incentives, Conferences, and Exhibitions) guests, and foreign investors. Thanks to Vietnam’s robust foreign direct investment inflows, demand from these visitors remains strong. Foreign investors typically stay in the major cities of Hanoi and also travel to areas in the vicinity, such as the northern province of Bac Ninh and Haiphong City.

The experts forecast that two new projects, amounting to 471 rooms, will be launched in Hanoi this year. International hotel chains, including Four Seasons, Lotte, Dusit, Wink, Accor, The Shilla, Hyatt, Marriott, and Hilton, are set to introduce 66 projects, containing a grand total of 11,123 rooms, to the city starting in 2024.

Out of 68 upcoming projects, five-star hotels make up a significant 61%, or 32 accommodations. Notable examples include Lotte’s L7 West Lake Hanoi, Dusit International’s Dusit Hanoi – Tu Hoa Princess Palace in Tay Ho District, and the Four Seasons Hanoi in Hoan Kiem District.