Vietnam

Vietnam Hotel and Tourism Report | April 2015Hotels & Hospitality Group Hotel Intelligence Vietnam Contents 03 Market Summary Market Overview 04 06 Cities 06 Ho Chi Minh City 07 Hanoi 08 Nha Trang 09 Da Nang Hanoi Recent Key Transactions 10 Da Nang Nha Trang Ho Chi Minh City . Planned government investment in infrastructure will improve overall connectivity. HCMC – 257 rooms Hilton Garden Inn Hanoi – 86 rooms UPCOMING HOTELS Dusit Thani Nha Trang – 439 rooms The InterContinental Hotel at Keangnam Hanoi – 359 rooms Le Méridien Saigon HCMC – 350 rooms Ibis Grand Place HCMC – 338 rooms Hilton Da Nang – 193 rooms 445 rooms JW Marriott Hotel Hanoi 323 rooms Novotel Da Nang Premier Han River 318 rooms 300 rooms Lotte Centre Hanoi* Starcity Airport Hotel.9% in 2014) Source: WTTC. while scheduled promotional campaigns by the tourism board should further enhance the country’s exposure. NEW HOTELS (Top 5 major hotels that have opened recently) OTHER NEW HOTELS The Reverie Hotel. Vietnam National Administration of Tourism (VNAT). Ho Chi Minh City and Hanoi remain the most popular cities for tourists to visit with 4.6% % of total GDP in 2013 (forecast to rise by 8. Branded new room supply is primarily concentrated in Ho Chi Minh City and Hanoi with an additional 3. Ho Chi Minh City *318 rooms hotel and 258 rooms SA QUICK FACTS (HCMC and Hanoi) 7. growth has been eroding over the past three years. The country has seen a CAGR (Compounded Annual Growth Rate) of 15. with Dusit Thani and Hilton branded hotels expected to open shortly.0% year-on-year.9% and 13.Revenue per available room 279 rooms InterContinental Nha Trang .Hotel Intelligence Vietnam 3 Market Overview Tourism Demand Supply Outlook International tourist arrivals to Vietnam numbered approximately 7.86 million) and Da Nang (0.9 million during 2014.399 International Visitor Arrivals in 2014 Number of New Rooms in 2014 Contribution of Tourism Industry to National GDP 4.4 million and 3.729 keys expected to enter these two markets in the near future.9% in international visitation between 2009 and 2014. JLL ADR – Average daily rate. The Vietnamese tourism industry is set to continue to grow for the foreseeable future as Vietnam continues to establish itself as a leading destination in Southeast Asia.0 million foreign tourist arrivals in 2014 respectively. however.9% between 2005 and 2014 (CAGR) respectively. Internationally branded supply in Nha Trang and Da Nang is limited but growing.96 million) growing by 14. a growth of 4. Emerging resort markets have been gaining traction with foreign visitors to Nha Trang (0. RevPAR .9 million 1. the city plans to renovate and build 50 new docks. international visitor arrivals to Vietnam have declined 14% during the first quarter of 2015 compared to Q1 2014. a number of internationally branded hotels positioned across all star categories.0 4. real estate and industrial sectors. Ho Chi Minh City is largest city in Vietnam and is the main commercial and cultural city of the country.0 6. entered the market over the past few years. . JLL The government is the key driver of the tourism industry providing incentives for investors and promoting Vietnam as a destination overseas. Ho Chi Minh City Formally known as Saigon.0 5. As a result of growing lodging demand. While continuing territorial disputes between Vietnam and China is the likely reason affecting Chinese arrivals to the country. the devaluation of Russian Ruble has limited travel of Russians overseas. International tourist arrivals to Vietnam grew by 4% year-on-year to approximately 7. however.9% per annum (CAGR) between 2009 and 2014.9 million visitors during 2014. It is located in the southern part of the country and houses a number of museums and war memorial sites.0 8.9 million visitors during 2014. gradually developing. many other coastal resort destinations such as Da Nang and Nha Trang have been developing due to improvement in tourism infrastructure and enhanced accessibility.0 3.4 Vietnam Hotel and Tourism Report Market Summary Vietnam continues to emerge as a prominent destination for international travellers within Southeast Asia.0 0. With the presence of diverse tourism attractions. stimulating developments in infrastructure. the city offers a French colonial architecture which adds to the cultural and historical significance and draws a number of tourists. International visitation grew by 15. Vietnam appeals to a range of visitors. enhancing domestic connectivity. Annual Growth (%) Source: Vietnam National Administration of Tourism (VNAT).0 7.0 International tourist arrivals to Vietnam grew by 4% year-on-year to approximately 7. The government continues to be a key driver of the tourism industry providing incentives for investors and promoting Vietnam as a destination overseas. This decline has been caused by a simultaneous drop in the number of arrivals from Russia and China. 30 20 10 0 -10 Visitor Arrivals (million) -30 14 3 1 20 20 12 20 11 0 20 09 -20 20 08 20 07 20 06 20 05 20 Annual Growth (%) 40 CAGR (2005–2014) 9. Among other tourist attractions. Investments in marketing campaigns to promote Vietnam’s tourism industry since 2010 has increased interest from international tourists. As part of its initiative “River Tourism Development Strategy of Ho Chi Minh City in the period of 2013 to 2015 and towards 2020”. growth has been eroding over the past three years. Growth in tourism and visitation has spurred investment into the country especially in the hospitality.0 1.0 2. waiting rooms by 2015 and plans to also redevelop more than 65 tourist sites within the city’s districts. Each of the major tourist destinations in the country provides unique offerings for the discerning tourist as follows: International Visitor Arrivals to Vietnam Number of Visitors (million) 9. wharfs.5% 1 20 According to recent information. Not only are the main economic centres Hanoi and Ho Chi Minh City (HCMC). Foreign direct investment into Vietnam continues to grow. with more than 200 islands offshore. Other industries contributing to the local economy are shipbuilding. close to Mainland China.8 million visitors in 2009 to 7. The coral seabed near the city is popular for diving and snorkelling. Hanoi benefits from being a bureaucratic centre for foreign business and investment activity in Vietnam. In addition. Various industry players such as tour agencies. airlines and lodging establishments (both local and foreign) will play a major role in promoting the country. Hanoi has become an increasingly attractive destination for international investors and visitors. three UNESCO World Heritage Sites located within 100 kilometres of Da Nang. ASEAN The implementation of the ASEAN Economic Community may prove to be a major contributor to Vietnam’s overall economic development. My Son Valley which features the remains of the ancient Cham civilization. the Vietnamese tourism industry is set to continue to grow for the foreseeable future. The tourism industry has considerably developed mostly in the last decade. The city benefits from long-standing historical and cultural traditions and a stable socio-political environment.9 million visitors in 2014. highways and tourism promotional campaigns. mud baths and historic tracks such as the Po Ngar temple complex. as well as the ancient imperial city of Hue. Nha Trang is regarded as one of Vietnam’s premier beach destinations. Outlook Vietnam has made considerable developmental strides over the past decade. and also extends along the coastline north from Da Nang to Langco and on to Hue in the adjoining Thua Thien Hue province. the unlocking of Vietnam's economic potential rests on reviving the reform drive. Several industrial parks are located to the south of the city. In light of growing government investment in infrastructure across the nation in the form of construction (and expansion) of airports. The city is located in the northern part of the country. Nha Trang is located 1. including China Beach. Nha Trang is a coastal city and the capital of Khanh Hoa Province.Hotel Intelligence Vietnam 5 Hanoi Nha Trang Hanoi. Often called Vietnam’s Mediterranean area. golf. The coastline features some scenic beaches. which officially opened on 4th of January 2015. is a city where old meets the new. The implementation of economic integration to create a single market across ASEAN states. With a number of academic institutions in the area. airlines and lodging establishments (both local and foreign) will increasingly play a major role in promoting the country. some 30 km along China Beach south from Da Nang City. the city’s tourism department also organises events and provides a platform for Hanoi to promote both its tourism and business opportunities.278 kilometres south of Hanoi and 441 kilometres north of Ho Chi Minh City. Industry leaders have highlighted this as an issue that needs to be addressed in order to compete with regional rivals over the long term. However. Nha Trang is also a centre for training and scientific research in Southern Central Vietnam. fishing and lobster farming. In addition. The Da Nang tourism market extends from Da Nang to Hoi An in the adjoining Quang Nam province. namely the 16th century silk route trading port of Hoi An. As Vietnam’s capital and the seat of government. various industry players such as tour agencies. Khanh Hoa Province benefits from a coastline of approximately 200 kilometres. Da Nang Da Nang is one of the preferred resort destinations along the long coastline of the country. The Nha Trang area is known for its natural beauty comprising of a largely unspoilt coastline. where old sites are preserved in some areas while other areas are being developed. with the number of international tourist arrivals increasing from 3. . referred as the AEC 2015 (ASEAN Economic Community 2015) may prove to be a major contributor to Vietnam’s overall economic development. thanks primarily to a multi-fold expansion in external trade following entry into the World Trade Organization (WTO) in 2007. the capital of Vietnam. it is mainly popular for its beaches. A continuing area of concern for the Vietnam tourism industry has been the inability to generate repeat business. and is a holiday destination for locals offering activities ranging from amusement parks. Terminal 2 will see capacity increase to 25 million passengers by 2020 and 50 million passengers by 2030. An important infrastructural development in Hanoi is the completion of the second terminal and associated facilities at the Noi Bai International Airport. Select Future Openings Hotel Rooms Opening Le Méridien Saigon 350 2015 Ibis Grand Place 338 2015 Ritz-Carlton Hotel 250 2017 Total 938 Source: JLL Research • With a continued growth in the number of international arrivals. • However. .5 2. • With the development of new international routes from regional airports. • Recent new supply in HCMC include the 300 key Starcity Airport Hotel in 2014 and the 257 room Reverie Hotel in February 2015. 300 keys. tourist and cultural hub.7%. • Future supply includes 2.5 3. Occupancy fell from 67.8% to 67.0 3.6% to 66. with RevPAR declining 5.4 million foreign visitors during 2014. Russia.5 4. • Territorial disputes between Vietnam and China may continue to affect Chinese visitor arrivals to Ho Chi Minh City (currently the top source market to Vietnam) in the short term.6 Vietnam Hotel and Tourism Report Ho Chi Minh City Demand Trading Performance • Ho Chi Minh City (HCMC). up 7.1% over the previous year.4%. we expect lodging demand levels to strengthen further over the short to medium term. Malaysia. more foreign tourists have been flying direct to resort destinations such as Da Nang instead of transiting through Ho Chi Minh City. 2014 stats compared to 2013 RevPAR declined 5. Australia and Japan are the top source markets to Ho Chi Minh City. The News Key Recent Additions • Starcity Airport Hotel.1% y-o-y to USD 77 compared to the same period in 2014. fresh supply slated to enter the market should continue to put pressure on ADR in the near term. which is driven by both a fall in ADR from USD 118 to USD 114. it welcomed 4. is the country’s commercial. 257 keys.2% y-o-y to USD 77. • Trading performance in 2014 was down over the previous year. Occupancy Source: STR Global / JLL Supply Outlook • Existing branded supply in Ho Chi Minh City comprises of 4.0 2. RevPAR (USD) 5 b2 b2 D Fe ADR (USD) Source: VNAT / Press Release /JLL YT YT D Annual Growth (%) Fe 01 4 14 20 13 0 01 50 20 10 20 11 20 12 20 13 20 14 09 International Visitor Arrivals 20 08 20 07 20 06 20 05 –20 100 12 0 150 20 20 Occupancy (%) 100 90 80 70 60 50 40 30 20 10 0 11 40 ADR/RevPAR (USD) 200 20 60 Trading Performance – Ho Chi Minh City 10 80 20 04 Annual Growth (%) 100 20 03 20 02 20 20 20 01 Visitor Arrivals (million) 5.442 rooms across different segments. and a marginal decline in occupancy from 67.2% relative to 2013 to USD 77 driven by a simultaneous decline in occupancy from 67. 20 • Being an international gateway to the rest of the country. 09 • Mainland China.0 1. ADR declined from USD 120 to USD 116. the largest city in Vietnam.4% and average room rates from USD 120 in 2013 to USD 116 in 2014.0 20 International Visitor Arrivals to Ho Chi Minh City • Figures for YTD February 2015 indicate a decline in RevPAR performance of 3.6% to 66. • The Reverie Hotel.0 0.0 4.5 0.770 keys from seven hotels expected to enter the market in the near future.5 1. 5 2. • Figures for YTD February 2015 show a similar trend. Malaysia. Japan. 09 • Hanoi is emerging as an increasingly attractive destination for international investors and visitors supported by long-standing historical and cultural traditions. • Future supply includes three hotels with a total inventory of 959 rooms expected to enter the market in the near future. Re-brandings • Hanoi Horison Hotel rebranded as Pullman Hanoi.0 2. South Korea.4% increase in RevPAR to USD 77 compared to USD 75 in 2014. . which is driven by an increase in occupancy from 66. 318-key hotel and 258-key Serviced Apartment • RevPAR increased by 0.0 0.Hotel Intelligence Vietnam 7 Hanoi 10 20 11 20 12 20 13 20 14 09 International Visitor Arrivals 20 08 20 07 20 06 20 05 20 04 Annual Growth 14 14 ADR (USD) RevPAR (USD) Fe b YT D YT D Fe b 20 20 13 20 20 12 0 15 50 20 100 Occupancy Source: STR Global / JLL Outlook • Growing number of domestic flights from Hanoi is benefiting the overall tourism industry as visitors are encouraged to travel to multiple destinations throughout Vietnam.8% y-o-y to USD 74. • The completion of the second terminal at the Noi Bai International Airport will help facilitate international arrivals to Hanoi as it will see capacity increase to 25 million passengers by 2020 and 50 million passengers by 2030. Russia and other East European countries in the near future. driven by an increase in occupancy to 68. • The political friction between Vietnam and China may continue to affect Chinese visitor arrivals to Hanoi (currently the top source market to Vietnam) in the short run.4% to 68.8% year-on-year during 2014 to USD 74. the tourism authorities are planning focused promotion campaigns in other markets including Japan. 20 Demand • With a recent decline in the number of Chinese visitors to Hanoi. 250 keys 2014 stats compared to 2013 RevPAR increased by 0. expanded and rebranded to remain competitive as new supply continues to enter the market. South Korea and Singapore. Singapore. 445 keys Trading Performance • Lotte Centre Hanoi.3% from 2013.5 3. Source: VNAT / Press Release / JLL Supply • Existing supply in Hanoi comprises of 44.5 1.278 keys.0 Occupancy (%) 100 90 80 70 60 50 40 30 20 10 0 20 International Visitor Arrivals to Hanoi ADR/RevPAR (USD) 200 10 • Top source markets to Hanoi include Mainland China.0 1. ADR declined marginally to USD 109.1% to 71. Trading Performance – Hanoi 20 • International arrivals to Hanoi reached an all-time high of 3 million during 2014. a 3. Select Future Openings Hotel 150 11 Annual Growth (%) 100 80 60 40 20 0 -20 -40 20 03 20 02 20 20 20 01 Visitor Arrivals (million) 3. an increase of 16.0%. with more than half being unrated. 86 keys Source: JLL Research • JW Marriott Hotel Hanoi. • Some of the existing hotels are being upgraded. while ADR declined marginally to USD 109.9%. while ADR declined from USD 113 to USD 107.5 0.0%. Rooms Opening The InterContinental Hotel at Keangnam 359 2015 The News Novotel Ciputra Hanoi 300 2017 Total 659 Key Recent Additions • Hilton Garden Inn Hanoi. Occupancy grew from 66. The News Key Recent Additions • InterContinental Nha Trang. the Nha Trang tourism market has seen substantial growth over the past few years with increasing number of domestic as well as international tourist arrivals. South Korea.000 in 2014. • The existing supply in Nha Trang is largely dominated by independent and family-run hotels targeting domestic and cost-conscious travellers. The existing supply in Nha Trang is largely dominated by independent and family-run hotels targeting domestic and cost-conscious travelers.9% (CAGR). 680 keys International visitor arrivals reached approximately 856. which represents a year-on-year increase of 18. . These independent and family run hotels are largely located on Biet Thu and Nguyen Thien Thuat Streets. 279 keys • Best Western Premier Havana Nha Trang. of Visitors ('000) Select Future Openings 80% 0% 07 20 06 20 20 05 Visitor Arrivals ('000) 900 800 700 600 500 400 300 200 100 • Internationally branded supply in Nha Trang is limited but growing. Best Western. representing a year-on-year increase of 18.2%.000 in 2014. JLL • K ey source markets to Nha Trang include Japan. improving domestic as well as international connectivity and the launch of focused tourism promotion campaigns bode well for the outlook of the Nha Trang tourism market. International Visitor Arrivals to Nha Trang Annual Growth (%) 100% Hotel Rooms Opening 60% Dusit Thani 439 2016 40% Eastin Duyen Ha Resort 450 2017 20% Total 889 14 20 13 20 12 20 11 20 10 09 20 20 20 08 -20% No. Russia and USA. Source: JLL Research Outlook • With an improvement in tourism infrastructure. Annual Growth (%) Source: Tourism Department of Khanh Hoa. Novotel and Evason (a brand of Six Senses Hotels Resorts Spas). while independent midscale hotels are located along Tran Phu Boulevard and its sub-streets. Key players in the market include InterContinental. • International visitor arrivals reached approximately 856. • Factors such as the addition of internationally branded resorts.8 Vietnam Hotel and Tourism Report Nha Trang Demand Supply • The total number of visitors to Nha Trang via Khanh Hoa Province has increased significantly over the period from 2005 to 2014 at an annual rate of 14. Sheraton.2%. • Nha Trang Bay has been voted as one of the top 29 most beautiful bays in the world by Travel + Leisure magazine for two years in a row. This has helped bring the destination under international spotlight. we anticipate visitor arrivals to continue to grow at a healthy pace in line with growth observed over the past few years.3%). • The Majority of existing hotels are one-star to two-star properties (83. The News Key Recent Additions • Hotel Premier Village Da Nang Resort (Managed by Accor). USA.2 Annual Growth (%) 100 80 1.7% of hotels are categorised as three-star to five-star. 323 keys International visitor arrivals reached approximately 960. • International operators with a presence in the market include Accor. and only 16. 111 keys • Novotel Da Nang Premier Han River.0 60 0.000 in 2014.Hotel Intelligence Vietnam 9 Da Nang Demand Supply • International visitation to Da Nang has shown a steady increase since 2009 growing at a rate of 25% per annum (CAGR) between 2009 and 2014 to 0.8 40 0. Da Nang’s second largest source market. • According to the Da Nang Tourism Department. launch of additional direct international flights and with the entry of additional international branded hotels in Da Nang.7% of hotels are categorised as three-star to five-star. Japan and Australia.0 06 -20 05 0. JLL Select Future Openings Hotel Rooms Opening Hilton 193 Q1 2016 Four Points by Sheraton 390 2017 Total 583 Source: JLL Research Outlook • In the short to medium term. with an improved airport infrastructure. International Visitor Arrivals to Da Nang Number of Visitors (million) 1.465 rooms as of September 2014 (latest available statistics).3%). • The regional markets including Thailand and Mainland China. supply comprises a total of 426 hotels with 15.6%. continue to be key international source markets in the Central Vietnam region. and only 16.96 million. most of which are of international standard.2 Annual Growth (%) Source: Da Nang Tourism Board. Hyatt and IHG. particularly from Mainland China. • Top source markets to Da Nang include Thailand. • The opening of the Crowne International Club in 2009. However. . • The availability of a variety of accommodation options ranging from locally managed resorts and villas to internationally branded hotels as well as the increase in direct international flight routes have led to an increase in inbound visitation. territorial dispute with China and a sluggish Thailand economy is likely to continue to negatively affect tourism arrivals in the short term. not considered as being of international standard. The Majority of existing hotels are one-star to twostar properties (83.6 20 0. Mainland China. which represented a y-o-y increase of 28.4 0 Visitor Arrivals (million) 14 20 13 20 11 12 20 20 10 20 09 20 20 20 20 20 08 -40 07 0. the only casino today with a licence to operate live gaming tables in Da Nang. has also contributed to the increase in visitor arrivals since 2010. 6 million 100.4 million 101.440* Nha Trang 2013 280 42 million* 150.000* Hoi An 2013 96 9.000 Quy Nhon 2013 63 6.10 Vietnam Hotel and Tourism Report Recent Key Transactions Property Name Location Year Rooms Price (USD) Price per room (USD) Six Senses Con Dao 2014 50 Confidential Confidential Hoi An 2014 100 Confidential Confidential Ho Chi Minh City 2014 268 32 million* 119.587 The Nam Hai Resort & Spa Movenpick Saigon (50% stake) Sheraton Nha Trang (50% stake) Life Heritage Resort (rebranded as Anantara) Life Wellness Resort (rebranded as Avani) Source: JLL *Price reflects 100% interest Hanoi Vietnam Key Destinations Da Nang Nha Trang Ho Chi Minh City . com/hospitality. valuation and asset management assignments. timeshare and fractional ownership properties.Front cover Halong Bay. backed by industry-leading research. videos and research from JLL’s Hotels & Hospitality Group. while also completing approximately 4.500 advisory. 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Asia [email protected]@ap.jll.jll.com +66 8184 42049 Jonathan Ottevaere Senior Vice President Thailand & Indochina Jonathan.jll. however. contact Investment Sales Strategic Advisory and Research Andrew Langdon Executive Vice President Thailand & Indochina Andrew. no representation or warranty is made to the accuracy thereof. All information contained herein is from sources deemed reliable. All rights reserved.jll.com +66 81901 2901 Mike Batchelor Managing Director Investment Sales.com +6681 984 8970 (Bangkok) +65 9654 6255 (Singapore) www.com/hospitality Jones Lang LaSalle Property Consultants Pte Ltd | CEA Licence No. L3007326E © 2015 Jones Lang LaSalle IP. Inc.For inquiries.