The Rebirth of the Tourism and Hospitality Industry 

2022 marked the recovery of Viet Nam tourism after a two-year slowdown due to the pandemic. Domestic flight frequency reached the 2019 rate. According to the Civil Aviation Authority of Viet Nam, in the first half of 2022, the domestic market had 20.8 million clients. It increased by 58.4% YoY in 2021 and 12% compared to 2019.

Several airlines in Viet Nam have switched to exploit new potential markets like India and expand the flight network in familiar markets such as Korea, Singapore, and Malaysia.

Hospitality performance has improved with tourism’s recovery. According to Savills latest market report, occupancy in Ha Noi increased 16 percentage points (ppts) YoY compared to 27 ppts in 2021. Ho Chi Minh City's average occupancy reached 39 ppts, an increase from 18 ppts last year. 

Mauro Gasparotti, Director, Savills Hotels APAC, noted, "The hospitality market has become active again. Some city hotels have had improved occupancy with demand for leisure and business travel. Coastal resorts have seen relatively high occupancy, especially in the luxury segment. However, large projects in the wrong locations have struggled. The market will become more diverse when quality is prioritised over quantity

How Can Hospitality Grow Significantly? 

Tourism still faces difficulties such as inflation and political tensions on an international scale. In Viet Nam, a significant threat is an oversupply. According to Mauro, existing projects focus on scale. However, accommodation must become more varied and management quality must improve. “Cultural experiences and wellness must be prioritised for Viet Nam to attract more tourists in the long term,” Mr Mauro said. 

Customer Experience is the Core Value 

Although the customer experience is vital in tourism and hospitality, developers and investors have not exploited these factors in Viet Nam. Hospitality properties or second homes must meet the demand for travel and leisure. These spaces should be designed to give visitors a sense of relaxation. The wrong approach can lead to poor performance, especially those without specific features, high-quality amenities, or tranquil spaces. These projects will struggle to attract guests, leading to excess supply and an inability to meet demand. 

Some developers are cooperating with famous brands to solve this problem. However, hiring a reputable brand to operate a hotel is insufficient to ensure success. Developers must carefully implement sustainability from planning to operations. 

Mr Mauro stated that the most important thing is to change the approach from "maximising space" to "focusing on customer experience."

"If we can deliver excellent customer experiences, we can boost demand and loyal customers. If visitors are interested in the experience a destination offers, they will come back and even invest. It is an opportunity for the hospitality industry, but it also raises the question of how to offer customers good experiences constantly," said the Savills expert. 

Hospitality real estate allows developers to realise many creative ideas into unique products. They can take advantage of Viet Nam's available tourism resources, such as beautiful beaches, mountains, and local culture.

Conclusion:

Savills Hotels team has a wealth of experience in resort real estate. The team provides a host of services, from development planning to operational reviews and disposal. Contact Mauro for more information.

Read Further:

• Untapped Potential in Phan Thiet
• Hopes For Tourism Revival in Phu Quoc