Mr. Mauro Gasparotti - Director of Savills Hotels commented that the demand for the hotel segment in Vietnam has recovered strongly, especially the growth of some international tourist markets has actively supported the recovery of the resort industry. However, the ability to capture demand will depend largely on the capacity of each hotel.

Accordingly, to increase competitive advantage in the market, a survey by Savills Vietnam shows that many owners are currently more interested in cooperating with international hotel operators to convert or upgrade to a higher-end brand.

Signing projects to renovate and reposition brands helps hotel chains increase their portfolio of projects operating in Vietnam more quickly. Since the pandemic, the market has recorded many brand conversion projects.

The 2022-2023 period marked a record high rate of rebranding projects, accounting for 52% of the total number of newly opened international hotel branded projects during this period. This trend will continue in 2024 with an estimated 30% of the total number of newly opened international hotel branded projects continuing to be rebranding projects.

Mr. Mauro Gasparotti shared that the wave of hotel development with international operator brands started early in Vietnam in 2008-2010. Normally, a hotel management contract has a term of 10 to 15 years. Thus, up to now, many of these management contracts are close to expiring.

“Some owners are considering extending the contract. Others are considering changing to another brand, especially in cases where the project needs to be renovated and has the ability to upgrade to a more premium brand. Compared to 10 years ago, the hotel industry in Vietnam has developed much more, so hotel operators are also willing to propose a higher-end brand if the project quality meets the brand standards" - Mauro Gasparotti commented.

Ms. Uyen Nguyen - Head of Consulting Department of Savills Hotels cited that some projects that have been stalled for many years are also discussing with hotel operators to restart under a new brand. Typically, some large projects in the Da Nang and Hanoi areas.

In addition, some hotels after many years of operation are also working with current operators to upgrade to a higher-end brand. For example, the Hilton Hanoi Opera Hotel is in the process of upgrading to the first Waldorf Astoria branded project in Vietnam. Or the Meliá Ba Vi Mountain Retreat resort project will be repositioned as Meliá Ba Vi Mountain, Member of Meliá Collection.

In 2024, the Vietnamese accommodation market will see a significant improvement in room occupancy month by month, thereby contributing to improving the revenue per available room (RevPar) index. Since the beginning of the year, Vietnam's RevPAR index has grown by about 15% compared to the same period last year and is one of the best growth rates in Southeast Asia - Savills informed.

According to Mr. Mauro Gasparotti, room occupancy growth this year is driven by the strong recovery of international visitors to coastal destinations. Typically, Nha Trang - Cam Ranh and Phu Quoc have recorded room occupancy increases of 40-50% compared to the same period last year.

In contrast to the growth in capacity, the average room rate is still 3% lower than the same period in 2023. The main reason is that the supply of mid-high-end hotels in markets such as Nha Trang and Phu Quoc has kept room rates at competitive levels to increase market share, especially hotels that have just opened after the pandemic.