Vietnam has witnessed major growth in the number of international hotel brands and foreign hotel management companies entering the country over the past few years.
According to the latest figures from Savills Vietnam, the number of international hotel operators has increased from 30 in 2010 to about 80 by the end of 2017.
The first half of 2018, in particular, saw many famous brands come to Vietnam. Among those are Mandarin Oriental in Ho Chi Minh City and Best Western Premier in the central province of Quang Binh.
Radisson Hotel Group, another leading hotel operator, recently opened an office in Ho Chi Minh City to manage its first Radisson Blu Resort in Vietnam, situated on the southern island of Phu Quoc.
According to Peter Feran, general director of Radisson Blu Resort, the resort is to be opened in July and will signal a new chapter for the Radisson Group.
After opening the resort on Phu Quoc, the group will open a second hotel under the Radisson Blu brand in Cam Ranh in Khanh Hoa province early next year. “Vietnam is an attractive destination for international hoteliers and our group is also expanding its interest to other provinces and cities in the country,” Feran said.
Travelodge Asia, another international hotel operator, also recently announced plans for its first property in the coastal city of Nha Trang scheduled to open in 2020.
According to Stephen Burt, chairman of Travelodge Asia, the group considers Vietnam a very important business destination. “It is a vibrant country that international travellers are discovering in ever-increasing numbers. It is also very encouraging to observe the level of government support for transport and social infrastructure that will further assist the hospitality industry,” Burt said.
There have been other new brands introduced in the market over the last three years, including Ozo and X2 Vibe in the New Hoi An City project; Double Tree by Hilton in Halong, Vung Tau, and Hanoi; Four Seasons in Quang Nam and Hanoi; Oakwood in Ho Chi Minh City, Glow in Danang; and Mai House in Ho Chi Minh City.
Mauro Gasparotti, director of Savills Hotels Asia Pacific, said that he observed a large increase of interest in the country from hotel operators in the past three years, following the expansion of the hospitality market.
“Vietnamese developers are still new to hospitality products, but with the large amount of supply coming, there will be a fast learning process for some of them with more quality assets expected to be under way shortly. We have forecast that a total of more than 30,000 rooms will be opened by the end of 2019,” said Gasparotti.
Vietnam has also experienced a strong growth of condotels over the last two years. It is anticipated that by 2020, approximately 65% of the new supply will be condotel or second home products, which means one of every four products in the total supply will be categorised as a condotel.
According to Gasparotti, condotels are actually much more complicated than a pure hotel. They possess features of both residences and hotels. Therefore, they require a higher level of support in terms of management.
However, he warned, several projects in Vietnam have not considered the management implications of building condotels. This will lead to poorly planned products that will look like an attractive resident or condominium, but they will be managed as a hotel or a resort, with several shortcomings in terms of back of house, facilities, and front of house.
Most condotels are managed by the developers and some of them do not have experience in hotel management, Gasparom added. However, there are a few projects that have begun to integrate a brand and hired a management company. Most of these condotels are part of a complex project, which includes hotel or resort components.
The number of international operators is expected to grow further in the coming years along with the number of local management companies.
“We are very positive about the growth of the sector and the attraction of international operators in Vietnam. It is also very interesting to see that operators themselves are launching new brands to target new types of clients, such as millennial or health-conscious travellers. Vietnam could be a market with great potential for them to introduce focused brands, as the categories of travellers in the country are very diverse,” Gasparotti said.