Hotels in Ho Chi Minh City are still being sold in droves.

It's getting harder and harder!

At the end of April, many people in Ho Chi Minh City were shocked by the news that the 4-star Norfolk Hotel located at 117 Le Thanh Ton (District 1) had officially closed. Located right next to the Ho Chi Minh City People's Committee headquarters, just a few dozen steps from Nguyen Hue walking street, Norfolk is one of the first hotel joint ventures built when Vietnam opened its doors to international visitors in the early 90s of the last century, closely associated with the development of Ho Chi Minh City's tourism industry. Although the hotel did not confirm the exact reason for its closure, it is clear that the lack of tourists was one of the important factors that forced Norfolk to close after 30 years of operation. The larger the hotel, the higher the operating costs, making it difficult to survive until the day when international visitors return. However, the system of 3-star hotels and below in Ho Chi Minh City is not doing much better.

Searching on Google with the keyword "hotel for sale in Ho Chi Minh City", hundreds of results corresponding to hundreds of hotels in need of transfer. On the real estate connection platform Homedy, there has been a significant increase in hotel sales in Ho Chi Minh City in the past 2 months. Among them are many luxury hotels, beautiful locations, very good revenue and profit before the pandemic, but there is also no shortage of small-scale hotels with only 15 - 20 rooms, motel models from the city center to the outlying districts. According to statistics, hotels in Ho Chi Minh City are currently being sold for prices ranging from 14 - 590 billion VND, depending on the segment, area, and interior.

Many hotels in Ho Chi Minh City have to stop operating and put up transfer signs.

According to the report of the Ho Chi Minh City Department of Tourism, by the end of 2022, the city had 3,227 accommodation establishments of all types, equivalent to more than 65,000 rooms eligible for business. Of these, 325 hotels were ranked from 1 to 5 stars; 2,902 hotels met the minimum criteria for facilities and technical services. Compared to the end of 2019, the total number of 1 to 5 star accommodation establishments decreased from 1,342 establishments to 325 establishments, mainly due to difficulties faced by businesses. Although tourists have returned, the business situation has not improved. Typically, in District 1, there are 308 tourist accommodation establishments, but the survey showed that about 20 establishments have closed, temporarily suspended operations or changed owners, returned premises, changed business types, etc.

In the first 4 months of the year, Ho Chi Minh City attracted more than 1.3 million international visitors and nearly 10.6 million domestic tourists. The city's tourism industry aims to welcome 5 million international visitors in 2023, 35 million domestic tourists and total tourism revenue strives to reach 160,000 billion VND.

Not surprisingly, the situation of motels and hotels still being sold off massively, Ms. Nguyen Thi Thuy Loan, Deputy General Director of A25 Hotel System, informed that the business situation is getting more and more difficult. It has been more than a year since tourism officially opened but the number of tourists, especially international tourists, has not recovered, so hotel revenue has dropped dramatically.

On the other hand, reopening after nearly 2 years of closure due to the pandemic, A25's facilities have seriously degraded. The walls are leaking, electronic devices such as TVs, refrigerators, decorative lighting systems... all have to be replaced. Along with that, the preferential period for electricity and water costs and state loans has expired. Staff salaries are getting higher and higher, so the sources of capital to upgrade and renovate facilities are almost gone. "In general, we should try as much as possible, but now we don't know what to do. The economic recession, war, and political crisis in the world have greatly affected the travel and tourism needs of both international and domestic visitors," Ms. Loan assessed.

No source can replace international visitors

Commenting on the overall market situation, Ms. Nguyen Hoang Nhu Thao, representative of Wink Hotel (HCMC), shared that Covid-19 and the economic downturn during and after the pandemic have led to the closure of a series of large and key tourist markets. At the same time, changing customer behavior has significantly affected the business activities of the entire tourism ecosystem, including accommodation. In addition, the city's tourism industry is witnessing fierce competition between traditional business types and booking rooms through online room sales sites (Booking, Agoda, Traveloka...). Notably, the market has also seen cases of price dumping and arbitrary "star awarding" while not meeting the standards... In addition, many tourist accommodation establishments are facing certain difficulties in terms of fire prevention and fighting approval regulations due to their degraded facilities that do not meet the criteria, especially small and medium-sized tourist accommodation establishments built before the fire prevention and fighting law took effect.

According to the leader of the Ho Chi Minh City Department of Tourism, the city has an advantage over other localities thanks to its possession of more than 3,227 tourist accommodation establishments across the city. However, in the current context, accommodation establishments that meet the minimum conditions to serve tourists and 0-3 star hotels in the area are struggling to overcome difficulties to maintain operations. Since the beginning of 2022, the Department of Tourism has accompanied the business community to build a tourism ecosystem, proactively implementing tasks and solutions to restore and develop the industry. However, the system of small and medium-sized hotels in the area has not yet recovered as expected, especially since the market's purchasing power has not shown signs of growth as in the same period in 2019.

A series of hotels have had to close, cease operations or change their models, mainly due to the low number of international visitors to Ho Chi Minh City, so business activities have not been able to recover. The Department of Tourism is coordinating with businesses, localities and experts to research and implement specific solutions to effectively develop the hotel sector in 2023 and the following years in line with the orientation and policies of the City government. In particular, special attention will be paid to diversifying product types, forming attractive product sets to increase experiences and attract tourists to stay in the city longer.

"As long as international visitors have not recovered, it will be difficult for us to recover. Currently, our revenue is only enough to cover monthly expenses such as salaries, electricity, water, internet, and other fees. The business is not profitable," said Ms. Nguyen Hoang Nhu Thao.

The representative of Kim Do Hotel - Royal Hotel Saigon also affirmed that the balance of guest sources from 80% international guests - 20% domestic guests in the pre-pandemic period has now reversed, causing the hotel's revenue to decline, not as expected. 2019 was the golden age of Vietnam tourism - international visitors came in large numbers, the economy was abundant, so spending freely on food and entertainment increased. Currently, domestic guests were already spending more cautiously, after the pandemic, the economic difficulties made them even more calculating and thrifty.

"Room prices have decreased, guests have decreased, guest spending has decreased, while electricity, water, land tax costs have increased, so the accommodation service industry this year is still facing many difficulties. The southern region has not been affected much by power shortages and power outages like the north. If the situation becomes tense in the near future, hotels will still face difficulties. In general, everything now is worrying," said a representative of Kim Do Hotel, who suggested that in addition to visa opening policies, the Government, ministries and sectors need to have more policies to support the accommodation, service and tourism industries, such as reducing the electricity price bracket for accommodation services to the same level as the electricity price bracket for production, exempting/reducing land tax, water fee, etc. to help the tourism industry overcome this difficult period.

Source link: https://thanhnien.vn/khach-san-o-tphcm-van-o-at-rao-ban-185230616210318492.htm