According to Colliers, the tourism industry in the first quarter of this year, led by resort tourism, is recording a strong recovery globally for international and domestic travel services. The tourism industry will continue to recover in 2023, with hotel demand continuing to increase. The report stated that in Vietnam, resort real estate shows great potential as the country is taking advantage of the growth momentum of tourism and resort demand after the pandemic from domestic and international visitors.
Resort real estate in Vietnam has potential
Morgan Ulaganathan, Head of Asset Services and Hospitality Advisory, Colliers (Vietnam), said that market participants have made bold moves since the peak of the Covid-19 pandemic. Interest rates are on the rise, but will eventually stabilize. Funds have been raising capital to invest in hotel assets at favorable valuations, before hotel revenues fully recover.
For example, KKR raised $4.3 billion at the height of the Covid pandemic. Bain also acquired individual hotels or systems, with or without brands. Warburg Pincus continued to invest in Vietnam through its Lodgis platform...
However, Colliers representative said that the market still has problems related to laws and regulations, which if resolved in the coming time, the development of the tourism - resort real estate segment is expected to be more vibrant. Vietnam recorded a positive recovery in domestic tourism last year with 101.3 million domestic visitors, exceeding the pre-pandemic level. In 2023, the country aims to welcome 110 million visitors, including about 102 million domestic visitors and 8 million international visitors. Not to mention, the middle class is growing in this country, with about 70% of the population expected to join the consumer class by 2030 (according to McKinsey).
“The fundamentals for Vietnam’s resort tourism development are very positive and the demand for capital deployment is high. The clock is ticking. It is time to start preparing for a vibrant deal season this year,” Mr. Morgan added.
Colliers believes that the tourism industry will continue to recover in 2023, with hotel demand continuing to increase across the region. Any decline in demand from the West at the beginning of the year will be offset by the return of Chinese tourists in the second half of the year. In markets that have reopened and where supply and demand are in balance, revenue per available room is expected to increase by around 6% year-on-year due to improved occupancy.
For markets with supply-demand imbalances, the figure is around 4% year-on-year, also driven largely by improved occupancy. Singapore, Bangkok, Bali and Ho Chi Minh City are expected to lead the recovery across Asia. Mainland China and its special administrative regions are expected to turn around the doldrums in 2022, leading to a recovery in North Asia in the second half of the year.
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